Prime Minister Joseph Muscat has given his reassurance to his former boss and ex-Super One chairman Alfred Mifsud that he will become the next governor of the Central Bank of Malta, irrespective of allegations that he had taken bribes and laundered money when he was chairman of Mid-Med Bank in 1996, The Malta Independent on Sunday can reveal.

But Finance Minister Edward Scicluna is treading cautiously and has said in private conversations in financial circles that Mr Mifsud will need to go through a due diligence process to be conducted by the European Central Bank (ECB), the super-structure to which Malta’s Central Bank governor ultimately reports.

Prof. Scicluna, however, is not the only Cabinet member to have views on Mr Mifsud’s imminent appointment that contrast with those of the Prime Minister. 

Government sources have told this newsroom that both Deputy Prime Minister Louis Grech and veteran Minister Evarist Bartolo have supported the concerns raised by Prof. Scicluna over the prospect of Mr Mifsud being appointed as the Central Bank of Malta’s next governor in view of the allegations that have been levelled against him.

They are instead pushing for another candidate for the post in the hope that the Prime Minister will not risk further damage to Malta’s reputation if the ECB’s due diligence process on Mr Mifsud produces a negative result.

Their preferred candidate is Rene Saliba, currently chairman of the Malta Fiscal Advisory Council, which falls directly under the Finance Ministry. Although considered to be politically on the left, he is very respected by all quarters for his professionalism. Mr Saliba previously occupied the post of Deputy General Manager of the Financial Markets Division at the Central Bank, a post that was abolished after his departure.

Prof. Scicluna’s argument is that, following the Panama Papers scandal and the attacks on Malta Financial Services Authority chairman Joe Banister, the country needs a Central Bank governor with no baggage and has credibility amongst European and international financial institutions.

One Maltese financial services operator who spoke to this newsroom said that he had approached Prof. Scicluna to complain that “Malta’s financial services sector is turning into a joke with all these scandals surrounding this administration. We’ve had enough of being mocked by our counterparts in the EU.”

Mr Mifsud has, meanwhile, denied all the allegations levelled at him by journalist Daphne Caruana Galizia, who reproduced on her website what Mr Mifsud’s former partner, Anna Zelbst, had revealed to her.

Ms Zelbst, who lived with the Central Bank deputy governor for 24 years, says the M. Demajo Group paid him hundreds of thousands of euros in cash to allegedly push for the purchasing of a new banking IT system for Mid-Med Bank from a US supplier, Eastpoint, whose representative in Malta was the M. Demajo Group. Mr Mifsud has also taken legal action against Mrs Caruana Galizia over the allegations.

It was The Malta Independent that had first revealed that Mr Mifsud would be made Central Bank Governor by the end of this month. He met Prime Minister Joseph Muscat regarding his appointment on 10 June, oblivious to what would be alleged by Mrs Caruana Galizia later in the same week.

  

Sources close to the Office of the Prime Minister have told this newsroom that Mr Mifsud had sought Joseph Muscat’s support following the allegations, and that the Prime Minister has assured him that everything will proceed as planned.

But in his diplomatic political manner, Finance Minister Edward Scicluna demonstrated his disagreement with the Prime Minister on the issue by going to Parliament this week and committing the government to hold grilling sessions such those held by the European Parliament before appointments, for instance, to the European Court of Auditors.

Speaking in Parliament on Tuesday, the minister was replying to concern expressed by Opposition MP Kristy Debono about the advisability of appointing Mr Mifsud to the Central Bank’s governorship in view of allegations being levelled against him.

Ms Debono had just asked Prof. Scicluna whether he was comfortable having Mr Mifsud assume the Central Bank’s governorship – and with it a seat at the European Central Bank’s governing council – given the allegations.

In reply, Prof. Scicluna alluded to an investigation and said that a due diligence process would take the claims into account.