The tip of the iceberg

The Economic Crimes Unit this week uncovered what appears to be a complex corruption and money-laundering operation embedded within Transport Malta.

So far three suspects have been arrested (and a fourth has admitted involvement) in connection with a scam which - according to the prosecution - would have defrauded the government of over half a million euros in the past year alone.

The mechanics of the scam will surely ring a bell among those of our readers who remember several remarkably similar fraud and corruption scandals in recent years. Assuming that the allegations are well-founded, the operation uncovered by the police is understood to have involved collusion between a government-contracted architect and an independent contracting firm, in order to artificially inflate bills for roadworks and similar public projects to the detriment of the Malta treasury.

Although the individual cases are clearly not in any way connected, one is inevitably reminded of a number of other similar scandals to have sporadically erupted in various other government entities and departments over the years: among them, the notorious corruption scandal that had rocked the VAT department in 2009, as well as a similar scam within the Malta Maritime Authority, whereby maritime licenses were almost literally bought and sold.

Perhaps ironically - given the success of the police's economic unit in bringing such cases to light - the sheer number, regularity and predictability of such offences can only leave an unmistakable taste of something very rotten within the fabric of the public service as a whole.

Matters are naturally not helped by the fact that Eurobarometer surveys have consistently placed Malta towards the very top (currently we are at number two) in a list of EU states ranked by popular perceptions of corruption; suggesting that the general public has grown almost resigned to the impression of corruption almost as a way of life.

Nor does it bolster public trust in such agencies and/or departments that the people who actually get caught red-handed in such cases tend overwhelmingly to occupy only low-level positions... despite often glaring indications that the practices in question may well be far more widespread and ubiquitous than the police charges alone would suggest.

Admittedly it is too early to ascertain whether this is also the case with the latest Transport Malta scandal; but in recent analogous cases there has been more than just a suspicion that the authorities at the time were content to prosecute only the 'small fish' involved in any given crime. 

The VAT corruption case is perhaps the best illustration of this state of affairs. In September 2009, 21 men were arrested and eventually convicted over a VAT scam which had hived off literally millions of euros from the VAT Department.

Despite the severity of the charges (and although seven of the suspects pleaded guilty in court), they were handed down only suspended sentences, and fined such paltry sums as €450... prompting a national outcry at the perceived leniency of the law-courts.

To make matters worse, a systems audit of the VAT department (released by the Finance Ministry only after much political pressure) later revealed a glaring lack of accountability and risk awareness amongst VAT department management at various levels; while confirming serious deficiencies in the training and supervision of staff.

The entire episode had severely dented the government's credentials in the fight against corruption; not so much because of the suspected collusion of top-level politicians, but because both the damning nature of the report itself, as well as the subsequent reluctance of the Finance Ministry in making it public, strongly suggested that the government had abdicated its responsibility to take the issue with the seriousness it so clearly merited.

Clearly, something needs to be urgently done to address the negative popular perceptions caused by these and other offences; and coming back to the present case, it must be said that the responsible minister's response has not, to date, been very encouraging.

Transport Minister Austin Gatt has so far deflected all criticism by pointing out - not incorrectly, to be fair - that the arrest of a TM official in itself illustrated that the country's anti-corruption detection systems were in fact functioning properly.

This may indeed be the case when it comes to the lower echelons of public service corruption; but government's reaction when faced with other, much more serious issues has consistently been to withdraw into a state of perpetual denial.  

Examples include the BWSC affair, which had culminated in a singularly damning report by the National Auditor, as well the farcical suggestion that a contractor known to be extremely close to the present administration, had been chosen at random from the Yellow Pages.

Given overwhelming indications (confirmed repeatedly by surveys) that the general public is simply not buying into the 'official versions' of these and other similar cases, it is clearly not enough for the present government to point towards the arrest of a single government architect, as if to argue that this alone will allay all popular perceptions that corruption is rife throughout the system.