Joseph Cuschieri spent millions to get rid of top MFSA officials

Disgraced former MFSA boss Joseph Cuschieri did not even read the terms of a generous early retirement scheme (ERS) he approved in 2019 to remove the most experienced management members.

This emerged from a case before the Industrial Tribunal, which found him guilty of irregularly terminating the employment of a top officer.

The MFSA was ordered to pay the officer €414,000 in compensation and reinstate him in the same position he held.

While accusing Chief Operations Officer (COO) Reuben Fenech of drawing up flawed terms in the 2019 early retirement scheme, the tribunal concluded that Cuschieri was primarily responsible for the scheme’s terms and that “the fact that he admitted to not even reading the two-page document” is not an excuse to avoid responsibility.

The MFSA has always declined to state how much Cuschieri’s early retirement scheme cost taxpayers.

The Shift is informed that this amounted to several millions, with many officials paid more than €150,000 to pack their bags and leave.

Cuschieri used the scheme to create new top management positions, in which he employed his friends, including Edwina Licari, who used to work with him at the Malta Gaming Authority.

The 2019 scheme

Investigations by The Shift revealed that in 2019, a few weeks after Cuschieri replaced Joe Bannister at the top post of the MFSA, he started looking at ways to remove the organisation’s top management.

Instructing his COO to draw up an early retirement scheme, he obtained a blueprint from the Central Bank, which had already implemented a similar exercise.

According to the scheme, MFSA officers with 25 years of experience or within six calendar years of retirement could apply and be given a lump sum equivalent to two-thirds of their annual salary until the date of reaching retirement age or three times their salary, all in a lump sum.

According to good governance rules, such schemes usually include a revolving doors clause so that whoever is eligible retires and does not find another job in the public sector. This clause was not included in the MFSA scheme.

In court, the COO explained that Cuschieri wanted a simple scheme to remove certain top management members and make it easy for them to leave.

While Cuschieri admitted that even the finance ministry’s permanent secretary had said the scheme should have a revolving doors clause, neither he nor the board of governors nor the executive committee members ever mentioned such an option.

Fenech told the court that Cuschieri was so keen on using the scheme and getting rid of people that he even discussed with a minister the future of an MFSA official who was going to be given the lump sum even though he was already working within a ministerial secretariat.

A raft of abuses

The scheme led to rampant abuses, which neither the MFSA nor the finance ministry ever investigated.

For example, Cuschieri told Director of Human Resources George Spiteri to resign and opt for the early retirement scheme. After receiving his lump sum, Spiteri was immediately employed in the same position at the Malta Business Registry – another government agency – instead of retiring.

Also, then-Head of Enforcement Anton Bartolo, Director of Human Resources Marisa Attard, and Head of Banking Supervision Ray Vella, were all told by Cuschieri to take the scheme.

Many others in lower grades were also shown the door through the scheme. Many of them got another job in the public sector.

Instead, Cuschieri started recruiting his people. Cuschieri admitted in the tribunal hearing that he used to headhunt people he knew and put them on the MFSA’s payroll.

The tribunal noted that this approach was incongruent with principles of transparency, management, and human resources and not in line with the MFSA staff rules.

Cuschieri was forced to resign in 2021 following various scandals he was involved in, including a free trip to Las Vegas with one of his new recruits, Edwina Licari, financed by businessman Yorgen Fenech.

Despite his record, now confirmed by the Industrial Tribunal, Prime Minister Robert Abela gave Cuschieri a new government job earlier this year, making him the CEO of a €700 million government agency (Project Green).

In August, The Shift reported that Cuschieri was back to his old habits. He spent some €1 million on a recruitment drive, putting no less than 19 new managers on the agency’s payroll, primarily friends and acquaintances, and awarding them high salaries.

So far, the government has ignored calls for Cuschieri’s dismissal from any public role.