Ombudsman’s last hurrah

In his last annual report, the current Ombudsman, Anthony Mifsud, has lamented that the public service needs to regain the virtues of meritocracy, professionalism, efficiency and loyalty to the government of the day; while at the same time delivering a service that can ensure continuity in full respect of laws and regulations and be able to stand up and attempt to check maladministration and abuse. Mifsud has decided to retire and not seek, or accept, a further term in his very sensitive post.

According to him, public officers should deliver a service that is in all instances administratively correct and not politically or otherwise convenient. As he put it: “These are the traditional standards that permeated the public service and which the country has had the good fortune to enjoy for decades. They are the standards that can guarantee the exercise of a good public administration to which citizens are entitled. Much has been lost and in some respects these virtues have been severely dented. Much needs to be done to regain and restore them to the desirable levels.”

While I agree wholeheartedly with both his realistic assessment and pious wishes, I reckon that things have gone so bad that the return to the days when civil servants acted in the manner which the Ombudsman so succinctly and correctly described, is not visible on the horizon.

The rot was initiated by the politicians in power. In my book, things started to go really bad under the 1971-87 Labour administrations and they never recovered.

But besides political interference, Maltese society has changed so much in the last five decades that, amongst other things, the civil service has lost its lustre and young high fliers are no longer attracted by it. Today, most jobs with the government are for the lackeys who cannot make it on their steam in the real world.

In Mr Mifsud’s days, except for the few students who joined a University course, the best job one could get was in the civil service. I remember an acquaintance that used to say that his positive break in life occurred when – to his mother’s dismay – he failed the exam to join the civil service. He then opted to set up his own business in which he was very successful, earning much more than he would have had he passed that crucial examination and joined the civil service.

Today the average student gets a degree from the University or a certificate from MCAST. Except for the course leading to a BA (Hon) in Public Management degree, these institutions do not entice people to join the civil service. Young people of the calibre of the ‘old’ civil service stalwarts have so many employment and career opportunities nowadays with the civil service not even being considered one of them. The civil service has lost its lustre in the eyes of practically everybody.

As these ‘old’ stalwarts – like Anthony Mifsud himself – retire, the civil service cannot replace them with new fresh bright youngsters raring to go.

Not only do young people today have opportunities that were unheard of in the days Mifsud nostalgically recalls, but the civil service has become so politically manipulated that many serious youngsters shun from even dreaming of joining it.

The unions representing government employees do not help, either. Their obsession with the right for promotions and seniority has continued to undermine the civil service. The question of salaries also looms. Salaries for high civil servants are poor when compared with salaries of people with similar capabilities in the private sector. Besides this, there is also the effect of the unions constantly trying – as a matter of principle – to keep salaries in all civil service scales related to each other.

The Faculty of Economics, Management and Accountancy (FEMA) at the University does organise a course leading to a degree of Bachelor of Arts (Honours) in Public Management, a course designed to provide students with ‘a multidisciplinary intellectual skills-set on how to manage and lead public entities, thus contributing towards good and effective governance’ as the faculty itself officially puts it on its web-site.

I could not find how many people with this degree have actually joined the official civil service or found a job with some state entity.  However, considering what is happening in the civil service today, I do not reckon that the number is staggering.

The current administration does not seem unduly worried with this situation – progress on this front does not bring in any votes!

A fine so fine

The media recently reported that a fine imposed on the now defunct bank Satabank by the Financial Intelligence Analysis Unit (FIAU) has been slashed from €327,500 to €68,000 after the bank appealed the penalty.

An updated notice published by the FIAU informed all and sundry that a fine which they had issued against the bank in October 2018 had been revised by the Court of Appeal which decided that while the enforcement was correct, but the fine was too high for the legal provisions that had been breached.

Satabank had shut down in 2018 after both the FIAU and the Malta Financial Services Authority (MFSA) found extremely weak anti-money laundering structures in place.

In October 2018, it was fined €327,500 for failing to reply to requests made by the FIAU within the stipulated timeframes and for also providing the same authority with incorrect information.

This fine is not part of a separate massive €3.7 million fine which the FIAU slapped onto the bank for its anti-money laundering shortcomings.  That fine was reduced to €851,000 also upon appeal.

Although FIAU were correct to impose the fines, the court noted that the administrative penalties imposed by the FIAU for both of the regulatory breaches were too high.

This is not the first time that the Court of Appeal has drastically reduced what it considered to be exaggerated fines imposed by the FIAU.

Is the FIAU slapping exaggerated fines in order to make a show of how serious and rigorous it is? Are those being fined in this draconian manner, victims of the FIAU’s need to sell the notion – both locally and internationally – that Malta looks at breaches in financial regulations very seriously?

If rather than meting a just fine, the FIAU is acting like a ferocious watchdog for other reasons - as a number of Court decisions imply – then it is shooting itself in the foot.