EXCLUSIVE: MFSA asks former CEO to refund over €23,000 in ‘extra pay’ received

The financial services regulator – MFSA – has asked its former CEO Joseph Cuschieri to refund more than €23,000 in extra payments he received during 2019 and 2020, over and above his lucrative financial package, following revelations of wrongdoing by The Shift.

Last October, during an investigation into abuse of power and breach of ethics by the former MFSA boss, The Shift had revealed that Cuschieri, put on a €150,000 financial package in 2018 after being handpicked by Castille to head the financial regulator, was also drawing an extra pay for attending board meetings even though that was part of his duties as CEO.

The Shift had revealed that it was only the chairman of the MFSA, Prof John Mamo, who was aware of these unauthorised payments while the rest of the board was kept in the dark. At the time, the MFSA refused to give any details about the unauthorised payments despite repeated questions sent.

Further investigations by The Shift show that Cuschieri was given a total of €23,233 in extra payments for attending board meetings over the last two years. Payments were stopped abruptly in 2020 when the board got wind of what was going on and put a stop to Cuschieri’s extra payments, according to one of the governors.

The Shift is informed that Cuschieri was even paid more than the other governors of the MFSA board, who were paid an average of €12,000 a year while Cuschieri was getting €20,000 a year.

The only member of the board who was getting more than Cuschieri was chairman Mamo who was paid an honorarium of €35,000 a year in 2019. It is not yet known whether Mamo was also given other benefits, paid through MFSA funds, on top of his honorarium.

Cuschieri resigned from his post as MFSA CEO just a day before the conclusions of a ‘Board of Review’ which censored Cuschieri for his actions. The government has so far refused to publish the Board’s conclusions.

The review was held following revelations that Cuschieri, together with Edwina Licari, General Consul of the MFSA, flew to Las Vegas on a trip financed by Yorgen Fenech who is currently accused of commissioning the assassination of journalist Daphne Caruana Galizia. Fenech has told the Court that Joseph Muscat’s former chief of staff, Keith Schembri, was involved.

While the financial regulator stated that “the Board of Review’s conclusion regarding Mr Cuschieri leads the MFSA Board to ratify his resignation,” no action was taken against Licari.

“As regards Dr Licari, the Board of Review’s conclusions do not warrant her continued self-suspension,” the MFSA board said.

At the time of the trip in 2018, Licari was still with the Malta Gaming Authority. Fenech has casinos regulated by the Authority.

Following the trip, Licari had resigned from her MGA post and was selected by the MFSA as its new General Council, a new position created by Cuschieri.

Licari was the only one interviewed for the €100,000-annual post. Her interview was conducted by Cuschieri who was accompanied by Mamo.

Despite her flagrant breach of ethics as a result of the Las Vegas trip, the MFSA board decided to continue to employ Licari as the financial regulator’s second-in-command.

The Finance Minister had asked and obtained Licari’s resignation from the board of the Financial Intelligence Analysis Unit (FIAU), the anti-money laundering watchdog, where she was representing the MFSA.

Moneyval is currently looking at Malta’s compliance with supervising anti-money laundering legislation, where the MFSA and the FIAU are the prime actors.

A greylisting by Moneyval – a possibility indicated in its first preliminary report –  is deemed by the financial services industry as the beginning of the end of an industry employing thousands of professionals.