I do not believe in personalised attacks and this article is surely not intended to be or sound like one.
But I cannot hold back from commenting on the fact that although until recently the Finance Minister was considered to be the PN’s ‘great white hope’ things seem to have gone downhill all the way for him since a particularly embarrassing incident which was also quite avoidable.
I can still vividly recall various instances when those within the PN ranks – including more than an MP or two – had considered him to be their man for the future.
Others saw him as the perfect foil to block any future advancement by Minister Gatt. That is when Gatt was still not yet at the stage of mulling and prospecting publicly about his retirement from Parliament.
A few days ago the PL newspaper gave 101 reasons why the minister should go. PL Leader Joseph Muscat dedicated a sizeable part of a recent speech to the political ‘misdemeanors’ of the same minister.
The minister hit back by claiming that the PL was after his ‘character assassination.’ I will not go into that since the whole case is sub-judice. But even were one to forget for a moment how so many PL front men have been targeted and hounded by the PN-leaning media, one finds such comments rather rich.
The way the VAT fraud saga was handled left much to be desired.
I am not implying complicity by the Minister, but it says much about how the whole maxim of accountability is treated and dealt with in this country.
People were arraigned in court in 2009. In the autumn of the same year an independent board of inquiry was appointed by the minister. On 1 February 2010 they completed their report.
Although it was only five or six pages long the report was sharp, focused and objective.
For reasons that failed to cut much ice the minister chose to keep this report very much close to his chest in spite of having repeatedly promised to publish it much earlier on.
When the report finally saw the light of day serious flaws in the whole administrative make up of the VAT Department were revealed. We came to learn “Performance Plans and Reviews were sent regularly on a monthly basis to the Ministry of Finance and to the Office of the Prime Minister and have never been challenged on grounds of lack of accountability.”
The moment the report was published a number of independent commentators including a former PN MEP candidate argued that heads must roll at the VAT Department particularly since the audit report had just identified a grave risk of insider fraud.
The Director General of the GRTU clamoured that “action has to be taken and be seen to be taken very soon.” He argued that the country could not afford a demotivated taxpaying public, so any doubts in the system had to be sorted out.
He could not have been clearer than that when he said boldly – anyone suspected of being responsible for the failings should, therefore be identified and removed.
A leading economist shared these same sentiments and said that the top people at the VAT Department should all be changed. He argued that in any private organisation, when things go so drastically wrong, heads roll and you need to set an example. Even in this case, the economist in question did not mince words: “If you want to have a system of accountability, it means that when things go wrong, people have to make way for others to make a fresh start.”
On Monday 23 May we came to learn through another independent daily newspaper that not only had the VAT Commissioner’s contract been temporarily renewed, but that in spite of his department being the subject of a number of controversies, he has for at least two years received a performance bonus of almost €5,000. I am not questioning the quantum of the performance bonus but the mere fact that he was given such a reward at all.
Just as strange was the fact that according to the same report the Commissioner’s contract expired at the end of March, and although there was a call for applications for similar posts in January, his office did not feature among them.
We were merely told that the government would issue another call, including one for VAT Commissioner ‘in the coming weeks.’
On the same day that this report was carried in the media, a parliamentary question of mine on the VAT fraud case happened to be top of the parliamentary Question Time agenda.
As was my duty to do, I availed myself of the opportunity to field a number of directly-linked questions.
Mainly:
• That the fact that the VAT Director earned such a performance bonus went on to show that in spite of the administrative failings in the running of his department he was completely let off the hook.
• That in such cases, the least that people expect is for the people that matter to shoulder administrative as well as political responsibility.
• That rather than being a mere flash in the pan abuse, irrespective of the collusion that may have been involved in the fraud case, matters could have been exacerbated further by flaws in the system that might have existed for long periods of time – possibly years on end, with the net result being that millions of taxpayers’ money ended up forfeited.
• That such abuse might have even continued after people were arraigned in court, given the administrative flaws in the set-up, which in the board of inquiry’s own words had revealed that “the general impression of the board is (was) that there is a lack of accountability and risk awareness amongst management at various levels.”
• Reassurances were sought as to whether all the remedial measures that had to be taken were effectively taken, particularly since a government spokesperson had boasted that the VAT Director had been rewarded for implementing a number of measures to improve security and reduce the risk of fraud at the VAT Department.
• I also sought a categoric reply as to whether the board of inquiry’s strongest recommendation – that a risk management directorate should be set up – was implemented and if so by when.
• I also availed myself of the opportunity to ask the minister why government had held back from publishing a lengthy KPMG report that was attached to the board of inquiry report when submitted to the VAT Department.
Although I have nothing personal against the VAT Director who I hardly know at all, the point at issue was not whether he should have been rewarded for having implemented a number of corrective measures to improve security and reduce the risk of fraud within his department. But rather why he was not held responsible for allowing certain creaky structures and procedures to continue to prevail – or even worse – deteriorate further at the same time that the fraud actually took place.
As has become the custom in our country rather than falling in line with the recommendations or conclusions of the board of inquiry’s findings which spoke of a total lack of transparency and accountability, the VAT Commissioner is reported to have denied there was lack of accountability in the department, adding that since EU membership, responsibilities had increased considerably.
The argument that between 2005 and 2008 the department had managed to increase revenue collection over the previous year is weak and illogical indeed.
The same goes for the claim that such performance could never have been achieved without accountability and that therefore, according to the VAT Director – the general impression that there was lack of accountability was in his opinion far from being an objective conclusion. At day’s end we remained none the wiser.
Except that the Minister’s aura lost even more of its gloss and lustre.
When things go wrong in the administration of public funds there should be investigations both at the political and the administrative level and accountability for failures demanded on both fronts.
Senior civil servants are in a position of trust – they are entrusted with the responsibility of administering taxpayers’ money and as such should be held accountable for what goes wrong.
The same applies to the political class. In every respectable democracy the Minister responsible for such misuse of public funds through mismanagement, fraud, carelessness or outright incompetence of civil servants should at least consider his position. The fact that he did not says much about the poor state of affairs in this country, the government itself. And the Minister in question.
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Leo Brincat is the Shadow Minister for the Environment, Sustainable Development & Climate Change