Lest We Forget

28^th September 2007

The Malta Independent - Friday Wisdom

29 years ago exactly today, the world woke up to be faced with the incredulous news that the papacy of Albino Luciani (John Paul I) was suddenly ended by his sudden death after merely 33 days in office.

Till this very day the debate as to whether Pope John Paul I died naturally or was murdered by any one or a combinations of the factions that felt threatened with the fresh back to basics approach of his papacy, is a mystery that deserves to be unravelled.

Suspicions that something sinister could be involved in the untimely and unexpected death of the smiling Pope were fanned by the obstinate refusal of the Roman Curia to subject the body of His Holiness to an autopsy on very flimsy pretext that it is not normal to subject death popes to autopsy procedures. Abnormal events require abnormal responses and it is certainly not normal for popes to die suddenly in the middle of the night without any advance warning of any ill-health.

Subsequent events confirmed however that in September 1978 as Albino Luciano was getting to grips with the intricacies of the papacy inherited from Paul VI, who due to his character or ill-health had left many problems waiting resolution in the pending tray, there were many people who had valid motives to stop the workings of the new broom and this could only be done by a sudden death which in the absence of a scientific autopsy could make a subtle murder look like a natural death.

In 1978 Banca Ambrosiano was still considered a trustworthy and Roberto Calvi was still considered as God’s banker with special relationship with the Vatican Bank. No one then had yet suspected that Banca Ambrosiano was a rotten bank behind a glossy façade laundering mafia money with the assistance of Archbishop Marcinkus who called the shots apparently unsupervised or unchallenged in the Vatican Bank.

In 1978 no one had yet heard of the organisation P2 and its Masonic networks that had infiltrated the highest echelons of the Roman Curia and all centre of powers within the Italian Republic. In 1978, the P2-inspired strage di Bologna of 2 August 1980 was still an unimaginable event two years into the future aimed to destabilise the democratic workings of fractious democracy.

In 1978 we had not yet understood that the killing of the left leaning Christian Democratic personality Aldo Moro in the hands of a left leaning outlawed organisation known as Brigate Rosse was possibly the result of hired gun arrangements between the extreme right and the extreme left of the political spectrum.

In 1978, the world had not yet absorbed that the newly elected smiling Pope, who detested the Curial bureaucracy and was elected against his express wish, had very different views about birth control from those presented by Paul VI in Humanae Vitae.

It had not yet leaked out of the Vatican corridors of powers that the Roman Curia was not at all pleased that Holy Spirit had chosen as a new Pope a personality who had no experience either in Vatican Diplomacy or in the workings of the Roman Curia and felt threatened that his reform ideas would challenge the power of many Curia bureaucrats who expected the Pope to be the mouthpiece for their beliefs and wishes.

Time is a great healer. 29 years is a long time and many of those suspected with possible foul play in interfering with the works of the Holy Spirit by sending a new Pope early to his grave, have since followed him in that direction.

But as a Catholic, I find it unacceptable that till this very day no proper and impartial investigation has been conducted by the Church to quash speculation of foul play in the untimely death of Albino Luciani.

In his bestseller book In God’s Name, David Yallop does not prove that John Paul I’s death was a murder. But he certainly makes a strong case based on proven facts that there are very valid suspicions pointing in this direction and it is not too late, nor too early, for the Church to adopt a fully cooperative posture to help science to prove or disprove these suspicions to the extent it is still possible to do so in spite of the post death embalmment and the passage of time since death.

After 29 years it is time for Catholics to know the truth about what sent their newly chosen smiling Pastor to an early grave and why the Roman Curia made very evident attempts to block an instant autopsy in spite of public acclaim in this regard. How can we accept that society performs an autopsy of its least denominator who suffers an unexplained sudden death and fails to perform an autopsy on a Pontiff who meets a sudden death that defies all known medical records of his state of health at the time of his death?

The Church has opened the process to beatify and eventually sanctify Luciani. This may well be what the smiling Pope really deserves. But there could be no argument that the very least he deserves is due process to establish the truth about his death. All Catholics deserve this. Only such bold cooperative change of attitude by the Roman Curia could reverse the seemingly accelerating process of Catholics removing their church as a medium of their relationship with God.

Odd Timing

 21^st September 2007
The Malta Independent - Friday Wisdom

I am one of a very small number of columnists who have been regularly trying to raise public conscience on the very undesirable state of affairs that exist with regard to financing of local politics.

My latest on this subject was in this column on 6 October 2006 titled ‘Offending democracy in name of democracy’ and my earliest was in October 1990 in a speech at a Labour Party conference to commemorate its 70th anniversary. This speech was eventually published in the January-March 1991 issue of the now defunct magazine Society which at the time was edited by the current Opposition Leader.

You might think that I ought to applaud the sudden enthusiasm which seems to have rubbed on to our Prime Minister to push ahead with tangible progress on this matter even though discussions between the main parties have been frozen for years in the Galdes Report, with disagreement about the level of a quantitative threshold to apply before donations enter the realms of compulsory reporting in the interest of transparency.

My approval for putting this crucially important subject on the national agenda is however severely tempered by the timing of such initiative. On the eve of an election, when the present administration has been in office for over 20 years, nearly uninterrupted, the party in government has had ample time to collect “voluntary contributions” of questionable magnitude not only to finance the coming general elections and its successors, but also to build a super modern new headquarters.

On the contrary, Labour Party, mostly out of office for the same period, is now more than ever being perceived as a government in waiting. This is the only time when Labour has an outside chance of raising some “voluntary financing” which can enable it to run an election campaign that gives it a fighting chance to match the PN in the election communication strategy and outreach.

I cannot help feeling that the timing of the PN initiative is not motivated by a genuine desire to eliminate barriers to the true workings of the democratic system but is rather meant to blow the whistle and freeze the game at a time that will give it an unfair advantage over Labour with regards to the resources available for financing the upcoming general election.

Political party financing is a serious issue and cannot be allowed to become a tactical instrument to give a temporary advantage here and inflict a temporary disadvantage there. It needs goodwill from both sides which is unlikely to emerge at a time when we are rapidly slipping into general election campaign mode.

It is something all parties have to take head on with continuity after the next election and work out, without the pressures of an election campaign, a system that renders the political parties a transparent instrument for the execution of the democratic will of the electorate ruled by the principle that the rich and the poor, the learned and the uneducated, the blue-bloods and the mud-bloods, all have one vote each.

The political parties should stop disagreeing about the threshold beyond which there has to be total disclosure of donations. Lino Spiteri suggested that there should be no such threshold and that all contributions should be reported and put under public scrutiny to ensure that all such financing are without strings attached.

I disagree. Political contributions should not be legitimised by having them reported. There are all sorts of fronting tricks to ensure that transactions as reported do not reflect the reality of who is actually providing the financing. Contributions should be abolished, outright.

Parties should finance their operations by membership fees and commercial operations of their subsidiaries (which should be restricted to media companies to ensure that political parties do not extend their political power to other commercial areas like financial services, travel services etc.).

Commercial companies cannot by their own nature make genuine contributions with no string attached. Individuals are taxed enough by the State and should be relieved of the pressure to make regular contributions to their favoured party except through fully official and uniform membership fees.

So where would political parties get their financing from? Political parties are crucial instruments for the execution of the democratic expression of the electorate and it is sensible that they finance their operations in a controlled manner through state funding.

Whoever works for the state should be funded by the state. Any other system would unavoidably lead to confused loyalties, where those who are meant to work for the State will have to juggle through a maze of interest conflicts in trying to safeguard the interest of those who funded politicians’ way to power.

We use taxpayers’ money to finance many other services that are not commercially viable, including health, education, law and order, sports and culture. Why not include political funding in the same measure? Or are we to allow politics become a business venture in travesty of the democratic principles that should inspire it?

Mission Rediscovered

14^th September 2007
The Malta Independent - Friday Wisdom

Why did it have to take eight years for Maltapost to be put back on course for the mission it was born for?

It went off course looking for a suitor as far down in New Zealand until suddenly it found that its true and hopefully finally suitor lived exactly on the other side of the road at 67 Republic Street (Lombard Bank) from where it was born to Mid Med Bank at 233 Republic Street in 1998.

Typical of the local mentality, our politicians treat us as if we are all chicken heads with a tiny memory incapable of stretching back eight years. The sale of a controlling interest to Lombard Bank was presented as some great innovation without any mention that when Maltapost was created in 1998 from the ashes of the demised Posta Ltd., it was an initiative of Mid-Med Bank who, jointly with Maltacom, had persuaded the then Labour government that the future of Malta’s postal service could only be assured if the responsible organisation was diversified away from its core postal services to becoming a retail channel for low cost financial and telecom services.

These plans were obviously aborted when Mid-Med Bank was sold to foreign ownership and for some inexplicable reason Maltapost was thrown off course from the business objective for which it was created. It wandered throughout the world in search for a partner that could help it find its soul. How anybody thought that a Kiwi partner could help Maltapost get back on track is a mystery that still no one can explain.

Yet the Kiwis in spite of their failing to deliver, so much so that they were ousted from their management agreement after only two years, were permitted to reap substantial profits from sale of their 35% stake in Maltapost to Lombard Bank even though their original contribution to the share capital was originally sourced from technical services they had charged to Maltapost itself.

All government had to do when it recovered the investment in Maltapost from Mid-Med Bank, to avoid our postal services being passed along with the Bank under foreign ownership, was to organise a competitive bid for acquisition of such shares from financial services providers who were interested in continuing Maltapost original mission.

Surely, Lombard Bank would have immediately shown interest in acquiring a stake much earlier than they eventually did and this without leaving a substantial profit in the hand of the New Zealand sandwich shareholders. Not only that. Surely there would have been interest in Maltapost by other competitive bidders both local and overseas who would have considered the acquisition of a significant or controlling stake in Maltapost as a good stepping stone to the setting up of a fully licensed bank in order to increase the competition which has been so missing in the Maltese banking sector ever since the local operation of Midland Bank was merged into Mid-Med Bank to give a common organisation in the present form of HSBC Malta.

Not only Maltapost would today have been at least eight years down the road in executing the mission for which it was set up but as sure as night follows day government and the Maltese taxpayer would have clinched a much better deal. Firstly through the top dollar which government would have obtained from sale of its shareholding by means of competitive bidding, and secondly the Maltese consumer would have benefited from fairer pricing in banking services by restoration of the competitive element that went missing in 1999.

What happened instead? By mischievous design or by negligence, government allowed Lombard Bank to make a direct acquisition of the equity stake in Maltapost held by the Kiwis and then placed itself in a situation where it could only negotiate with Lombard Bank for further sale of its (government’s) stake in Maltapost. What should have happened is that government should have insisted that the Kiwis sell back their shares to the government at a fair price reflecting their original true investment and their performance under their management agreement and then organise competitive bidding for the sale of a controlling stake in Maltapost.

Wonder of wonders how our press does not even smell these maneuvers and always seems to be very lead footed when it comes to defending the interest of the Maltese taxpayers from the misdemeanors of government who to add insult to injury goes on further to depict such fiascos as creative innovation deserving the applause of fleeced taxpayers. Is it not odd that a government that professes its political religion in the operation of a free market has a knack for opting for direct one to one negotiation when it comes to selling state assets?

Still, for Maltapost it is better late than never. After a largely wasted eight year period searching for its soul all over the world, Maltapost seems back on track for its original mission after being suitored by the guy next door.

Poetic Justice

 7^th September 2007
The Malta Independent - Friday Wisdom

There is some sort of poetic justice surrounding the bid that HSBC parent bank is making to buy a 51 per cent controlling interest in Korea Exchange Bank (KEB).

KEB is Korea’s sixth largest bank. A US private equity fund called Lone Star bought this majority stake in 2003 at what is claimed to be an artificially low price. There was an investigation by the state Board of Audit and Inspection that cleared Lone Star of any wrongdoing but former KEB and government officials involved in the original sale remain under investigation. Korea’s financial regulator seems however unwilling to approve a sale that would generate a huge profit realisation for Lone Star before all court cases are concluded, a process which could take a further three years.

Lone Star has now agreed to sell such 51 per cent in KEB to HSBC but as this is conditional on the approval by the Korean Regulator, it is unclear whether this deal can go through any time soon.

In 1999 HSBC acquired Malta’s Mid-Med Bank at an unquestionably cheap price. Mid-Med Bank was Malta’s largest bank. Can you see the difference of approach between Korea and Malta?

While the Koreans are not being rushed to authorise HSBC’s acquisition of 51 per cent in their sixth largest bank, even though HSBC themselves have nothing to do with the alleged irregularities in the original acquisition of Lone Star’s holding in KEB; the government here still thinks that the sale of 70 per cent in Malta’s largest bank to HSBC at half its real price was a good deal for Maltese taxpayers. No investigations, no audits – just use of the executive parliamentary majority to block further deliberations.

So it must be poetic justice that HSBC are being stalled in their quest for significant entry in the growing Korean market by the very same reason with which they themselves found quick and easy entry into the Maltese market giving them one of the most profitable investments any bank has ever made.

But there are more lessons to be learned from HSBC Korean adventure. In an effort to play to local sensitivities and smoothen the regulatory approval for their KEB acquisition, the Financial Times reported that HSBC are expected to retain KEB public listing and brand name. Let me grant that once HSBC acquired Mid-Med Bank it was sensible to integrate the brand within their international one. But certainly in Malta’s case there was total disregard to local sensibilities when HSBC dropped the name of poet Ruzar Briffa after whom the Operations Centre at Qormi was named.

It is never too late to show deference to local sensitivities by restoring homage to poet Ruzar Briffa especially now that the bank should find it helpful to distinguish the Business Banking Centre from the Operations Centre. Perhaps in further deference to local sensitivities they could consider naming the Business Banking Centre after Gino Muscat Azzopardi, another Maltese poet and historian who hailed from the area where the centre is located.

And if they can take a leaf from their Korean book, HSBC should take further steps to respect local sensitivities by donating in full title the famous Turner water colour painting of the Grand Harbour to the National Museum of Fine Arts. This work of art was bought by Mid-Med Bank in 1998 prior to sale to HSBC and it is more than fair that after making such a great sacrifice, especially through the hard work of Dr Philip Farrugia Randon, this work of art should stay in pure Maltese public ownership.

Let’s stretch it further. Why not revert to the government the title of Hexagon House at Blata l-Bajda which originally housed Lohombus Corporation and the land for which was given on concessionary terms by parliamentary resolution to Lohombus on condition that it is used to locate its financing activities for social housing.

Our government in waiting, whoever that may be, will certainly find it useful to integrate this site in the redevelopment of the inner harbour area, a matter that seems high on the agenda of both our main political parties.

If HSBC can give attention to Maltese sensitivities as much as they are giving to Korean sensitivities then as a nation we can get some real justice, not just its poetic version, for the grossly discounted price at which Mid-Med Bank was presented to HSBC on a silver platter in 1999.

May be this would tone down the rising clamour for the Exchequer to consider introducing a windfall tax on banks to get back a fair share from the excessive and growing profits that banks are continuing to register given the pseudo competition on the Maltese banking markets dominated by two large banks with market shares unobtainable in other countries.

I don’t agree with windfall taxes. Windfall taxes should apply to windfall profits and the profits of Maltese banks are anything but windfall. They are recurring with monotonous regularity. If anything one should consider a regular dominant position tax on those institutions that in fact make profits through their dominant position as already defined in EU legislation.

Taxes and poetry don’t mix.