When is a gift, not a gift?

The issue of civil servants giving and receiving gifts has always been a delicate issue and one that could give rise to various accusations, which led to the National Audit Office to recommend that a clear set of guidelines and definitions be put in place for the public sector.

In a report reviewing the ethical framework guiding public sector employees, the NAO noted that there were differences in the different policies when it came to accepting gifts. It looked into the ethical guidance provided by the Public Administration Act, the Code of Ethics and the Public Service Management Code (PSMC).

So, for example, the Code of Ethics has provisions about public employees not accepting gifts while the PSMC extends its provisions to any member of the household. The PSMC also specifies that gifts received from foreign dignitaries were to be handed over to the State and recorded in inventory when received on behalf of the State.

“This, together with the lack of a clear definition of what is meant by gifts and gratuities, and what is deemed as acceptable and what is not, create an added element of uncertainty. Our concerns regarding the absence of a definition of gifts and gratuities and the possible inconsistency that may arise in relation thereto can be addressed through better regulation,” the report said.

The NAO called for clarity in the definition of what constitutes a gift and said thresholds were set to ensure that public employees were treated fairly and equally.

It referred to employees of the European Commission as an example as these may accept gifts worth less than a specified value without requiring any permission.

Gifts that marginally exceed this value may be accepted provided permission is granted, while those with a value that substantially exceeds the threshold should not be accepted.

The issue of receiving gifts by public employees – especially those in top positions – has always been a contentious one. There was former Finance Minister Tonio Fenech who accepted a traditional Maltese clock from oil trader George Farrugia just before the 2013 general election.

This incident was milked by the Labour Party that incorporated it as part of its electoral campaign. Almost seven years after Joseph Muscat rose to power and became prime minister, it was revealed that he had also accepted gifts – of a far higher value – from murder suspect Yorgen Fenech.

Fenech ‘gifted’ him with three bottles of Petrus wine, the value of which runs into the thousands, and a rare Bvlgari watch worth around €20,000, among other gifts.

Muscat brushed off criticism, saying he would publish a full list of gifts he had received once he stepped down. The list was published and tabled in Parliament in reply to a question filed by Nationalist MP Karol Aquilina.

The NAO report looked into the ethical guidance based on the Public Administration Act, Code of Ethics and PSMC and assessed these against international benchmarks to identify gaps. It pointed out that, although the ethical framework was comprehensive, “there exists scope for improvement”.

Policies regulating the acceptance of gifts and gratuities were seen to be an integral part of efforts at addressing the rise of conflict of interest situations. “The general understanding is that public employees are expected not to ask for or accept gifts or gratuities from third parties that may condition their impartiality”.

However, in practice, it is not realistic or desirable, to categorically prohibit all gifts or gratuities, the NAO said. Certain gifts were of a token nature and strictly prohibiting these could lead to an adverse effect on the management of integrity.

It referred to the Organisation for Economic Cooperation and Development, which said that rather than enforcing a rigid “zero gift policy”, organisations were encouraged to develop a more “nuanced policy”.

This would mean establishing a maximum value for gifts with regulations and guidelines together with a register to record gifts of a certain value.

These considerations were also echoed by Transparency International in their promotion of the setting of clear thresholds. The NGO also emphasised that codes of ethics should provide a clear definition of gifts, which should also include physical gifts as well as hospitality and services.

Read the report in full.