Consulting fees or deferred bribes?

The police say they are investigating Joseph Muscat for what looks like a pattern of deferred bribes connected to the Vitals Global Healthcare fiasco as part of an inquiry being led by magistrate Gabriella Vella.

Okay, it covers how the government gave the concession to Vitals in the first place — a deal even Steward Health Care said was “mired in fraud and corruption”. But the magistrate knows about Muscat’s questionable payments, and she’s looking into them, too, they say.

Translation: they can’t open a new investigation because, mela, everyone knows the police can’t open a new investigation because we all have to ‘wait for the outcome of the inquiry’.

They can’t comment about ongoing investigations (or the lack thereof) either. “Kindly note that, in view of article 87 of the Police Act (Chapter 164),” the police spokesman said, “we are not in a position to confirm, or otherwise, such information”.

I’m sorry to have to contradict the spokesperson.

The claim that police can’t open an investigation into Joseph Muscat’s so-called ‘consulting payments’ because there’s a semi-related magisterial inquiry in progress is nonsense.

The law (the Criminal Code) clearly states that the police are duty bound to detect and investigate crimes, whether because they received a report or even if they otherwise become aware of a possible crime, and to bring them to justice.

Also, as any lawyer worth his salt will tell you, a magisterial inquiry or inquest (a more accurate name) is separate from the police investigation and is designed as a judicial manner of collecting and preserving evidence.

The two are meant to be running in parallel and complementing each other rather than acting as a hinderance or obstacle to investigation by the police. So much so that, as painfully explained by now Magistrate Marse-Ann Farrugia, it is only in those rare cases where the magistrate has reason to believe that the police are not willing or able to investigate a crime that the magistrate should, in the interests of justice, need to don an investigator’s cap.

So yes, they can — and should — open an immediate investigation, and if they haven’t, it’s because they’re deliberately sitting on their hands.

The other issue you should pay attention to is the deliberate shadow Joseph Muscat is casting on this issue.

When he sat down for that weird Times of Malta interview a couple of months ago, Muscat said he wasn’t doing any work for any companies related to the hospitals contractor.

Of course, he said this before news leaked about the payments he received two months after he was driven from office. But in this case, he may have uttered an accidental truth.

Muscat would like you to believe he lied. That he really was flogging his economic genius to the company that took over three public hospitals for €1, and he got the job because he was perfectly positioned to pressure his puppet successor.

This is called a “revolving door”. A civil servant or politician leaves their public sector job and takes up a job with a company in an industry they were previously responsible for regulating or legislating.

Industries hire people straight out of public positions because they want to gain access to government officials, or inside knowledge of loopholes they could exploit. It could also be a reward for ‘good behaviour’ — a job given as payback for helping that company while in office.

Such revolving door appointments happen surprisingly often in EU institutions. Mario Draghi is a good example. He was Director General of the Italian Treasury, left to join Goldman Sachs, and left there to become Governor of the Bank of Italy, spinning the revolving door so fast he should have been a wind turbine.

Some institutions guard against this, either through vaguely-enforced “codes of conduct” (the European Parliament), or actual laws requiring a three year wait between leaving government and taking a private sector job (as in France).

It should come as no surprise that Malta’s standards are deliberately vague.

In fact, Muscat-appointee Mario Cutajar, Principle Permanent Secretary in charge of public service, introduced changes on 18 June 2020 that set out new revolving door rules.

Directive No. 14 says employees who held public positions in regulatory or inspectorate bodies are supposed to wait two years before accepting a job from a company or NGO they dealt with while in government. But thanks to these new changes, the rules don’t apply to all top jobs. You won’t be surprised to learn the Office of the Prime Minister isn’t included.

There don’t seem to be any consequences for breaching the rules, either, short of vague “grounds for legal action to be taken by the Permanent Secretary of the respective Ministry.”

So back to Joseph Muscat’s ‘consulting’ gig.

It’s not ethical to pop over to the offices of the company that signed a shady deal with Konrad Mizzi and help that same company squeeze even more taxpayer money out of Malta. But it doesn’t seem to be criminal, either.

And if you’re going to complain about Joseph Muscat benefitting from the revolving door of public service to private consultancy, then you’d better take a look at what the Blue side did, too.

That was his sole defence: whataboutism.

Muscat’s whine of “two weights, two measures” prompted immediate denials from the former ministers he pointed his greedy finger at, but the tempest in a teapot he stirred up was a deliberate smokescreen.

As with any apparent confession from Muscat, it’s important to see what he wants you to look away from.

Being caught benefitting from a revolving door is the lesser of two evils. But what if his statement to Herman Grech was true, that he wasn’t doing any work for any companies related to the hospitals contractor?

If we take his statement at face value, then we have to ask if Muscat received €60,000 for services he’d already rendered.

To refresh your memory, Muscat received four payments of €15,000 each, with the first being sent in March 2020, two months after his resignation.

The money came from two companies: Accutor AG and Spring X Media. Both Accutor and Spring X Media were based in Switzerland, and both were run by Wasay Bhatti.

By some odd coincidence, Steward Healthcare sent €3.6 million to Accutor in early 2018, the bulk of it on the day they finalised an agreement to take over the running of three hospitals in Malta from Vitals Global Healthcare for the princely sum of €1.

In another odd coincidence, Accutor then sent payments to key individuals from the VGH deal, including Bluestone Investments director (and convicted fraudster) Ram Tumuluri, and VGH investor and Maltese passport buyer Shaukat Ali.

Accutor only paid the disgraced former prime minister after he left office, for what Muscat described as an ‘open-ended consulting agreement’ that ended suddenly in the summer of 2020, after his €60,000 had been paid out.

Accutor AG went into liquidation soon after and closed up shop.

Surely these coincidences are enough to wake even Angelo Gafa from the serenity of his slumber?

According to the Financial Action Task Force (FATF) — the very same global anti-money laundering body that put Malta on its grey list — a Politically Exposed Person (PEP) is “someone who has been (but may no longer be) entrusted with a prominent public function”.

The increased level of scrutiny they’re subjected to doesn’t end the minute they leave office, because the increased risk of financial crime doesn’t end there, either. In fact, the definition is deliberately open-ended: once a PEP, always a PEP.

The FATF also states that consultancy agreements can be used to hide the real reason behind transactions.

The payments Joseph Muscat received should have raised major red flags. They look very much like ‘deferred bribes’ — bribes promised for some service that are paid only after the politician has left office.

But we’ll never know for sure unless the police decide to investigate. Contrary to their ‘inquiry’ claims, there’s absolutely nothing holding them back.