Prime Minister Robert Abela’s decision last year to oust former Finance Minister Edward Scicluna and install his then Chief of Staff, Clyde Caruana, in Scicluna’s place is costing taxpayers tens of thousands of euros in extra payments to sweeten the deals for those involved, The Shift can reveal.

Engagement contracts seen by The Shift show that 74-year-old Scicluna only agreed to step aside after the prime minister accepted his demand that he be given the post of Central Bank Governor in compensation, while the then-incumbent, 68-year-old Mario Vella, in his turn refused to give way until he was granted a new role and a hefty financial reward.

Mario Vella was appointed Central Bank Governor in 2016 by disgraced former prime minister Joseph Muscat. He agreed to relinquish his post six months before his five-year term expired in order to allow for the switch with Scicluna only after Abela created a new, specifically-tailored role for him as Special Commissioner for Economic, Financial and Trade Relations with the UK.

This new position, however, is seen as entirely superfluous: the duties it comprises have so far been carried out by Malta’s High Commission based in London along with the Ministry of Foreign Affairs.

According to Vella’s contract, seen by The Shift, the former Labour Party President was able to extend his ‘working life’ period by at least another six months, while also being paid an extra €57,000 in taxpayer funds.

As Central Bank Governor, Vella would have ended his career on a €100,000 financial remuneration package by the end of next month. Under his replacement Special Commissioner role, which ends in December 2021, he’s enjoying a one-year contract with a pay of €114,000.

Vella’s new contract also offers the opportunity of a further extension of his term of office, if the prime minister so decides.

Finance Ministry sources told The Shift that Minister Caruana has already told Abela that he doesn’t recommend Vella’s contract be extended, as the role is unnecessary and was only created to placate the disgruntled ex-central banker’s demands.

Caruana appears to have made his views publicly known in order to force the prime minister’s hand and ensure he rejects any possible future demands from Vella.

Shunting Vella sideways was only the first part of Abela’s manoeuvres to create a vacancy in the Finance Ministry for Caruana. The second part of the puzzle – convincing Edward Scicluna to bow out – also came with a substantial added burden on taxpayers.

Scicluna initially resisted Abela’s pressure to resign, and – despite leaks to the press from Castille announcing his premature departure – only conceded after the government caved in to his stipulation he be appointed Central Bank Governor.

Furthermore, the septuagenarian, already in receipt of three public pensions, insisted the Central Bank Governor’s pay be increased by 38% to €138,000 for the five years of his appointment.

Mario Vella gets to decide whether to redact his contract

Vella, the Tripoli-born economist, trained in communist Germany in the Mintoff-era and Head of the Malta Development Corporation in the years of bulk buying and State intervention in the economy, was also given special treatment by the government where it came to the disclosure of his taxpayer-funded contract.

Following a request under the Freedom of Information Act by The Shift two months ago, the Finance Ministry’s permanent secretary, Alfred Camilleri, first asked Vella whether he wanted to redact any parts of his contract, before passing the information on to The Shift, as stipulated by law.

Vella instructed Camilleri, one of the few surviving permanent secretaries from the PN era, to hide certain information related to his €14,000 in perks, arguing that the public had no interest in these details.

Camilleri obliged accordingly and redacted the copy of Vella’s contract sent to The Shift.