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Malta Greylisting – Strange deals between MFSA and the Malta Business Registry

MFSA with Joe Cuschieri and Edwina Licari
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The greylisted EU offshore hub Malta is different in many respects. An old Maltese saying that loosely translated says that some people die of thirst while others are drowning in their excesses is still true. Usually, in Malta, it is those with the betters connections that get the better deal. Take the former MFSA executive George Spiteri for example. Today he is an executive of the Malta Business Registry (MBR), who for long years boasted of his close connections with disgraced, “2019 Corrupt Person of the Year,” former Maltese Prime Minister Joseph Muscat.

The new old job

George Spiteri left MFSA to join MBR

The story of Spiteri would make some third-world country officials jealous. In 1983 George Spiteri started his career at the Central Bank of Malta (CBM). In 2002, he moved to the Malta Financial Services Authority (MFSA). There he, according to insiders, without demonstrating any particular merits for the matter, moved up to the ranks of HR Director.

He served for years in this position at the regulator until a strange thing happened in summer 2019. Due to ‘differences’ with the authority’s organization, George Spiteri (pictured left) took up a very lucrative early retirement scheme receiving upwards of €150,000. Nothing strange so far, right? But then, just a few weeks later, he lands another job as HR director the Malta Business Registry (MBR).

Creating opportunities

The MBR used to be part of the MFSA until a few months before the Spiteri move. Allegedly, MBR was established as an independent agency to give it a stronger role. However, the truth is that the Labor Government created an opportunity to employ more of its supporters, so much so that employees of the agency have branded the newly-established MBR as a ‘Labour party club,’ where Economic Minister Silvio Schembri‘s constituents get jobs at pleasure.

According to the Times of Malta, George Spiteriwas paid to retire only to be re-employed in the same position by an offshoot of the financial services regulator, was personally involved in drafting the rules pertaining to his retirement.” And Spiteri himself designed this personal enrichment thing, which the then CEO Joseph Cuschieri approved:

On the instructions of MFSA CEO Joseph Cuschieri, Mr Spiteri was tasked to draft the rules of the lucrative scheme and which, unlike similar schemes, did not include any conditions for those benefitting from a golden handshake.

Times of Malta (source: link)

One of the latest recruitments of MBR is Jonathan Debono, who was also previously at the MFSA. He happens to be the husband of the daughter of another former Labour Minister, Charles Mangion, who by the way, also has a daughter employed at the MFSA, Gabriella. Charles Mangion happens to be the uncle of Silvio Schembri. Connections count, don’t they?

Back to Geroge Spiteri. His incredible move was dubbed as a “major scandal” by a senior MFSA official speaking to the Times of Malta: “While MFSA employees working at the Registry of Companies were just transferred onto the books of the new agency and kept doing their job, Mr Spiteri has practically more than halved his responsibilities, got a lucrative sum, resigned from the MFSA and ended up exactly in the same position he was, now at the new agency.

As this story came to light, lawyer and former Labour minister Joseph Brincat – who served for years on the MFSA‘s board – called on the regulator through a judicial letter to desist from paying out money which was not his to hand out as he pleased. It is not known what happened following this judicial letter.

The regulatory racket

Joseph Cuschieri became known to the world public because he, as then MFSA CEO, together with Edwina Licari (pictured right), General Counsel of MFSA, had undertaken a US trip at the expense of Yorgen Fenech. EU authorities suspect Fenech of being one of the masterminds behind the deadly assassination of Maltese blogger Daphne Caruana Galizia. Before being promoted CEO of MFSA, Cuschieri was CEO of the Malta Gambling Authority (MGA) and thus also the regulator responsible for Fenech’s casinos. Licari also served with Cuschieri at the MGA.

It’s good to have friends. Isn’t it? However, it also gives the impression that the leadership crew of Maltese regulators is something of a racket. After the US trip became known, Cuschieri resigned as CEO of the MFSA or something. Certainly not to his financial detriment. Licari is still the General Counsel of the MFSA.

The entanglement of Maltese regulators with each other and with politics is indeed incredible. Do you expect these guys to fight against money-laundering and compliance violations? Rather not!

The well-deserved greylisting

According to the authority’s annual report, The MFSA needed a €24.7 million government grant to stay in the black; the MFSA reported positive financial statements for a long time. Things are definitely not turning for the better in Malta. The EU offshore paradise and its regulators worked indeed hard to earn the greylisting. And perfectly deserved it.

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