Burning the candle at the Central Bank

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2018-08-02T10:29:44+00:00Thu, 2nd Aug '18, 10:29|0 Comments

Even if the guys at the Central Bank were dragged to their laptops in the middle of the night to mitigate S&P’s comments about the harm to the reputation of Malta’s banking sector, the damage is considerable.

We should never make the mistake of blaming S&P. It would be no different to the government blaming David Casa for the world finding out things are not working well here. The irony is that unlike most other banking disasters anywhere in the world, you really can’t blame the bankers for this one.

After all, Ali Sadr Hasheminejad was never really a banker. Sticking to the formal “alleged”, he was an alleged fraudster and clearing agent for people who needed their dirty money cleaned and recycled.

But he was allowed to operate by our government and there squarely lies the blame for our worldwide embarrassment today.

It never really ends though. When Daphne Caruana Galizia reported on Pilatus Bank, she was called a liar so he could remain in business. When Maria Efimova testified on what was happening in Pilatus Bank, she was called a Russian spy so he could remain in business. When Ali Sadr sued Daphne Caruana Galizia for 40 million dollars the government, directly or indirectly, consented so he could remain in business.

When he was arrested and detained by the FBI, the government defended Pilatus Bank so even from prison Ali Sadr could remain in business.

And when the Egrant inquiry was completed, the people who revealed what was happening at Pilatus Bank were branded liars, perjurers, fraudsters and conspirators, so that whoever Ali Sadr fronts for could remain in business.

Through this all, Malta’s banking regulators and law enforcement agencies stood a mile away refusing to interfere even as evidence was staring at them in the face. They did worse. When evidence they suppressed was published anyway, they threatened and continued to threaten sources with prosecution and prison.

The Central Bank is usually mightily pleased with itself when S&P reports on Malta’s credit rating. Now that S&P have raised a red flag, the Central Bank seeks to discredit them with arguments the Central Bank can be in no doubt are in no way relevant to the argument.

S&P said that Malta’s banking reputation “could be at risk” in spite of Malta’s recognised domestic financial stability. The Central Bank’s attempt to contradict this statement by reminded S&P of Malta’s domestic financial stability is hollow logic.

This is what Edward Scicluna needs to think about when he’s not blaming everyone for his fate. Everything else could be going swimmingly, but if we’re unable to show the world that we have the will and the means to stop money laundering it may all, one day sooner or later go down the drain.

What Edward Scicluna also needs to think about is why has everyone been so helpless in dealing with this problem?

Why does the Central Bank speak out in the middle of the night to contradict an international credit rating agency, but slept for months through the biggest banking scandal since the early 1970s?

Because this is the price the country pays when all independent institutions are transformed into extensions of the prime minister’s will and servants to his personal interests. His, and his friends’ of course. Someone like Ali Sadr Hasheminejad does miracles to our reputation. But you won’t hear Joseph Muscat or his satellites criticise him. They’ll rather blame David Casa instead.