In 2016: will this be the year Joseph Muscat cleans up his act?

2016 offers Prime Minister Joseph Muscat an opportunity at redemption through institutional reforms aimed at strengthening the independent institutions. It represents the last chance to focus on these reforms before electoral fever grips the country again in the last months of the administration. But Muscat may well have to balance this national need for better governance with the self preservation guaranteed by a tried and tested self serving system of political patronage which can well secure him valuable votes and financial support in the next election. 

A tarnished record

So far Muscat’s contribution to good governance has translated in the approval of long overdue bills regulating party financing (which according to the Council of Europe anti-corruption watchdog - GRECO - is positive but is still not watertight) and a bill giving protection to whistleblowers which has so far been used to arraign the husband of former Gozo Minister Giovanna Debono. One may say that in these two aspects Muscat has already done what the PN failed to do in 25 years. 

But the appointment of persons of trust across the board in the country’s administration, in a way which defies the Taghna lkoll promise, the appointment of Labour MPs on government boards in a way which makes them dependent on the Prime Minister’s generosity, thus undermining their independence, a slackening of the planning regime which has seen the approval of a number of dubious permits, including one for parliamentary secretary Ian Borg in Rabat, chastised by the planning ombudsman, and controversial land expropriation deals, have severely dented Muscat’s credentials in good governance.  

2015 proved to be an annus horribilis for Muscat when it comes to good governance.  In February 2015 the Auditor General found insufficient justification for the government’s decision not to pursue legal action in a bid to rescind the lease on Café Premier in Valletta, through a €4.2 million payment to buy back the 65-year lease on the cafeteria revealed by MaltaToday a year before.

In March the Auditor General also questioned a “ministerial direction” in a hedging agreement with SOCAR. In June the government’s good governance credentials received another blow in view of the €1.65 million expropriation of half a property in Old Mint Street, Valletta, from Mark Gaffarena in two separate contracts earlier in 2015.

The year ended with parliament being rushed to approve the land transfer to the Sadeen group before the Christmas recess in the absence of any tendering procedure, and after the government acknowledged that the American University of Malta would not be recognised as a university but as a “high education” institution.

Muscat’s lack of sensitivity to good governance was epitomised by revelations that his wife was taking the role of mediator in disciplinary actions in the army. All in all this suggests that Muscat believes that he personifies the state and has very little motivation to limit his power.

Moreover, in some instances like planning, where the power of the minister has been increased at the expense of technical experts, Muscat’s reforms have stood out as a reversal of more stringent and transparent procedures introduced by past PN governments, especially after 2008.  

Muscat’s political football

Muscat’s fall-back was a series of equally devastating scandals involving former Nationalist ministers Giovanna Debono and Joe Cassar. But with Opposition leader Simon Busuttil cleaning his own act by making both politicians resign and presenting proposals aimed at improving transparency and improving good governance, Muscat may well have lost the initiative. Labour may be counting on further blows to the opposition based on revelations on past scandals kept in store for the next electoral campaign, but this cynical use of scandals as ammunition, may further dent public trust in the entire political system.   

Muscat could not even question the validity of proposals which, if implemented, would stop him from appointing his MPs on government boards and dent his drive to further centralise power in Castille. Instead he tried to throw back the ball in Busuttil’s court by harping on the PN’s refusal to participate in a commission set up to discuss constitutional reform led by former PN rebel Franco Debono, whose vote determined the fall of Gonzi’s government. In this sense Debono serves as an alibi for Muscat, an excuse to postpone reforms.  

Apart from the PN’s objection to Debono, Muscat deliberately misses the point that most of the proposals made by Busuttil do not require constitutional reform and simply translate into normal administrative practices, such as by not appointing MPs to government boards, as Muscat has systematically done in the past years.

Moreover it will be increasingly difficult for Muscat to refuse Busuttil’s offer of having discussions on constitutional reform chaired by President Marie Louise Coleiro Preca, a popular former Labour politician appointed by Muscat with the unprecedented support of the opposition.

A second republic? 

Muscat may even use constitutional reform as an opportunity to present himself as an agent of change in the future while wielding the reigns of power accorded to him by the present system until the next election.   

Still 2018 may be too early for Muscat to introduce limits on his power. In fact he may well feel that it is unfair for the PN to limit his power after failing to limit theirs in 25 years of government.

For Muscat’s declared aim is that of winning two consecutive elections and thus go down in history as a winner who was never defeated by a PN leader. He may well prefer to dedicate a second term to the “second republic” project, which would only take shape after he secures a second victory for his party by cynically benefitting from the same power of incumbency his party vehemently condemned when in opposition.

Moreover it is unclear what Muscat’s proposals for a second republic are – will he be proposing reforms securing more checks and balances limiting the power of governments, or will he seek to enhance such powers by institutionalising a presidential system of government?

Gaffarena as an opportunity

It is the Gaffarena case which may offer Muscat an opportunity of temporary redemption. Muscat has already shown his political mettle by sacking Manuel Mallia, who would not resign after his driver was involved in a shoot out. He may well do the same with Michael Falzon.

Yet the auditor’s report into the deal involving Falzon may present Muscat with a problem. For if the report simply confirms what we already know, that government property was over-valued to Gaffarena’s advantage, Muscat will have to invoke “political responsibility” as the reason for making Falzon resign.

While such a course of action is most welcome from an institutional point of view, it may set a precedent, which would apply to other ministers and my re-ignite internal divisions in the party of which Falzon was once deputy leader and a leadership contender.

An aggrieved Falzon may well present a problem for Muscat, especially if Muscat fails to use the same yardstick against other cabinet members accused of overlooking abuses on their watch. 

Moreover it was Muscat himself who handpicked Falzon as the junior minister in the Office of the Prime Minister responsible for two hot potatoes: MEPA and the lands department, two strategic departments where the interests of big business and political parties often coincide. In some ways Muscat had trusted Falzon to serve in the most sensitive of posts.

Moreover it also raises the question of why Muscat had to wait for so long before taking a decision on what to do with Falzon. Still, taking decisive action on Falzon may give Muscat the chance to show that he means business and that none of his cabinet members has a perpetual lease on power.

One option for Muscat would be that of standing by his ministers facing allegations, as Eddie Fenech Adami and Lawrence Gonzi did in most cases. The party has done so already in the case of Ian Borg, in the safety of a corruption commission report which endorsed the ombudsman’s damning report but found no evidence of corruption.

The party has also defended its Marsaskala mayor, who despite admitting to soliciting a premises for the council from Sadeen, was cleared by a governance board whose members include notorious Lorry Sant aide Ronnie Pelligrini.

But if he stands by Falzon, Muscat risks misjudging the mood of the country, which has grown less tolerant of blatant abuse. In fact Falzon may be useful in giving the country its pound of flesh. By sacrificing Falzon, Muscat may well buy his own redemption. 

Does it pay to be honest?

One question lingers, whether good governance is enough of an issue to dent Muscat’s hold on power before the next election. One may even conclude that good governance on its own may come at a loss.

This may explain Muscat’s reluctance to address long standing issues such as the occupation of public land at Armier, an issue which may well cost Busuttil votes following his decision to rescind his party’s past agreements with the Armier lobby.

In planning Muscat may even be expecting the dividends of planning policies which may have opened the flood gates for ODZ developments but have led to an appreciation in the value of derelict properties. Moreover, by accommodating lobbies like developers who were traditionally closer to the PN and forcing the latter to take a stance, which further alienated the opposition from these lobbies, Muscat may have secured essential support in winning the next election.

For one thing has to be recognised: Muscat’s policies have also benefitted commercial groups traditionally closer to the PN who may now feel safer with Labour in power.  Sandro Chetcuti’s invitation to his fellow brethren to make hay while the sun shines may send shivers down the spines of environmentalists but may signal a dramatic realignment in the political system, with Labour repositioning itself to the right of the Nationalist Party.

The downside of this is the creeping perception of oligarchy, from which some may already be feeling left out or not included enough. For while Gonzi’s main problem was saying to many nays and a few big notable yeses to the few, which made the excluded angrier, Muscat’s main problem may be that his many yeses will be never enough to satiate everyone, especially if the appetite of speculators and rent seekers continues to grow unabated.

Added to this is the inevitable alienation of the traditional Labour voter and switchers who truly believed in the Taghna Ilkoll pledge and who harbour an aversion to big business.  Muscat may well feel safe in the knowledge that Labour core voters may be disgruntled but will never cross the Rubicon, and that it may take more than one election for the PN to be trusted again in government by switchers who left it in 2013.   

Feel-good versus good governance

Muscat may also bank on the feel-good factor generated by economic growth to cross out any misgivings on his style of governance.  So far Muscat has proved himself as a very capable manager of a capitalist economy.

Moreover, unlike Alfred Sant he projects optimism and hope in a prosperous future.   Not only has he defied the doomsday scenario evoked by Simon Busuttil before the 2013 election (when he warned that Malta risked a bailout under Muscat) and retained the economic stability of the Gonzi years, but he has banked on accelerated economic growth triggered by a state-induced construction boom.

He has also used some of the monies in sustainable social investment in universal childcare services.

But this ignores the impact of bad governance and dependence on construction and the exploitation of foreign cheap labour on the long-term fortunes of the economy and social well being. The sudden economic collapse of countries like Spain (after a decade of property bubble which burst on former Socialist leader Jose Luis Rodriguez  Zapatero’s watch) and Greece (which was acclaimed as an economic success story when it was hosting the Olympic games in 2004) stand as reminders of how cronyism and political patronage weigh down on the economy, even after bursts of apparent growth mostly triggered by speculation and trickle down illusions.

Moreover, attracting big Middle Eastern and central Asian money may be the sign of a confident globalism but in the absence of good governance this may also accelerate the descent in good governance standards of countries where businesses are all too familiar with cronyism. When handpicked in the absence of public tenders, such businesses may well seek the same treatment from the Maltese government in what could become a race to
the bottom.