Labour leader puts the heat on Finance Minister

Labour leader Joseph Muscat yesterday dedicated the lion’s share of a radio interview to mount a sustained attack on Finance Minister Tonio Fenech, whose former private secretary pleaded guilty to bribery last week.

“What will it take for him to resign,” Dr Muscat asked as he listed the “scandals” implicating Mr Fenech over the past few years, echoing yesterday’s front page of Labour’s weekly KullĦadd.

The Opposition Leader was commenting on the news that Noel Borg Hedley, a former private secretary to Mr Fenech, admitted last week that, in 2008, he had accepted a bribe to reduce or wave fees on under-declared property deals for contractors JPM Brothers Ltd, the same company Mr Fenech hired to renovate his house.

Mr Fenech had not quelled the allegations that first surfaced in connection with JPM Brothers, Dr Muscat insisted, pointing out that the minister never sued for libel Charles Magro, the owner of a company subcontracted to do the renovations on Mr Fenech’s house, who claimed the works were a “favour” to the minister by JPM Brothers.

Mr Fenech had filed a libel suit against One News head Glenn Beddingfield, for carrying Mr Magro’s allegations, but not against Mr Magro.

Dr Muscat also exhumed the controversy that erupted when it was learnt that Mr Fenech had accepted free tickets to watch an Arsenal game in Spain from businessman Joe Gasan and had also taken a free flight aboard the private jet of George Fenech, of the Tumas Group, to watch the match.

He referred to the VAT Department audit report just tabled in Parliament, which revealed a “grave risk” of fraud.

“In any other country in the west, we would have seen resignations before the ink would have dried on that report,” Dr Muscat said, adding that, in Malta’s case, not only were there no immediate resignation but the report was only published 11 months after it was submitted to the government.

Dr Muscat said the report was an indictment of the incompetence in the management of the department, the government’s second biggest revenue stream. He insisted that the claim by the VAT Department’s director general, Joe Sammut, that he had kept Mr Fenech and the Prime Minister (who at the time was Finance Minister) informed about all decisions taken meant they too shouldered the responsibility for the fiasco.

Among other things, the audit board found that staff members at the department said there was hardly any supervision of their work.

“All this shows lack of accountability in certain areas of management as well as lack of risk awareness, especially with regard to insider fraud,” the board said.

“If such an important department for the government’s revenue is in such a state, I worry even more about the state of the rest,” Dr Muscat said.

In reply to Dr Muscat’s comments, the Finance Ministry said the government had acted decisively before corruption allegations at the VAT Department when it referred such claims to the police, eventually leading to convictions in 2009.

The ministry pointed out that the department had implemented a number of corrective measures in the wake of the audit report, insisting this was clear proof the government was committed to fight abuse.

Regarding the allegations by Mr Magro, the ministry referred to the pending libel case against One News and insisted the allegations were unfounded and had not been proved.

The ministry accused Dr Muscat and the PL’s TV station of mounting a campaign on unfounded allegations.