If you provide professional advice on financial services, you must work within a published set of rules. You must prove you are trained and qualified to do the job, and if you’re caught acting unprofessionally you can be fined, or your license to provide the service is removed. This is done to protect your customers.
It happens when we hire lawyers or accountants (as much as it happens when we submit ourselves to the knowledge and skill of a doctor or surgeon). And it happens to clients of the financial services sector.
It doesn’t happen with the gaming industry. There are specialised lawyers and accountants or corporate services providers that know gaming regulations well enough. The generic codes of conduct of their respective professions regulate their behaviour whatever the industry their client works in. So though there are no specific rules for gaming, they still have rules to abide by.
But a particular animal has evolved out of veterans of the gaming regulator. Consider the announcement to his staff of Heathcliff Farrugia who told them yesterday he would be setting up with his former number 2 (also leaving the MGA) a company “to provide services to the industry”.
Yesterday I reported how the Tumas group got a non-compliant gaming company of theirs licensed by the MGA under Farrugia and his sidekick, Karl Brincat Peplow. With all we’re hearing about unsocial distances between MGA bosses and Yorgen Fenech, it is legitimate to wonder if there’s a connection here as well.
It is also legitimate to wonder if people who leave the MGA to provide “services” to the industry would have already been providing those “services” (the quotes amount to a nudge and a wink) while still working at the regulator.
It’s one thing not to have a revolving door policy which the MGA really should have. It’s rather that the MGA has become an incubator for these “service providers”. Joe Cuschieri was MGA boss in April 2018. In May 2019 he was “advising” Yorgen Fenech on getting licenses from the agency he used to run.
The question needs asking. What do these “services” that these “service providers” provide, amount to? What can a gaming company get out of a former MGA employee on early retirement that they cannot get from a reasonably competent law or accountancy firm or even a corporate services outfit?
Contacts. Doors ajar. Personal relationships. These are whispered ways of describing trading in influence, of monetising insider knowledge and personal relationships struck up while these “service providers” worked on the public purse.
Industry sources tell this website that law and accountancy firms have been told by their clients that they have received calls from people that have not yet left the MGA promoting their “services” after they leave.
You could be timid and call this unethical. You could find the poaching of other people’s clients distasteful. But this is worse than that.
This is sleazy corruption. There may be invoices and receipts, corporate brochures and flashy websites, but this is still retired civil servants exploiting the residual influence they enjoy to solicit kickbacks for ‘facilitating’ what customers are entitled to expect from a public authority in any case.
Whether it is right or wrong to perceive that without these “service providers” the process of regulatory applications could be delayed, slowed down or scuppered altogether, it is that perception that forces clients to retain these “service providers”.
That is the sort of sleaze that keeps investors away from jurisdictions where these wise guys are a fact of life. I worked in Zimbabwe and Nigeria. I know what this sort of thing looks like.
Business operators in Malta perceive this sort of thing. The EY Attractiveness survey ranks “stability and transparency of political, legal and regulatory environment” as the least attractive side of Malta now, scoring a depressingly low 19%. They’re more bothered by the quality of our regulators than they complain about our traffic jams.
This wasn’t a survey conducted specifically within the gaming industry. But how do you suppose they’re feeling today hearing that MGA officials that made them sweat beads of blood to complete their compliance documentation, flew on jaunts to Las Vegas with one of their competitors?
How do you think Scandinavian, Irish, French or whatever investors in Malta’s gaming industry feel today? Do you think they feel reassured about these outfits, that make the industry look bad, getting into the pants of Malta’s final arbiter on how and whether people are allowed to do their business here?
How do you think they feel when the people whose job it was to decide whether they should be licensed or not call them now to offer them their “services” in dealing with their successors in the agency?
This is how the tagħna lkoll “clique”, as Joe Cuschieri’s father in law called it from the president’s lectern, shame our country. It’s also how their greed and moral rot, their egocentrism, the interests of their close network, take the future away from this country.
And they dare call others elitist.