The citizenship bubble of Malta

Malta golden passport 1

Many issues are involved in the citizenship debate.

The government clearly considers Maltese citizenship as just another commodity, which it can milk. Initially it even removed the transparency rule from the statute book, which rule ensured the publication of the names of all those who acquired Maltese citizenship.

Whereas local public opinion was completely ignored, the Labour government reacted to the international media coverage by announcing that it will reverse its ditching of transparency. Yet its reaction may be too late as the damage done to Malta’s reputation is not easily reversed.

The international media queried the unconventional methods used to generate the finance required by the Maltese state.

Within EU circles it is clear that issues concerning citizenship are a competence reserved to member states. Yet the  Schengen dimension of EU citizenship cannot be ignored.

The citizenship scheme is attractive because, through it, the prospective citizen attains freedom of movement within the EU.

It is a very serious concern which can only be adequately addressed if the due diligence process is foolproof.

The problem is that, to date, the Maltese Government has already signalled that it is not that much concerned by the impact of persons who are associated with a fraudulent past, a case in point being government advisor Shiv Nair who is listed permanently on the World’s Bank blacklist.

Another recent example is China Communications Construction Company Limited, also on the World Bank blacklist. This Chinese Company will carry out (gratis) the feasibility study for a Malta-Gozo bridge on the basis of the very friendly relations between the two republics, we were told. (I had the impression that countries had no friends, they just have interests!)

This follows the earlier selection of Lahmeyer International as an advisor to the Gonzi Government. Lahmeyer International too was on the World Bank’s  blacklist.

Past performance indicates that due diligence is not an area in which the Republic of Malta has excelled.

Is it a sale or is it an investment? In fact it is a bit of both. It is surely an unconventional way of raising finance. Its major characteristic is that it focuses on the short term benefits and ignores the long term impacts.  The selling price can give immediate results: it can finance the start-up of specific projects. Whether these will be successful is another matter altogether. The impacts of an investment scheme will take more time, its a long term exercise.

The method of payment selected for the purchase of citizenship is clearly based on the St Kitts and Nevis model in the Caribbean.  In St Kitts and Nevis, payment for citizenship is received by the Sugar Industry Diversification Foundation and, subsequently, invested. The investment made is not at the discretion of the applicant for citizenship but a decision by the country dishing out the citizenship.

Public opinion considers that citizenship should be acquired through establishing solid roots in the country. Establishing minimum residence criteria and committment to the economic development of Malta through investment and job creation are essential criteria to be linked to the award of economic citizenship.

Government has done well, even though late in the day, to declare that it will reverse its secrecy stance. The declaration by Deputy Prime Minister Louis Grech that the regulations being drafted to implement government’s proposal will ensure that the names of those granted citizenship under the new legislation are public is welcome. This new position adopted by the government links with and reinforces the public committments made on the need for more robust due diligence.

It is, however, clear  that regulations alone will not suffice to entrench transparency in the citizenship scheme.  Amendments will also be necessary to the main legislation, in particular to remove reporting restrictions imposed by Parliament on the regulator.

The citizenship debate was also characteristed by the radical position taken by the Nationalist Party that, once back in office, it would not only take steps to scrap the new citizenship scheme but that it would, moreover, withdraw citizenship granted under the provisions of the scheme.

The Attorney General has advised the government that the PN’s proposal would be unconstitutional and would infringe human rights. Such advice was confirmed by the Dean of the Faculty of Law and by constitutional expert Ian Refalo.

The PN has declared that it is in receipt of legal advice reinforcing its position on the withdrawal of citizenship granted.

Whilst the Prime Minister has published the advice received from the Attorney General, the Leader of the Opposition has failed to follow suit. The Leader of the Opposition needs to be consistent. He cannot chastise the government for being secretive whilst simultaneously withholding important information from the public. It is not just the government which needs to be transparent.

The availability of both government and opposition to meet and discuss possible modifications to the citizenship scheme is welcome. Hopefully the wider national interest will prevail.

published in The Times Saturday, 23 November 2013

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Politika ġdida ……………….. valuri ġodda

euros-loads-of-money

Il-politika ġdida ta’ Joseph Muscat qed toħroġ għad-dawl tax-xemx valuri ġodda.

L-aħħar valur ġdid jirrigwarda ċ-ċittadinanza Maltija. Iċ-ċittadinanza Maltija f’din il-politika ġdida m’għadhiex tissimbolizza l-identita’ nazzjonali. Dak għal Muscat hu valur pri-storiku [tal-Flintsones!] Il-valur issa jrid ikun f’kontanti. Mhux inqas minn €650,000.

L-armata m’għadhiex iktar tal-operetti, kif kien jgħid in-nannu. Issa saret tal-highjumps. Tlett promozzjonijiet fi żmien tlett ġimgħat mhux ċajta.

Joseph Muscat ma kienx jaf, qal, li Shiv Nair [konsulent Indjan b’ċittadinanza Inġliża] kien fuq il-blacklist tal-Bank Dinji! Għax ħadd ma qallu! Mur obsor. Hu minn meta dawn l-affarijiet jgħidulek bihom? Fittex u ssib.

La qegħdin fuq il-Bank Dinji tajjeb li nsemmu li fost il-valuri ġodda għandna ukoll dawk tal-Partit Nazzjonalista. Mario de Marco u George Pullicino qed jitkażaw b’ Shiv Nair. Donnhom insew li l-Gvern immexxi mill-Partit Nazzjonalista [li tiegħu huma t-tnejn kienu Ministri] kellu kumpanija li kienet tagħtih il-pariri li kienet fuq il-blacklist tal-Bank Dinji minħabba korruzzjoni. Din il-kumpanija [Lahmeyer International] kienet tagħti l-pariri lill-Awtoritá tar-Riżorsi  li għaliha kien responsabbli politikament George Pullicno.

Delimara għall-Kabinett

Sirna nafu illi l-Ministru tal-Ambjent (jiġifieri Lawrence Gonzi) iddeċieda illi l-appell li l-Kunsill Lokali ta’ Marsaxlokk ippreżenta dwar il-permess li jikkonċerna l-estensjoni tal-Power Station ta’ Delimara għandu jkun deċiż mill-Kabinett u mhux mill-Bord tal-Appell dwar l-Ippjanar.

Din m’hiex proċedura komuni u ftit li xejn ġiet użata fil-passat.

Sal-lum hi proċedura regolata mill-artiklu 15A tal-Att dwar l-Ippjanar ta’ l-Iżvilupp li ġie introdott  9 snin ilu permezz tal-Att XXI tal-2001 bl-emendi li kien introduċa George Pullicino, dakinhar Segretarju Parlamentari responsabli mill-Awtorita’ tal-Ippjanar (l-ambjent kien għandu ma żdiedx mar-responsabbiltajiet tagħha).

Din il-proċedura tagħti d-dritt lill-Gvern li jirreferi appell għal deċiżjoni mill-Kabinett wara li l-Bord tal-Appell dwar l-Ippjanar ikun ġabar il-provi w iffinaliza rakkomandazzjoni dwar il-kaz meta :

1)      l-applikant ikun Dipartiment tal-Gvern jew korp imwaqqaf b’liġi u

2)      l-applikazzjoni kollha sinifikat strateġiku, jkollha x’taqsam mas-sigurta’ nazzjonali, teffettwa l-interessi ta’ xi Gvernijiet oħra jew tirrikjedi studju tal-impatt ambjentali.

Din il-proċedura fiha innifisha ma fiha xejn ħażin u naħseb li teżisti f’diversi pajjiżi oħra ukoll. Id-diffikulta m’hiex għalhekk fid-dover tal-Kabinett li jieħu deċiżjoni imma l-fatt li f’Malta l-Gvern sa l-istadju tal-appell diġa huwa mdaħħal sa għonqu fid-deċiżjoni.

Kif ?  forsi jistaqsu uħud.

Il-membri kollha tal-Bord tal-MEPA li ddeċidew il-każ huma kollha appuntati mill-Gvern. L-ebda wieħed minnhom ma kien kritiku la ta’ din l-applikazzjoni u l-anqas ta’ kwalunkwe’ applikazzjoni oħra li ssottometta l-Gvern jew xi entita’ oħra tiegħu. B‘żieda ma dan, il-każ kien wieħed ikkargat b’deċiżjonijiet politiċi li dwarhom mhux dejjem kien hemm spjegazzjoni li tikkonvinċi. L-iktar importanti fosthom it-tibdil fir-regolamenti dwar x’tip ta’ emissjonijiet huma permissibli. Żid l-involviment tal-Lehmayer International bħala konsulenti tal-Enemalta minkejja li l-Bank Dinji poġġihom fuq il-Black List minħabba korruzzjoni ippruvata.

Fid-dawl ta’ dan kollu l-proċedura użata għalkemm skond il-liġi tista’ tkun inġusta.

Nawgura lill-Kunsill ta’ Marsaxlokk li appella mid-deċiżjoni tal-estensjoni tal-Power Station f’Delimara illi jsib soluzzjoni li biha jkun jista’ jsemma’ leħnu b’mod effettiv.

The Delimara Inquiry: unfinished business

by Carmel Cacopardo

published on May 1, 2010

____________________________________________________________________________

Many unanswered questions arise from the National Audit Office (NAO) report entitled Enemalta Corporation Tender for Generating Capacity. The conclusions are certainly damning and with no stretch of the imagination can they be considered as pointing at mere shortcomings.

Was there any corruption involved in the Delimara tender? The NAO report is clear: “The NAO’s inquiry did not come across any hard and conclusive evidence of corruption…” (page 8). In my opinion this means that the evidence of wrongdoing encountered and documented does not lead to a definite conclusion. Evidence is still there awaiting further investigations.

It would be worthwhile to recollect that in the few cases in Malta’s recent history where it was concluded that corruption had been proven this had resulted because someone directly involved had spilt the beans.

As reported in other sections of the press, the commissions in play in connection with the Delimara tender are substantially higher than what is normal in this business. When this is coupled with the lack of cooperation encountered by the NAO during its investigations as well as the selective leakages identified, it is reasonable to conclude that much more could yet be unearthed.

But then there is also a related case of proven corruption: Lahmeyer International (LI), Enemalta’s advisers, were found guilty of corruption relative to two World Bank contracts and, as a result, on November 6, 2006, they were added to the World Bank’s blacklist. The tainted contracts refer to the Lesotho Highlands Water Project in respect of which LI had responsibilities for detailed design work, construction supervision, project studies and technical assistance in connection with water delivery tunnels.

LI offered their services to Enemalta in April 2008, 17 months after being included on the World Bank blacklist. Initially, the unsolicited services of LI were refused by Enemalta but one month later someone had second thoughts and their services were accepted. Why?

When queried by the NAO, senior Enemalta officials declared that they were not aware that LI was blacklisted by the World Bank. The NAO report declares (page 115) that it “was not convinced of the explanations given”.

In the meantime, LI is still advising the Malta Resources Authority, which has not yet publicly reacted to the news that its adviser is currently on the World Bank blacklist for corruption. But maybe we will hear about that at some later stage when the energy interconnection between Malta and Sicily is scrutinised.

In my opinion, the fact that Enemalta did not check into LI’s ethical credentials indicates that Enemalta does not consider these to be of any relevance to its operations. This is not a shortcoming but a serious error of judgment.

Some may point fingers at “inexperienced officers” who dealt with the case. Enemalta board has a duty towards taxpayers to ensure that it engages only the best available staff. It was for this reason that, in the past, we were informed of the substantial emoluments being paid to some of the senior officers. We have been reminded that if you employ the best you cannot pay peanuts. Much more than peanuts has been paid but Enemalta has ended up with monkey business just the same!

There is then the issue of changing the rules mid-way through the process. Enemalta had initiated the tendering process in November 2006 through a Request for Proposals. During the adjudication, in January 2008, the government changed the rules relative to the permissible emissions. The NAO states that while this change is permissible in terms of the relative EU Directive (page 22) the tendering process should have been aborted and the tender reissued in view of the fact that the original specifications were based on different emission levels. Such a line of action, says the NAO, would have ensured a greater degree of transparency and equity (page 53).

There are many other issues the report unearths but the space allotted for this article is very limited.

The NAO-led inquiry was a tough job the Auditor General has done honourably. I have no doubt that he will take the criticism by Enemalta’s chairman and members of the Cabinet in his stride. It is, after all, an occupational hazard that goes with his job.

In view of the damning NAO report, in a democracy, the politician responsible for the Enemalta Delimara tender would stand up, accept political responsibility and resign. So far, he has not done so, which means that all Cabinet has now been forced to collectively shoulder the responsibility instead of their colleague. The only positive note is that he has been relieved of his Enemalta duties some weeks ago!

The NAO report is not the end of the story as many answers are still awaited. This is a business yet unfinished.

original article at : The Times

World Bank on Enemalta’s advisors

World Bank Sanctions Lahmeyer International for Corrupt Activities in Bank-Financed Projects

    

Press Release No:129/2007/INT

Contact:
Media Contacts: In South Africa – Mallory Saleson: 27-12-431-3100; In Washington – David Theis (202) 458-8626;Amy Stilwell (202) 458-4906
PRETORIA, South Africa, November 6, 2006 — The World Bank has declared Lahmeyer International GmbH (Lahmeyer), a German company, ineligible to be awarded Bank-financed contracts for a period of seven years, because of corrupt activities in connection with the Lesotho Highlands Water Project (LHWP). The period of ineligibility may be reduced by four years if the Bank determines that Lahmeyer has met specific compliance conditions and fully cooperated with the Bank in disclosing past sanctionable misconduct.The World Bank’s Sanctions Committee found that Lahmeyer engaged in corrupt activities by bribing the Lesotho Highlands Development Authority’s Chief Executive, Mr. Masupha Sole, the government official responsible for contract award and implementation under the LHWP, in violation of the Bank’s procurement guidelines. In July 2004, the World Bank debarred Acres International, another firm convicted of paying bribes under the LHWP, for a period of three years. Two other European firms were also convicted in Lesotho in relation to the LHWP, although they were not involved in the Bank-financed portions of the project.“The Government of Lesotho has shown courage and leadership in successfully prosecuting its own officials and several large foreign companies for corruption,” said World Bank President Paul Wolfowitz. “Institutions like the World Bank, and the governments of rich countries, should support the bold stance of poor countries like Lesotho which are working to make sure that precious public resources go to help the poor, for whom they are intended.”The case is a re-opening of 2001 debarment proceedings against Lahmeyer in relation to the LHWP. The Government of Lesotho announced criminal indictments of Lahmeyer and Mr. Sole in 1999. Following the announcement of the indictments, the World Bank’s Department of Institutional Integrity initiated an investigation into whether Lahmeyer had engaged in corrupt practices in relation to its contracts with the Bank. In October 2001, the Sanctions Committee found that the evidence was not sufficient to make a determination, and said that it would re-examine its findings in light of any additional relevant information. In 2002 and 2003, the High Court of Lesotho convicted Mr. Sole and Lahmeyer of bribery. The Court of Appeal of Lesothoaffirmed Mr. Sole’s conviction in April 2003, and Lahmeyer’s conviction on six of seven counts in April 2004. In light of the information obtained from these decisions, the World Bank re-opened debarment proceedings against Lahmeyer in August 2005.Once the indictments were announced in mid-1999, the World Bank provided extensive evidentiary support to the Lesotho prosecutors and made Bank staff available for interviews. The World Bank later assisted the Government by bringing together the Lesotho prosecutors with the various project funding agencies and EU anti-fraud officials. The Bank benefited greatly from the investigative work done by the Lesotho Government in bringing the debarment case against Lahmeyer and Acres. “We are very grateful to the Government of Lesotho for its leadership in the fight against corruption,” Wolfowitz said.The LHWP is a massive, multi-billion dollar water transfer and hydropower project implemented by governments of Lesotho and South Africa. The project is designed principally to transfer water from the Maluti Mountains in eastern and central Lesotho to the Gauteng Province of South Africa. In connection with the LHWP, Lahmeyer was found to have arranged bribery payments to Mr. Sole. Lahmeyer received two World Bank contracts pertaining to the water transfer component that related to detailed design work, construction supervision, project studies and technical assistance in connection with the Water Delivery Tunnel South and the Mohale Tunnel.In making its recommendation to World Bank President Paul Wolfowitz, the Committee took into account several factors, including Lahmeyer’s lack of cooperation with respect to the World Bank’s investigation, as well as Lahmeyer’s payment of a criminal fine in Lesotho and its cooperation with the Lesothoauthorities.

Accordingly, the Bank has decided to allow for a possible four-year reduction in the debarment period if Lahmeyer puts in place a satisfactory corporate compliance and ethics program and cooperates fully with the Bank in disclosing any past misconduct, including through a review of its Bank-financed contracts.

“This sanction reflects a serious response to corrupt practices,” said Graeme Wheeler, Managing Director of the World Bank Group and Chairman of the Bank’s Sanctions Committee. “At the same time, the sanction is structured to encourage Lahmeyer to demonstrate that its contracts and practices now meet the high standards that are essential to the Bank’s work.”

Background Information

The World Bank Department of Institutional Integrity (INT) is charged with investigating allegations of fraud and corruption in Bank-financed projects. The department reports directly to the President of the World Bank and is staffed by a multinational team including investigators, legal specialists, forensic accountants, and others. Additional information can be found at http://www.worldbank.org/integrity .

The sanctions process is an internal administrative process within the World Bank. It provides for due process of all parties involved in a dispute. Since the Sanctions Committee was established in November 1998, the World Bank sanctioned more than 330 firms and individuals. For more information on procurement and sanctions, see: http://www.worldbank.org/procure.

For more information on the World Bank’s anti-corruption policies and activities, see: http://www.worldbank.org/anticorruption.