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MT 19 March 2017

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14 IF I were Franco Debono right now, I admit I'd find it hard not to feel vindicated by recent events. Revelations that the PN has been secretly financed by the DB group for a number of years graphically call to mind the ill-fated disputes that characterised the final years of the Gonzi administration. Par- ty financing was one of Debono's most cherished private grievances against his own government. In 2012 he presented the party with a draft bill he had written on his own initiative... it was ignored, but taken up by the incoming Labour government the following March. Now it has been in force for a year, and already the Electoral Commission has been called in to investigate a suspected infringe- ment (by the same party that had earlier expelled Debono as a 'trou- blemaker'). Who can really blame him, then, for constantly reminding me, throughout this interview, about whose idea it was all along to regu- late this particular sector... and, more pointedly, who had rejected his efforts at the time, and why. "I pushed the party financing act for so long, precisely because I was aware of situations that might have existed," he begins when I ask him if the db Group revelations had already been known to him at the time. "Everyone has enough common sense to understand that political parties are getting money from somewhere. We also under- stand that they need a lot of money these days: to maintain themselves, to organise electoral campaigns... common sense alone dictates that this money was coming in..." Does this mean he was aware of the details that have just emerged? For instance, that the PN's secre- tary-general and the CEO of its media organisation draw their sal- aries directly from the db Group? "I haven't been a member of the PN for the past four years. But when I was a member, I was aware of certain facts that I never spoke about, and don't think I ever should speak about. I used to hear that 'this person donates' and 'that one doesn't'. I'm talking generally now. People give money to the par- ties, and businessmen are a subset of 'the people'. So they give too, and have more to give than most..." They also have more on an inter- est in donating to political parties: many businesses tender for gov- ernment contracts, and rely on government for all sorts of other things... "Yes, and that is what the party financing law is there to uncover. There is nothing wrong with mak- ing small donations to a party you believe in. But it has to be account- able. That is why I feel that I was right to be pro-active in matters of legislation. That is the role of a parliamentarian, in my opinion. From the backbench I presented a bill for party financing legislation. Looking back, with hindsight... was it a good bill I presented, or not?" But was it the same as the law that has just come into force? Debono's bill was the basis for the Party Financing Act, but it went through plenty of discussion since then. "There were very few changes. Mostly fine-tuning. If anything, the final law has fewer requirements and provisos than I had originally proposed. But my bill was so good that... there's a reason I keep say- ing this, by the way... that even the Nationalists voted in favour. It was passed unanimously. So this raises the question: if it was so good, then why – when I presented it in January 2012, and there was still a year left of the legislature – was it never brought up for discussion in Parliament? Well, what's just hap- pened [the party financing scan- dal] may shed light on the possible reasons. Don't forget that when I was drafting the bill, we had Joe Cassar accepting donations which would fall under the purview of the new law. This is another circum- stance which must be mentioned. Afterwards, it transpired that Cas- sar's donations were, let me say, 'irregular'..." But there wasn't even a party fi- nancing law at the time... "No, but there were other laws. But my point is that this bill was drafted in 2012. Why did it have to wait till 2015 to become law? Bear in mind that, as a backbencher, I was under no obligation to do all this work... I did it on my own ini- tiative. It was actually the obliga- tion of the minister, Carm [Mifsud Bonnici]. And Tonio [Borg] before him. And they had GRECO [the European Council's governance watchdog] breathing down their necks. Two years ago I had the honour of attending a GRECO meeting, together with Kevin Val- letta from the office of the AG, in Strasbourg to assess the new party financing law. It was a positive as- sessment..." And yet, for all Debono's praise for his own handiwork, the party financing law has been in force for a year now... and look what just happened. It transpires that the Labour Party hasn't even reg- istered as a party with the Party Financing Commission yet; while the PN has been carrying on with the business of accepting undis- closed donations as if nothing had happened at all. So far, the new law doesn't seem to have been very ef- fective... "I wouldn't say so myself. On the contrary, things haven't carried on as usual. Let me give you an anal- ogy: theft is a crime. We all agree it is a crime. Does this mean that people don't steal? Unfortunately no, because no law can absolutely prevent a crime. And not everyone who steals gets caught. Put those two together, and..." No offence, but I see flaw in the analogy. People who do get caught stealing face consequences, includ- ing jail-time. So far there have been no consequences in this case... "Give it time. What happened anyway? There seems to have been an infringement, and the Electoral Commission – which is the body entrusted to enforce this law – has said it will investigate. We have to wait for the investigation to be conducted. And there are sanc- tions involved: for instance, there's an administrative penalty of €10,000 for failing to submit party accounts…" OK, but to stick to his own anal- ogy: a thief would be investigated by the police, not by a specially ap- pointed extra-judicial body. And by extension, a company that falls foul of financial obligations will be investigated by the Economic Crimes Unit. Why do we seem to always make exceptions for politi- cal parties? "In my original bill, the sanctions were to be administered by the police. But in consultation stage, there were different opinions, and it was mitigated..." I was referring to the law as it stands today, not as he originally wrote it. But even outside that law: what we've also seen is that commercial companies owned by political parties are regulated dif- ferently from others. The Compa- nies Act, for instance, obliges all companies (regardless of owner- ship) to submit their accounts to the MFSA. As for donations, in any other company those would be considered a revenue stream and would have to be open to scrutiny. Why do these laws not apply to politically-owned companies? "If I'm understanding you, there are two questions there: one, whether the companies in which parties have a controlling inter- est are regulated by the new Party Financing Law; my answer to that is, yes they are. It's in section two. From the outset, when I sat down to write it, it was evident that apart from regulating the parties them- selves, it also had to regulate their TV stations, etc. Two, whether they are regulated by the Com- panies Act. Again, my answer is yes..." But his claim doesn't stand up to the reality that is now visible to everyone. Other companies can- not keep revenue hidden from the authorities. The political ones can... "Don't forget where we started from, though. I've been saying it for years: until recently, political parties were the most unregulated bodies at Maltese law. So with all due respect, let's remember how this all began. Where we had ad- vanced in various other areas – it must be said we have reached high standards in many things in this country – when it came to politi- cal parties we had remained in the same place for years and years. As of 2015, we started to regulate this sector, too. We have to be careful at this stage. We must be sensitive to the fact that these parties have been administered in a certain way for 100 years..." Sorry to interrupt, but that situ- ation is not exactly unique to po- litical parties. In the early 1990s, when VAT was introduced, pri- vate businesses found themselves facing the same dilemma: for 100 Interview By Raphael Vassallo maltatoday, SUNDAY, 19 MARCH 2017 We have to be careful at this stage. We must be sensitive to the fact that these parties have been administered in a certain way for 100 years... SENSITIVITY How can you turn to the taxpayer and expect him to finance a party that failed to introduce a party financing law in 25 years... and that is now seeing how it can circumvent the law through the Cedoli scheme, or even breaking it outright? STATE FINANCING A work in progress...

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