Opposition withdraws backing for MFSA Chair

The Opposition withdrew its backing for the chairman of the Malta Financial Services Authority yesterday following a poor performance by John Mamo during a parliamentary committee meeting considering whether he will retain the post for another three years.

The prime minister has nominated Mamo for a second term at the helm of the financial services regulator, but this time round that support was withdrawn as the chairman was grilled by Opposition MPs about a stream of scandals that have rocked the MFSA on his watch.

It was only through the support of government MPs on the committee, who command a majority, that Mamo’s nomination was approved.

Mamo defends the former CEO

The 74-year-old, a respected businessman and a law professor, was clearly unprepared for the grilling, at times even getting the basics wrong, like the name of the permanent secretary at the finance ministry.

Mamo shrugged off suggestions that the MFSA’s reputation continued to suffer on his watch and dismissed concerns about how former CEO Joseph Cuschieri had run the ‘independent’ institution.

“It was only the incidents that we had with Pilatus and Satabank which put the spotlight on us, as on a national level there weren’t any major problems,” Mamo said, prompting the PN’s Shadow Justice Minister Karol Aquilina to point out that a prime minister was forced to resign.  Mamo seemed to be “living in another country,” Aquilina said.

Defending Cuschieri, Mamo insisted that “his CEO” was very competent and someone who “installed massive changes at the MFSA”. Mamo disagreed that Ccuschieri had exceeded his authority or abused his position.

Cuschieri’s extra payments ‘with Muscat’s blessing’

Confirming reports by The Shift, Mamo said that Cuschieri did in fact ask to be paid the honoraria reserved for board members attending meetings, on top of his financial package of €150,000.

Mamo, admitting that it was a mistake to agree with this, sought the consent of then Prime Minister Joseph Muscat and former Finance Minister Edward Scicluna.

Asked why, as the chairman of an independent regulator, he needed to consult the prime minister, Mamo said: “It is the government who appoints governors”.

Following resistance by the other board members, the finance ministry told Mamo the CEO was not entitled to receive extra payments, and this went against public service procedures.

Payments to Cuschieri were stopped and the board asked the former CEO to return the money he took, Mamo told the committee. He did not say whether Cuschieri has in fact paid back the €23,300 he took in extra payments.

It is important to note that in a Right of Reply sent to The Shift by Cuschieri through his lawyer Charlon Gouder, the former CEO denied the facts revealed by this news portal, now also confirmed by Mamo.

A ‘vavata’ by Cuschieri and Licari

Asked to explain the breach of ethics by Cuschieri and Edwina Licari when travelling to Las Vegas with Yorgen Fenech, who is accused of commissioning the murder of journalist Daphne Caruana Galizia, Mamo said the two had been friends for a long time and theirs was a childish transgression (“vavata”).

“When I got to know about this, as Cuschieri didn’t tell me anything about it until it appeared in the media, I immediately said that this was not on and was a breach of ethics. However, at the time, Fenech was not yet accused of the death of Caruana Galizia,” he said.

“What Cuschieri and Edwina did was an error of judgment on their part. However, we are all human and there were many instances where Ministers go on boats as so on,” he insisted.

“This was a silly mistake (“ċuċata”),” Mamo said.

‘No regrets and no apologies at all’

Karol Aquilina drew Mamo’s attention to the fact that Caruana Galizia was “killed”, not ‘died’, and he asked why the inquiry on Cuschieri and Licari remained unpublished.

“There are certain things that should not be published so that the MFSA’s reputation is protected,” Mamo said, while simultaneously saying he was all for transparency.

Insisting that money laundering was not something unique to Malta, he assured MPs there was nothing he regretted about his conduct. “No regrets and no apologies at all,” he boldly told MPs.

The four government MPs, including chairman Anthony Agius Decelis, all voted in favour of the prime minister’s nomination without asking Mamo a single question.

For the Opposition, Karol Aquilina, Carm Mifsud Bonnici and Robert Cutajar voted against Mamo’s second term.