PL, PN report only half of their problematic finances

Beneath the tension underpinning the latest exchanges between Malta’s major political parties lies a common weakness that both wish to conceal.

After a five-year window in which the Labour Party had the luxury of criticising the Nationalist Party for failing to submit its audited accounts, Opposition Leader Alex Borg has finally put the matter to rest.

As outlined in an article The Shift published on Monday following the PN’s press conference on the subject, the accounts submitted by both major parties do shed some light on their opaque financial operations, but only to a limited extent.

The whole truth about both PL and PN’s finances can never be revealed until their respective media production outlets, ONE Productions Ltd and Media.Link Communications Company Ltd, are compelled to file audited accounts with the Malta Business Registry.

One of the worst-kept secrets in Maltese politics is the fact that both major parties use their commercial entities to avoid disclosing how much money is being paid in quid pro quo advertising and conceal the extent of their financial liabilities.

This non-secret was tacitly acknowledged in statements issued by both major parties about each other’s finances earlier this week.

Borg had hardly left his podium on Monday before being chased by a ONE journalist to explain how the party’s liabilities were reportedly over €30 million as recently as this summer, only to be apparently revised downward to €11.7 million in the party’s latest set of accounts.

In its response, the Nationalist Party candidly stated that it submitted its accounts “in the same way that the Labour Party itself” did – by completely excluding “the finances of subsidiary companies” which “do not form part of a party’s accounts”, going as far as claiming that the “the accumulated debt of the (Nationalist) Party and its commercial companies is in the public domain”.

That claim is simply not true.

As can be seen in the screenshots above, Media.Link has not submitted any kind of audited accounts for the past two decades. ONE Productions’ latest entry dates back to 2012, with insiders insisting that ONE was left with millions of euro in debt.

To make matters even more convoluted, the Nationalist Party’s accounts over the past four years show that the party has had to repeatedly waive bad debts accumulated by subsidiaries like Media.Link, further suffocating its own credit.

The Labour Party, meanwhile, relies on bank overdrafts, mainly from the government-controlled BOV, and places its extensive property holdings as collateral, even though its own auditors pointed out significant “uncertainty” about how those holdings were evaluated. Most of Labour’s property portfolio was acquired from government in very shady circumstances.

Though the PN’s Alex Borg in particular claims to want “total transparency” within his party, the reality is that neither party can claim to be transparent or fiscally responsible while hiding behind the fact that the law does not oblige political parties to submit their subsidiary accounts to the Electoral Commission.

The fact is that their subsidiary companies are nonetheless legally obliged to file their accounts with the Malta Business Registry just like any other company, and they haven’t done so in decades.