KPMG’s attempt at auto-absolution just does not work. It’s your bog standard ‘We did what we were supposed to do but we can’t be specific in answer to any question because we owe our customer the protection of their secrets’.
KPMG may or may not see what’s happening here. They may or may not have read the book about Arthur Andersen and Enron. They may comfort themselves with the notion that if dodging questions works for Joseph Muscat, why should it not work for them? They can remind themselves that NexiaBT has done far worse and is still an incredibly successful audit firm.
This counts for nothing.
The excuse of professionals for their keeping the secrets of criminals or those reasonably suspected of crime just does not hold in these troubled times. If the law gives them this pretext, it is providing for what must clearly never have been intended.
Professional secrecy is intended to protect the interests of clients where these interests do not include the intent to defraud the state and the community. Then it becomes complicity.
If our laws do not empower – nay, force – professionals to reveal criminal acts when they become aware of them, they are rotten laws.
Lawyers need a degree of confidentiality to ensure that defence strategies are valid, but even lawyers are precluded from lying on behalf of their clients. Lying by omission is a lie nonetheless, however, and the time has come to examine the balance between what has become an unfettered right to defend any which way from Sunday against the interests of the rest of us.
If our laws are being used as cover for professionals to avoid assisting inquiries – judicial, executive, parliamentary, journalistic – into crimes, in order to learn lessons from mistakes and prevent their repetition, they should be knocked down and replaced by proper transparency rules. And if the opacity is some sort of competitive advantage to steal business from more stringent and more honest jurisdictions, then drop these laws anyway and find an honest way of making money instead.
NexiaBT refused to answer MEPs’ questions on Keith Schembri’s affairs because, they said, they were his own affairs and they were required to respect confidentiality. How is taking kick-backs on the state sales of passports a private matter?
KPMG refused to answer MEPs’ questions on Ali Sadr’s affairs because, they said, they are his own affairs and they are required to respect confidentiality. How is dodging sanctions against nuclear proliferation a private matter? It is as much a matter of public interest as any matter could be.
In a normal country, with what happened right now, Parliament should be approving urgently ad hoc legislation to give immunity to professionals (if they really need it) when publicly testifying about client malfeasance. We should have a serious public inquiry with public hearings, with powers to force sworn testimony and with terms of reference that establish what we desperately must know:
- How was Pilatus Bank licensed?
- What was known and by whom about Ali Sadr’s background when it was licensed and every day up to his arrest?
- Why were investigators at FIAU dismissed?
- Why did the Managing Director of the FIAU resign?
We need a published record of:
- Every meeting Ali Sadr had with the prime minister, government ministers, MFSA board members with details on what was discussed.
- Every meeting or communication from the advisory unit of KPMG with any of the above.
- All due diligence documentation conducted into the affairs of Pilatus directors and senior management.
- All periodic review reports and all communications between any regulator and Pilatus Bank throughout its life.
- The list of Pilatus Bank account holders and the volume of their transactions.
- All suspicious transaction reports and reports of the action taken thereafter.
- All PEP due diligence reports.
The professional community should be in the streets insisting this happens. All those who work at KPMG, at PWC, at Deloitte, at EY, at every law firm, accountancy firm, bank, or measly exchange bureau should right now be insisting this mess is cleaned up without any further damaging delay.
Surely they no longer hope, as they never should have hoped, that this god-awful mess, which taints them by association, could continue to be covered up. Surely they realise that these last 12 months do not close and wind down by themselves.
Twelve months ago Daphne Caruana Galizia revealed some of the filth hidden at Pilatus Bank. Six months later she was killed. Six months after that the Pilatus Bank catastrophe has never been bigger and this black hole will suck everyone in unless the professionals themselves put a stop to it.
All those accountants, lawyers, bankers and tellers understand financial services and they address the rest of us like they possess some esoteric knowledge none of us have.
Maybe they’re right.
But then why do they expect people who do not understand the complexities of this business to keep it in a sound state? Why do they think that by silently and gravely protecting their turf and their clients this storm will pass and everything can go back to the happy days when Pilatus Bank was not even a twinkle in a Persian’s pubescent eye?
If you know one of these esoteric creatures, ask them why do you stay silent when all you’ve worked so hard for is being willfully set alight by criminals with deep pockets and those they’ve sucked down with them?