As pressure from European financial authorities mounts on the Prime Minister to sack MFSA chief Joseph Cuschieri following revelations about his trip to Las Vegas with Yorgen Fenech, attention also shifts to who Cuschieri chose to accompany him on the trip.

European Central Bank (ECB) sources told The Shift that Cuschieri’s trip, financed by the man accused of commissioning journalist Daphne Caruana Galizia’s assassination, is in clear breach of both the ECB and the MFSA’s own code of ethics.

The revelations on Cuschieri’s travels with Fenech come as Malta faces an uphill struggle to avoid greylisting by the Council of Europe’s anti-money laundering body, Moneyval, over lack of supervision and action by the same MFSA on money laundering activities.

Multiple sources have also informed The Shift that Cuschieri, who is married to the daughter of President George Vella, was not alone on his trip to Vegas with Fenech.

At the time of the trip, Edwina Licari (pictured above during another trip with Cuschieri) was a senior official at the Malta Gaming Authority that Cuschieri had just left. A few months later Cuschieri recruited her at the MFSA on a €100,000 package as a lawyer on international affairs despite her lack of experience in the field. She was appointed as General Counsel on the MFSA’S executive committee in October 2018.

She was also appointed to the Board of the Financial Intelligence Analysis Unit (FIAU). At the time of writing, Licari could not be reached for comment.

Cosy relationships and conflicts of interest

According to the MFSA’s code, seen by The Shift, and based on standard ECB rules, staff members of the MFSA are prohibited from accepting any gifts, let alone trips, accommodation and hospitality running into thousands of euros as the one accepted by Cuschieri in May 2018, barely a month after taking office.

The code is very clear in this respect and states: “In safeguarding its integrity and reputation, the Authority (MFSA) attaches utmost importance in ensuring that members of staff and members of its decision-making bodies do not accept any advantages or promises that could be in any way connected with their performance of their official duties”.

More specifically it states that “members of staff should not solicit or accept any advantage, or any promise thereof from any person or company having business with the Authority or is licenced by the Authority or who provides a service to licence holders”.

“Any gifts or other benefits received shall be returned to the remitter. In cases where gifts arrive unexpectedly and it is not appropriate to return them, they should be declared in writing to the Ethics Officer who may advise and give directions as appropriate,” the code adds.

Yorgen Fenech. Photo: Al Jazeera.

A multi-million euro call follows the trip

Although Cuschieri immediately defended his turf, deciding that his overseas trip with Fenech was not in breach of the ethics code, documents seen by The Shift show that just a few weeks after the trip, the MFSA issued a multi-million euro call to find new premises in which Fenech had a direct interest.

The call conceived by Cuschieri, to transfer the MFSA’s headquarters into a bigger and costlier building at a massive cost to taxpayers, had The Quad Ltd as one of the bidders.

The Quad – a development of towers a stone throw’s away from the current MFSA premises in Mriehel – submitted a bid to host the MFSA for €38 million.

The controversial development, still under construction, is owned jointly by Gasan Enterprises and Tumas Group of which Fenech was a major shareholder and CEO.

“This alone, apart from many other things, is enough to show Cuschieri’s conflict of interest because of his cosy relationship with Fenech,” a senior MFSA official told The Shift on condition on anonymity.

Friends in the right places

Considered to be part of the inner circle of disgraced former Prime Minister Joseph Muscat’s administration, Cuschieri was put at the helm of the Malta Gaming Authority soon after the Labour Party was elected to govern in 2013.

There, Cuschieri quickly gained notoriety for his spending sprees and direct orders, including the transfer of the Authority’s offices to a new building at Smart City. Its refurbishment costs, given through a raft of direct orders, ran into millions.

Disgraced former Prime Minister Joseph Muscat inaugurating the new MGA offices at Smart City in 2016. Photo: DOI

Following the 2017 general election, it was an open secret that Cuschieri had set his sights on the post of MFSA boss. At the time, the regulator’s legislative framework did not allow for a CEO so a new law was passed to create a structure to fit Cuschieri’s aspirations.

Licari followed him a few months later.

In February 2018, The Times of Malta had revealed that the OPM had appointed him to head the MFSA through Cuschieri’s close friend, then-Chief of Staff Keith Schembri. His official appointment was rubber-stamped by the MFSA board, headed by Professor John Mamo in April of the same year.

It was only a month after that Cuschieri travelled to Las Vegas with Fenech.

A €25 million deficit

During the first full year of Cuschieri at the helm of the MFSA, the Authority ended up with a deficit of €25 million forcing the government to back it up with taxpayer funds.

Cuschieri also axed the most experienced officials at the MFSA, offering them a lucrative early retirement scheme and replacing them with officials closer to his ‘management style’.

He also clashed with one of the MFSA’s governors, former Labour Minister Joe Brincat, who has filed a case in court on Cuschieri’s abuse of power. Cuschieri remained in his position.

According to his contract, Cuschieri has a basic salary of €120,000 a year, topped by a number of other perks and benefits. It is estimated that he currently earns some €12,000 a month, paid by taxpayers.