The Voice of the Mediterranean scandal

Although I have been in Parliament since 1982, I can hardly ever recall a report by the Auditor General that was more damning than the enquiry and report on the operations of the Voice of the Mediterranean radio station.

Not only did internal control systems prove to be lacking or ineffective, but various instances of breaches of government financial regulations were listed and highlighted throughout the report.

Planning requirements, negotiation terms, procurement, delivery, acceptance, inventorising, payments, accounting, auditing, recruiting and disposal of assets were carried out in such a shoddy manner that one begs to question whether this was the result of sheer incompetence or outright fraud.

What emerges very clearly from the report is that while the managing director should primarily be held responsible, the Minister of Foreign Affairs, as represented by his Permanent Secretary, should carry the full political responsibility for these glaring shortcomings.

It is the National Audit Office's responsibility to identify which financial regulations were breached, by whom and what was the value of assets foregone.

Was it not ironic that, in the case where the deputy managing director of the station appropriated the VOM car and used it for a long time without authority, it was only recouped after NAO intervention? This was nothing more than an apparent misappropriation of government assets.

If my memory serves me well, when a junior civil servant at the Department of Museums had appropriated for himself circa Lm1,000, criminal action had been taken against him. Not only was he asked to return the money involved but he was also taken to court.

Since, apart from commenting on the dominating influence of the managing director, the report also speaks of the lack of professionalism on the part of the accountant, it will be interesting to see whether Government will refer the people concerned to the Accountancy Board for alleged serious breach of professional ethics.

I sincerely hope that this will not be a pure and simple case of monies recouped with everything being absolved and forgotten.

Civil servants who breach financial regulations at the expense of taxpayers should have faced disciplinary action before the Public Service Commission rather than being promoted to ambassadors. No wonder the diplomatic corps in some instances badly lacks credibility.

While I do not want to imply in any way that the present foreign minister was involved in this mess, I fail to see why he bothered to ask for a statement from the two ambassadors since his predecessor, Dr Joe Borg, had actually asked the Permanent Secretary in question (Ambassador Gaetan Naudi) to investigate the whole VOM saga alongside the Director of Corporate Services, who happened to be a former private secretary of the minister.

From perusal of the report, which these two gentlemen had prepared in 2003 - which was subsequently tabled in Parliament by the Minister of Foreign Affairs on December 16, 2003, one gets the impression that it was nothing but an unsubtle cover-up.

While the auditor general's report makes it clear that the board of directors was left very much in the dark by the managing director, in the Naudi-Mifsud report it is claimed that, according to Richard Muscat, he had consulted the board members continuously, particularly those on the Maltese side, on matters relating to the station's operations.

Regarding expenditure incurred, Mr Muscat had even stated: "Il-Bord tal-Kunsilliera kien jinzamm infurmat il-hin kollu" (The Board of Councillors was kept regularly and constantly informed).

The Auditor General's findings prove otherwise! While the auditor general also complained on the manner in which recruitment of personnel was carried out directly by Mr Muscat, the Naudi-Mifsud report claimed that, according to the MD, he always followed established practices by making public calls for application, which were followed by a selection process at the end of a series of interviews.

No matter how apologetic the Naudi-Mifsud report tried to be, they were compelled to admit that when the radio station changed premises considerable expenditure was incurred, with a number of orders being placed without a call for tenders or quotations by resorting to direct orders.

The apologetic tone of the AG's office is equally deplorable under the pretext that neither of the two partners in the station had control over the venture, thus leaving the MD free to apply financial regulations.

While the Naudi-Mifsud report relied on Mr Muscat's reassurance that all items had been inventorised, the Auditor General's report proves otherwise.

What I found particularly insulting was their conclusion that Mr Muscat had resorted to certain actions because he had the progress of the station so very much at heart that he wanted to treat its modernisation process with great speed and urgency as a result of his strong commitment to the success (sic) of the station.

From the Auditor General's report, one can tell very clearly that his office was in no way impressed by the Naudi-Mifsud report. Had this not been the case, it would not have made the damning statement that the Ministry of Foreign Affairs was in duty bound, but failed, to ensure that VOM complied with standing financial regulations and any other policies that may have regulated the VOM in the procurement of various services.

The claim by the radio station's MD that he was not bound by Government procurement and financial regulations failed to ensure a transparent and cost-effective management of the radio station.

The NAO's opinion is further consolidated by the fact that one of the councillors from the Maltese side stated when interviewed that he drew the VOM MD's attention that the procurement procedures applicable to all government entities should invariably be followed.

Is it true that before the station closed down there had been Maltese councillors on the VOM board who had resigned? And, if so, why?

Although it is true that legal advice was obtained from the Attorney General by the Foreign Ministry, this was only sought in December 2003 - the same month when the report was published - just a few days before the closure of VOM.

Management had operated - according to the auditor general - for three years without comfort that their actions did not constitute a breach of government regulations. In the event of doubt the Foreign Ministry should have sought legal advice at an earlier stage.

The Foreign Ministry was in duty bound to ensure compliance with the Ministry of Finance and Treasury standing regulations and any policies that may have regulated such an entity.

Mr Muscat, who was a Parliamentary Secretary for some time, should have taken heed of the following Auditor General's remark:

"Obtaining quotations and issuing a public call for tenders should be part of any enterprise's procurement procedure and good governance, in order to ensure a transparent and cost-effective management of resources."

In my humble opinion while Mr Muscat should be held personally responsible for all these shortcomings, Mr Naudi should not only be held responsible for lack of oversight of the VOM's irregular operations, but even more so for the apparently 'whitewashing' report that he drew up when carrying out a so-called internal investigation into the matter together with the then Foreign Minister's former private secretary.

Under these circumstances, I stand by my recommendation that both officials who are currently serving as ambassadors should either resign of their own free will or else be made to resign. If anything, for the well being and credibility of the Foreign Ministry's diplomatic staff's image.

leo.brincat@gov.mt

Leo Brincat is the Shadow Minister for Foreign Affairs and IT.