Adrian Delia considers taking wage as PN debts balloon to €25 million

The Nationalist Party remains in dire financial straits, even as its new leader Adrian Delia takes up a poisoned chalice to return its debts to sustainability.

Only days since Delia said he would not rule out taking a wage from the party – a comment that struck a different tone from predecessor Simon Busuttil, who relied on his parliamentary honorarium – MaltaToday has learnt that both the PN and its subsidiary Media.Link are heaving under a total debt of €25 million.

The details of the debts put paid to claims that the party had returned to financial stability under Busuttil, for the party and its media arm have to raise thousands every day to finance their debts.
  The repayment programme in fact has to cover several outstanding debts with various banks: €3 million payable to Bank of Valletta, €7 million to HSBC, €1 million to APS Bank, the €4 million that was collected through the PN’s ‘cedoli’ loans scheme – which capital was used to repay other loans and reduce interest rates on outstanding loans; but also another €6.5 million in outstanding national insurance contributions, €2 million in pending utility bills to ARMS, and other creditors.

Most of the debt is hived off under Media.Link, which has allowed the party to camouflage the extent of it debt. Already the party was revealed to have accepted financing from companies such as the db Group, which “donations” were being invoiced in the form of services offered by Media.Link.

The revelation comes at a sensitive stage for the PN, when Adrian Delia stated in an interview with LovinMalta.com that he would not rule out taking a salary – unlike Simon Busuttil, who relied solely on his honorarium as Opposition leader.

“I think there is nothing at all untoward about someone receiving a salary for a full-time job,” he said “We need to be transparent in politics, but what’s the point of giving gestures simply to give off an impression? I appreciate that previous leaders refused a salary when the party’s finances were what they were, but there’s nothing wrong in me taking a salary if we manage to create new income streams and balance the party’s finances.”

During the campaign, Delia fended off questions on his personal finances by telling journalists to investigate the PN’s own finances.

“Financial sensitivity must be respected and the party’s agreements must be adhered to,” he said in a volte-face on the party’s financial situation. “Four years ago, the PN was in a dire financial situation but this has been taken stock of and structured and the PN is paying every single amount of debt and obligation.”

Insiders who have spoken to MaltaToday however described the party’s financial situation as a serious one.

“Delia’s supporters have been given the impression they are about to find new placements inside a revamped Net TV,” a source told this newspaper. “Net TV is precisely the primary reason for the party’s black hole. Bad management left us in the red, and employing more people there would be its death knell.”

According to its financial returns presented to the Electoral Commission under new party financing rules, the PN has declared a total debt of €8.4 million: two bank loans of €415,210 and €2,894,005 respectively and borrowing from other related parties of €2 million. The borrowing from third parties – referring to the scheme popularly known as ‘cedoli’ – reached €3,527,100.

The cedoli scheme was a system of small loans of €10,000 at an interest rate of 4%. The money loaned under the scheme is repayable in full at the expiration of a ten-year period commencing from the date of signing of the loan agreement.

In March however, it was revealed that the PN was using Media.Link to invoice business groups that were donating money to the party, in the guise of commercial services.

The PN was accused of breaching party financing rules, after Silvio Debono’s db Group alleged that it had been asked to pay the salaries of top PN executives, through donations “paid” to the PN’s media company Media.Link. The PN claims the monies were backed up by actual commercial services rendered.

This has led to the PN being investigated by the Electoral Commission, with the PN insisting that it will not publish copies of these invoices, citing the privacy of the commercial arrangements between Media.Link and its clients.

MaltaToday was at the time told by sources privy to the commercial documentation, that Media.Link had received approximately €560,000 since 2013 from two catering companies part-owned by the hotelier Silvio Debono – the airline catering company Sky Gourmet and Malta Healthcare Caterers, which provide catering to homes for the elderly and hospitals.

Sky Gourmet Malta exclusively provides catering services to airlines and does not normally take out advertising.

db Group CEO Arthur Gauci had said in a statement that the report was not true, and that the “recurrent amount” donated was only €70,800. MaltaToday’s source had then insisted that the information was correct: “The recurrent amount is indeed of some €70,000 for two salaries, annually, over the past four years – an amount of approximately €560,000.”