Education Minister Evarist Bartolo this evening hit out over 'hypocrisy and double standards' over the Panama controversy and said the same level of concern had not been raised over the PN's loan scheme and the activities of the chairman of the MFSA, who, he said, is involved in a company in the Cayman Islands.
Speaking in Parliament, Mr Bartolo said many had praised him for his comments about Konrad Mizzi.
But, he recalled, in the past he had raised questions about how the chairman of the MFSA, Joe Bannister, had partners with links in the Cayman Islands. But no fuss was raised at the time.
It was a case of double standards and hypocrisy to accuse someone of opening a secret moneybox in Panama, while at the same time, the PN introduced a scheme of secret donations through its cedoli loans scheme.
The MFSA should investigate this, but he feared it would let it pass like it had allowed other abuse. There should have been a proper prospectus about what would happen to the funds which the people handed the PN. That was what one expected in terms of financial legislation, including the balance sheet of the entity collecting the funds.
Why had the PN opted for a system of money being handed person to person without the explanations, safeguards and cautions normally found in a detailed prospectus?
Would the PN recruit financial operators to explain the risks to takers? What if the PN could not redeem the loans, given that the party reportedly had a debt of €22m.
The PN scheme, he said, was similar to a Madoff Ponzi scheme.
Clearly, the PN scheme circumvented not just the party funding law but also financial legislation. Where was the MFSA in all this?
Having a secret moneybox in Panama was as bad as having a secret moneybox called cedoli.
In the past, in the UK an outcry had erupted over Labour’s ‘loans for honours scheme.’
Mr Bartolo said he had no confidence in Joe Bannister as chairman of the MFSA. Was it acceptable that he had funds in a Cayman Islands company? Wasn’t this a conflict of interest?
Mr Bannister had funds in SR Global Fund Inc with Sloane Robinson, who last year raised £9 million for the UK Conservative Party.
Did it make sense for the Maltese financial regulator to be involved in such activities abroad, more so when Robinson had had to refund £2m after being found to have evaded tax?
What hypocrisy was it to attack a person just because he was in the Labour Party – and when no funds appeared to have been deposited yet – when nothing was said about the Bannister case?
Mr Bartolo said the government needed to seriously and honestly address its problems. It should learn from this experience.
It should become illegal for anyone in Malta to set up companies for financial purposes in countries where there were no arrangements for the automatic exchange of information.
Mr Bartolo said he stood by what he said this morning and those involved should shoulder their responsibilities. He reiterated that he would vote with the government when the vote of no confidence was taken on Monday.
PN REACTION
In a reaction, the Nationalist Party said Mr Bartolo’s comments were based on 'complete conjecture' and 'a series of fabricated lies'.
"The Cedoli scheme is not a donation, which is precisely what the party financing laws regulate, because it is donations - gifts given without an apparent return - which need to be regulated. Voluntary loans which are the subject matter of an arms length transaction covered by a contract of loan between the lender and the party where commercial interest is paid at 4 % and which are repayable after 10 years, have nothing to do with gratuitous donations."
The PN said this was the way a modern party should raise financing through voluntary loans, "whereby there are multiple lenders towards whom the party is bound to pay interest, which is the totality of the obligation of the party towards that person, eliminating the expectation of “paybacks” when elected, as may be the case when a few “donors” are able to effectively control the Party’s access to finance in return for the paybacks we are seeing taking place at the moment."
It said it was obscene for Mr. Bartolo to throw doubt over the ability of the party to pay back the loan when it, as the borrower, has a fixed asset base worth millions.
"The Nationalist Party is proud to have been the first party with the courage and foresight to provide a clean, arms length method of party financing away from the ‘I scratch your back and you scratch mine’ mentality," the PN said.