Whilst hoping Clyde Caruana pulls it off in the last minute and saves the country from grey-listing by the FATF, his cabinet colleagues are still getting ready for the worst. Mind you, that doesn’t necessarily mean what it should mean. If they haven’t undertaken the reforms that were necessary when they were still in time to save the day, they’re not going to start now.
They’re preparing instead to blame everyone else to ensure they carry no responsibility for this impending catastrophe.
In a podcast last week I made a list of decisions entirely in the government’s control that would have put us in a better place ahead of this vote. Of course, it is hard to guarantee success to a government that confirmed as our chief financial intelligence official the bureaucrat who gave Pilatus Bank a clean bill of health.
And can you imagine how much salt the FATF investigators needed to be able to digest briefings they received from the Malta Police as they also read about Lawrence Cutajar, Silvio Valletta, Ray Aquilina and Ian Abdilla?
The FATF decision is only really final on Wednesday. Let’s consider both possible outcomes.
Clyde Caruana declared today that if we do pass the FATF test our program of reforms will continue at the same pace. What fucking reforms?
Let me give you an example just from this morning. Edward Zammit Lewis was speaking at a public meeting where he spoke about his government’s alleged commitment to the participation of civil society in institutional reforms intended to increase transparency.
At the meeting, I asked him if he started consultations with civil society about transposing the EU’s new whistle-blower directive which must be transposed into Maltese law by Christmas time. It was a rhetorical question. I know he hasn’t. Many EU countries have already adopted the directive which is vital to protect people who expose wrongdoing and corruption even in private companies. We haven’t and we won’t for as long as we can get away with it.
Edward Zammit Lewis completely dodged the question on public consultation and said he’ll be looking at what needs to change in our law to implement the Directive. The reluctance was palpable.
A proper whistle-blower law could have opened up the rot at Pilatus Bank and at Satabank far sooner. It could have exposed sooner the use of Malta by Nicolas Maduro’s sons to launder proceeds from embezzled money from their country’s state-owned petroleum company. It could have blocked the illicit activities here of Ilham Aliyev’s children. It could have exposed sooner mafia infiltration in our gaming industry.
And that’s just the things we know about. The whole point of whistle-blower protection is that if properly given we’d know more than we know, sooner than we would otherwise learn about it. And we’d be able to do something about it.
That’s the sort of thing that would send a signal to the world that we’re serious about fighting financial crime. It’s the sort of thing that enables us to put handcuffs on crooks and to retain the trust of the rest of the world.
Instead, the government is trying to reconcile its unwillingness to enforce laws with its promise to do so in the future. That is a reconciliation the decision-makers at the FATF are, understandably as I see it, struggling to make.
Consider the commitment of the Maltese political class to cooperate with the rest of the world to block money laundering. And then consider the commitment of the Maltese political class (now across both political parties, would you believe?) to continue to sell passports in a secretive, corrupt scheme designed for magnates who want to hide where they’re from and who they are, often for the specific purpose of laundering money.
We want the world to trust us because, you know, we’re Maltese, but we want to continue to help Vladimir Putin’s oligarchs pretend they’re Maltese. Do we really think that sort of logic is going to work at the US Treasury and the State Department?
Ministers are now stuck. The only roadmap they’ve ever driven with was the one Joseph Muscat drew up before 2013: the one where the standing enjoyed by Malta after 25 years of a reasonably normal PN administration, the readiness of our financial services laws, EU membership and accession to the euro could now be exploited by organised crime.
There are no alternatives to consider.
Expect the government to turn all fascist if the FATF vote turns against us.
Some examples of what I mean by fascism.
First, foreign hating. Expect the unleashing of classic rhetoric that in the Maltese historical experience recalls Dom Mintoff but is the language used by pariahs on the world stage who argue that their isolation from the rest of the world is not a consequence of the corruption of the government their people choose but because of some international conspiracy.
Robert Abela will dust off speeches by Mu’ammar Ghaddafi, Idi Amin, Nicolas Maduro, Mahmoud Ahmadinejad and Robert Mugabe and make them his own. He’ll speak about foreigners being “envious” of Malta’s success. He’ll speak about a neo-colonial determination to overrun Malta’s sovereignty. He’ll speak about Americans flexing their muscles. He’ll speak about the UK’s nostalgia for the Empire. He’ll murmur something about the Germans finding alternative ways of bombing the country or he’ll get one of his ready-packed cronies like Jason Micallef to say it for him.
Yes, it will have come to this.
Second, fifth-column chasing. Consider Robert Abela’s perverse accusation that Bernard Grech wrote to the FATF in order to bring about Malta’s grey-listing. He wasn’t, for the sake of clarity, criticising Bernard Grech for changing the PN’s policy and committing to retain Malta’s passport scheme. He was criticising Bernard Grech for committing to the FATF that a change in government would not change Malta’s commitment to reforms. For now, Robert Abela is playing with stupid rhetoric intended for his faithful at Sunday school.
It will turn ugly soon. They’ll turn on every MEP, every journalist, every activist, on anyone who has ever dared do anything but support the government’s policies, however corrupt and misguided they have been.
This is the logical extension of blaming Daphne Caruana Galizia for her death, drawing the attention of the world to the stench of the cesspit we live in.
Third, expect a tighter clampdown on civil liberties. The sense of crisis that will hit us if the FATF outcome is sour will be palpable. It is incredible to me that until these last critical hours most players in the financial services and ancillary industries stayed cool about the risk we were facing. We’ve been on FATF notice since the swirling Moneyval report of 2018. And we’ve been aware of the exposure of corruption in our system far before that.
If we’re pushed out of the white list, the prophecy that we’ll behave like countries excluded from it will fulfil itself. We won’t need to be like the UK and Germany because those nasties are “jealous” of our great government. So we’ll look up to Albania, Cambodia, Myanmar, Nicaragua, Pakistan, Uganda and Yemen as our models. We’ll grow into the category we’d have been put in. And, for the delight of those whose inveterate racism comes through with every snide Facebook comment they write whenever my ugly mug shows up, we’d also be joining the club that includes Zimbabwe.
Before the 2017 election, Daphne Caruana Galizia informed, at the risk and eventually at the cost of the loss of her life, the financial services industry about the Panama Papers and Pilatus Bank and Egrant and all the other rubbish. In 2017, we had general elections and the opportunity to fire Joseph Muscat’s government. Of course, financial services operators do not alone control the outcome of an election. But there’s no evidence to suggest that the corruption message reached the voting intentions of anyone who is going to most directly suffer the consequences of what things may come.
I’m thinking of all those real estate agents who before 2017 worried that the PN’s moralising would slow down the gushing stream of big cash bonanza. That’s just one example of the next circle out around the inner core of financial services operators. It’s just one example of people who should have known better, who should have had the foresight to avoid what seems likely to be inevitable now.
And Labour will try to retain the mobilised support of these operators by unleashing the most horrific slander yet to discredit the few people who actually warned them what would happen if they continued to support “Muscatonomics”.
The brutal victimisation of the government’s critics will need unprecedented levels of abuse. Partisan propaganda will heighten its dose. Intimidation and strategic lawsuits will multiply. Opaque public spending in online media and manipulated content in the press will increase. Information will be covered up and requests for inconvenient data in the government’s possession will be met with more intense harassment.
Governments can experience one of two possible outcomes from an economic crash like the one that might happen if we are grey-listed. They can lose popularity and be overcome by the anger of the population who will look for alternatives. Or they can consolidate popularity and enough public support by creating external enemies and organise their lynching.
Remember Daphne Caruana Galizia. But remember also Simon Busuttil and others. And that was when the economic going was good.
If what we find when we emerge from covid is the persistent cancellation of orders for new business, if the order book at all those law offices, accountancy firms, and real estate branches dry up, if demand for rented property peaks, if banks increase their costs and cut their services, if buying and selling to and from Malta becomes harder and more expensive, if the government is required to spend more just to borrow money, if the tax burden is increased, if well-paid jobs are lost and the creation of relevant and equivalent new ones does not keep up, if inflation is driven up by the vibrancy of the rival economies from whom we import our goods, the government will have no choice but give us someone to blame or we will blame them instead.
For several years now it has not been easy to be a government critic. The organisation with the Constitutional responsibility to fulfil that role, the Nationalist Party, has gone through phases of imitation, complicity and now, timid and barely consistent resistance. Whatever its intentions, the Parliamentary Opposition is a mere shadow of what it should be in the present circumstances. It has not yet captured the public’s imagination as an immediately and obviously available alternative to Robert Abela.
In the years since Daphne Caruana Galizia was killed, it has become harder to be a government critic. This, after all, is a country where the government’s “harshest critic” as they describe her, ended up blown up. It’s still a country where Glenn Bedingfield stands up in Parliament to call peaceful protesters outside Parliament “vandals of free speech”. And when I challenged Edward Zammit Lewis about that this morning, the Justice Minister reminded me Glenn Bedingfield is also eligible to free speech. Because a government’s whip requires protection, he seemed to suggest.
It is not a reason to hope we pass the FATF test, but if we don’t, it will be the hardest it’s ever been to be a government critic. It will be an act of volunteering as fodder for the baying mobs. After all, someone has to be blamed and I don’t see Ministers lining up to assume responsibility.
That’s still not the worst thing about all this. The worst thing is that no one is sitting down to plan what the economy that our children will want to work in will look like. We’re in the blame game but we’re not in the game of drawing up policies and initiatives to give students growing up in schools right now a future to look forward to.
As things stand we still want to sell people our passports, even as we’re hoping to be passed by a storm that could have people who only own a Maltese passport look where they can buy another one from some other country.
I claim no extra points for the irony of it all.