Former MFSA chief executive Joseph Cuschieri has testified before the Daphne Caruana Galizia public inquiry.
Cuschieri resigned on Wednesday, on the same day that an independent board handed in its report on a 2018 trip to Las Vegas with businessman Yorgen Fenech. He said in his resignation letter that his decision to step down was not an admission of guilt.
The MFSA said its board had ratified his resignation but felt that the self-suspension of its general counsel, Edwina Licari, who also attended the trip, was not warranted.
Cuschieri is being assisted by lawyer Charlon Gouder.
13:02 “Despite being aware of the damage to the country” he continued to relate with people who could have been involved in the murder, Said Pullicino suggests. But the witness had already said he had no idea, he says. Witness steps off the stand. The next sitting is on Monday at 1pm.
12:58 He is objecting to the board’s questions. “Why should he answer for other people? This is just for the media.”
12:57 Lawyer Pawlu Lia has just entered.
12:57 Did you know Keith Schembri? "Yes, yes," he replies - they met "regularly for work purposes".
"How could you remain friends with someone involved in such matters?" he is asked.
12:57 To withdraw a bank’s licence you need the authority of the ECB, this led to a lot of work with lawyers which took months, he said. “You can’t just withdraw it unilaterally.”
12:53 Cuschieri says he had no intereference from the government. "No. I felt fully empowered to do what needed to be done. It could be that my methods, coming from the private sector didn't go down well with the civil servants but then I adapted." He says that a lot of work had been done under his tenure. "I also spent a lot of time with the ECB, ESMA, IOSCO, and other European regulators which we were peer reviewers of. We changed our reputation from a sleepy, inactive regulator to one making progress."
12:49 It is a known fact that you resigned two days ago. Was this from your own free will? "Yes."
Speaking about your relationship with Yorgen Fenech, you said that you had been friends... had you been to Fenech's home. Were there PEPs there? "No".
12:47 Jason Azzopardi now asking questions. Before April 2016, was there ever a period where Malta was in the eye of the storm of so much criticism, such as Moneyval, Greco etc as at that period? "MFSA conducts peer reviews, then you have commissioned country reports... You have European institutions evaluating the performance of regulators. Yes, there were negative reports in the past... In 2018 when I joined we had the IMF and Moneyval as major problems."
12:43 Cuschieri says Edwina Licari, the MFSA counsel-general who accompanied them on the Las Vegas trip when she was then MGA head of legal, had resigned from the MGA in 2018 and taken a break of a few months. He says the MFSA issued its head of legal vacancy in the summer and that he encouraged her to apply. "There wasn't much public interest in the position," he said.
12:43 Cuschieri says Edwina Licari, the MFSA counsel-general who accompanied them on the Las Vegas trip when she was then MGA head of legal, had resigned from the MGA in 2018 and taken a break of a few months. He says the MFSA issued its head of legal vacancy in the summer and that he encouraged her to apply. "There wasn't much public interest in the position," he said.
12:39 Cuschieri says that at the time of his Las Vegas trip, Yorgen Fenech was not a subject person of any MFSA investigations. "At the time I felt there was no conflict, but having seen the report I reached the conclusion... At the time I didn't feel there was anything untoward," he says of his trip to Las Vegas while MFSA CEO and flying with licence holder Yorgen Fenech. "At the time I wasn't aware of 17 Black, and even so, it doesn't fall under the remit of MFSA."
12:37 As the MFSA statement and your resignation were so close to each other do you swear that you had no idea of the statement? "I swear," Cuschieri says.
12:33 Comodini Cachia points out that Cuschieri resigned the night before the conclusions of the inquiry were announced. Gouder interrupts, saying that there was no formal conclusion and that she was misleading the witness.
12:33 On the Las Vegas incident, Cuschieri says the case had created a lot of stress for him, his friends and family. "I self-suspended almost a month ago. Suddenly you end up with nothing to do and I reflected a lot. This attention was being reflected on the MFSA itself, so I felt it was a good idea to go back to the private sector. I resigned irrespectively of the outcome of the inquiry. I wasn't given any information about the inquiry."
12:32 Cuschieri says that before his time there were few MFSA inspections, and that practitioners now complain that the regulator had gone too far with onerous surveillance. He says that at the time of his appointment, the MFSA had just shut down Pilatus Bank.
12:25 Cuschieri says that after the Pilatus and Satabank debacles, and the two bad assessments from Moneyval, in 2019 he started implementing their recommendations by increasing market surveillance and compliance with a team of UK experts which he said ‘cost the MFSA a lot of money'.
12:22 Cuschieri tells the board the MFSA's comptence is not anti-money laundering, which is the FIAU's remit. MFSA deals with the conduct of financial services and compliance.
12:21 Questions return to the Las Vegas trip of 2018 with Yorgen Fenech. Cuschieri says he did not retain any role as consultant for Fenech after the trip. He does not know why Charlene Bianco, a secretary at the OPM, accompanied Fenech to the trip.
12:19 Cuschieri says he got to know Joseph Muscat when he was an MEP working on the roaming fees directive, after he contacted him when he worked as an executive for a cell phone operator. They became friends. He also met Keith Schembri in 2008 when he was in the Labour Party.
12:14 In April 2018, weeks after leaving the MGA, Fenech had approached him about expanding his land based casinos and asked Cuschieri to attend a las vegas conference on gaming with him, as the former regulator.
12:13 When he joined MGA in 2013, he started meeting the players and major stakeholders, amomg them the Tumas Group, which ran two casinos and had online gambling licences. He said that after the introductory meeting, he started frequenting Yorgen Fenech professionally and this developed into a friendship.
12:12 Cuschieri was formerly MGA CEO, as well as a board member of Projects Malta, the government PPP arm.