Bank of Valletta said yesterday that “there has been no further development” in the relationship between the bank and former Parliamentary Secretary Michael Falzon, who was given a €260,000 “early retirement package” after being appointed a cabinet role in April 2014.
Dr Falzon was forced to resign after the publication of a damning NAO report on the Gaffarena expropriation deal. The latest development in the controversial case was a court case filed by Prime Minister Joseph Muscat yesterday to reverse the deal and recoup the €1.65 in cash and land given to Mr Gaffarena as compensation.
The Malta Independent on Sunday had revealed how Dr Falzon, who served for a number of years as head of BOV’s legal office, was given a “tailor-made” retirement package which afforded him the right to return to the bank during the current legislature if his political career was terminated. According to the agreement, however, Dr Falzon would have to refund the bank pro-rata on his retirement benefits should he chose to do so.
This paper contacted BOV yesterday, asking whether Dr Falzon had expressed the intention to return to the bank and whether the bank had accepted. This newspaper also asked what amount Dr Falzon would have to pay back if he chose this path and what would happen if he sought employment elsewhere.
The bank’s reply seems to imply that things remain unchanged, meaning that Dr Falzon would have to return a substantial part of the sum he received should he return to work at the bank. BOV Chairman John Cassar White had explained that according to the terms of his tailor-made agreement, Dr Falzon had until the “end of the legislature” to decide whether he wanted to return to BOV. After that deadline, he would not be able to return.
Sources pointed out yesterday that Michael Falzon might have a couple of options to choose from. One would be to return to the bank, lose a substantial part of the retirement package but start receiving a salary again. Another option would be to find alternate employment and enjoy his retirement money.
The bank, which is part-owned by the government, had said the agreement was “a hybrid solution to cater for the unique circumstances involved in the case.” The main aim, it said, was to free Dr Falzon, as a member of government, from any potential conflict of interest when taking executive decisions. No other bank employee who chose early retirement had been given the right to return.