Trust is, or should, be the bedrock of any fiduciary service. Regrettably, every so often, stories emerge that give rise to concern and even suspicion, especially in the case of politicians. The latest controversy involves Nationalist Party deputy leader Beppe Fenech Adami.
According to media reports, Baltimore Fiduciary Services had acted as a nominee shareholder for CapitalOne, about which the Dutch and Maltese police had opened an investigation into money laundering. Dr Fenech Adami was director of Baltimore Fiduciary Services.
It was also reported that the police investigation was never pursued, ostensibly when Dr Fenech Adami’s name surfaced. Dr Fenech Adami insists he knew nothing of the investigation.
As usually happens in politics, one side – the Labour Party - cried foul and the other – the Nationalist Party – tried its best to play down the reports. The controversy is likely to fizzle out, as has happened on so many occasions. But the case does raise at least two main issues that are likely to be of serious concern to law-abiding citizens.
First, can a professional just get away with it by claiming s/he was only a ‘representative’ when any dirty business is identified in such cases?
Two, should politicians continue to assume such roles if they are expected to be role models and champions of good governance, due diligence and political correctness?
A Malta Financial Services Authority spokesman said it was essential that fiduciaries were aware of and abided by the strict requirements relating to anti-money laundering laws to avoid any reputational risk. Fiduciaries, he continued, had to carry out the necessary due diligence on the underlying companies in which the fiduciary was acting as a shareholder. Also, companies are bound by law to carry out the necessary due diligence processes on clients. So it is clear that an operator offering fiduciary services shoulders a lot of responsibility and must know what his/her client is doing.
The burden becomes heavier when operators are also involved in politics because they represent something that is much bigger than themselves or their company/partnership.
In his introduction to the document Restoring Trust in Politics, Nationalist Party leader Simon Busuttil acknowledges that public trust in politics and politicians is steadily being eroded.
“I want the Nationalist Party to rise to the occasion and take on the challenge to restore public trust in politics. True, to do this we must learn from our past mistakes to avoid repeating them.
“But we can also look confidently ahead in the knowledge that we can do better, much better, than what we have today. We will do this by raising the bar,” he said.
Well, here is an opportunity to raise the bar. Dr Busuttil should lead by example and propose a policy whereby Nationalist MPs would not engage in any professional activity that could, directly or indirectly, expose them to accusations and situations of conflicts of interest or, worse, exposure to wrongdoing.
This would mean professionals involved in financial services not participating in fiduciary services and lawyers not handling drug trafficking cases in court.
Joseph Muscat, who had promised to clean up politics, can take the lead himself or, better still, both leaders can take joint action in this direction.
Such a move would, to again quote Dr Busuttil, “form the basis of a pact between citizens and their elected representatives, a pact based on trust, which places the government’s authority truly at the service of all Maltese citizens rather than the chosen few”.