The watchdogs that didn’t bark

If the FATF had any doubts about the need to greylist Malta, they will have been expunged by how the matter has been discussed in Malta since. We should consider the compromising silences as well as the embarrassing things said.

First, the watchdogs that didn’t bark; or, rather, the pussycats that didn’t miaow.

Several economic institutions and constituted bodies issued statements after Wednesday’s news. But not the Central Bank of Malta or the Malta Financial Services Authority. As of the time of writing (yesterday), their websites haven’t carried a new press release since the greylisting.

Don’t they have anything to say? They are directly concerned with the calamitous news. They are supposed to be autonomous bodies — but, apparently, with nothing autonomous to say. The FATF must be impressed.

I can understand, of course, that it would be embarrassing for Edward Scicluna, the governor of the CBM, and John Mamo, chair of the MFSA, to issue a statement. Scicluna was finance minister until last year, and he had a significant part in the making of this mess. Mamo is the man who, before parliament, dismissed the gravity of the compromising behaviour in which two of his then top officials were involved.

If either Scicluna or Mamo had issued institutional statements of reassurance, therefore, it would have caused great outrage. But they would have heaped ridicule on themselves had they issued a stern statement, when they were among the causes of the problem.

They have therefore chosen the third option, silence. It simply confirms the bind they’re personally in. Their compromises have compromised them to the point where they choose to keep silent rather than do their minimal duty of issuing a statement, like every other self-respecting institutional player.

They’re no longer in a position to do their job effectively: to be visible guarantors of the autonomy of the institutions they lead. They should resign, the best thing they can do to help us get started on the path to recovery.

Next, there have been the narratives to explain what brought us to this point and the way forward.

About the real causes and blame, Marcus Pleyer, the President of the FATF, was as clear as a man in his position could be. He said that Malta had addressed the issues on paper but there remained serious doubts about the will of the authorities to crack down on criminal activity by applying sanctions and conducting high level prosecutions.

Here’s the six-word translation: The crooks are still running around.

So what’s with all these platitudes about the hard work that’s needed by everyone, the entire country working together, so that we can get off the FATF’s grey list? What’s this about everybody needing to be part of the process? It misses the entire point of what Pleyer said.

The moment we say that we must all work hard and be part of the process, the outstanding cause is misidentified. The blame is diffused. The government is indirectly absolved of both causing the problem and not doing enough to solve it.

Every time it says the greylisting is “unjust” because it addressed 55 out of the 58 serious issues identified in 2019, the government unwittingly condemns itself.

The 58 serious issues reveal just how much the Joseph Muscat governments let things go to seed.

The 55 addressed issues reveal that the real remaining problem was that Robert Abela’s government was not trusted enough to implement them — at least not without some external shock.

The Malta Employers Association has characterised the shock as a ‘terrible auto goal for the economy’ all due to a ‘minority of dishonest politicians and businesses’. We all know what the MEA means. All analogies have their limits, however, and this one suggests we were all playing on the same team. Were we?

The proper image is of a crony government, in league with some crooked businessmen, playing against the rest of Malta’s economic players, who are handicapped by unfair conditions and intimidated by the government’s ultras in the stands. The government committed a variety of fouls, received several yellow cards, but ignored them. Finally, it got a red card.

The limits of the analogy are reached here. Red cards usually benefit the other team. In this case, however, the red card has seen even the honest players punished. Although, if the crooks are punished, then the honest team would in the long run benefit — they’d be able to compete on their merits.

The least we can do is recognise where the blame lies and say so. It’s our best chance of getting the government to summon the political will that’s so far been lacking.