Milky Way to perdition

Parmalat was a success story that did not turn sour predictably. What was happening was well covered up for a long time. A number of the top people responsible for it seem to have carefully laid out their personal milky way through the dairy giant. Defrauding their own company, and thereby those who had invested in or lent it, they caused the giant to veer off the road. They ultimately lost themselves as well.

Fraud is always a massacre waiting to happen. In Parmalat's case, thorough investigation will take time to tell whether the conglomerate's auditors should have suspected that not all the milk was wholesome, that someone was adding toxic stuff to it.

Swift as the authorities have acted once the fraud was revealed, it could take years to pin legal culpability on those who, unfolding evidence strongly indicates, cooked the books. It is easy to make early arrests. It takes more than that as well as grim talk of scandal to bring the culprits to account.

Whether the funds allegedly siphoned off will ever be largely traced and recovered to any significant extent remains an open issue. Much more open are the fresh wounds inflicted upon the international corporate body. Bondholders who are effectively robbed cause more negative fall-out than shareholders who are fooled by their directors and management.

Fraudsters in the heart of the corporate palace tend to get away with their trickery for a very long time, not infrequently without ever being discovered. No one suspected, until very recently, that Parmalat could be a crooked business. To suggest that when the Italian company was interested in Malta several years ago the (Labour) government kept it out due to remarkable prescience is to stretch political rhetoric beyond well-worn tolerance.

To rush to make the Malta connection with Parmalat through a number of companies formed within the domestic financial services regime an intrinsic part of the scandal is unwise, in a national as well as narrower sense if, in a two-party system, politicians in opposition today will have to run the country some time tomorrow.

If they are hasty with sowing mistrust - rather than fulfilling their duty to try to establish facts, to cut through denseness, to demand fuller information, to analyse, to criticise on any resulting sound basis - they merely make their future job more difficult than it will be anyway.

Just as there will be bad and doubtful debts in any loan portfolio, it is unlikely that the basket of several hundred foreign companies registered in Malta will not contain a bad apple, or that some of the containers passing through the Freeport will not be stuffed with unwholesome material.

But, to give an international media, hungry for titbits to satisfy its appetite, the opportunity to paint Malta as a causal factor in an ugly story such as Parmalat is shortsighted.

The fact that Maltese accountants and lawyers set up international companies under Malta's legal regime, according to our quite strict standards, should not automatically be grist to the scandal mill.

There must be a constant and uncompromising watch on what goes on in Malta, on what is done by our own nationals as well as by foreigners who may set out to milk others for fraudulent profit. The media cannot investigate by wearing kid gloves. Nor should it do so with slippery fingers on the PC, or with loose tongues.

To publish and be damned, as Hugh Cudlipp of the Daily Mirror titled his punchy book and his editorial philosophy decades ago, is not the best type of journalism one should pursue.

Establish the facts. Ensure nothing that smells is covered up. Be a constant hawk. If there are indications that anyone in Malta wilfully aided or abetted fraud - by Parmalat, Maltalat, or whichever - go for the jugular.

Publish with facts in hand.

Use them as evidence to damn the perpetrators. Expose and crucify.

Malta's authorities should contribute to that process by setting out the facts as resulting to them. Without delay and much more clearly than has been done so far.

Silence is not golden in such matters. Let the facts speak.