PN secretary-general on loans scheme: ‘Nothing in life is guaranteed’

The Nationalist Party’s initiative to seek financing from small loans of €10,000 on an interest rate of 4%, does not oblige the party to publish the names of its creditors because the scheme is not a donation.

At a compound interest rate of 4%, the principal €10,000 would rise to €14,802 after 10 years.

“We will do what the law requires us to do,” PN secretary-general Rosette Thake told reporters, skirting questions as to whether the PN will keep its creditors’ names secret or not.

Malta’s party financing law considers only loans granted to political parties at more favourable rates than commercial loans, as donations.

When asked whether she felt the PN should publish the names for the sake of transparency, Thake replied: “this is a private contract between the party and an individual.”

When prompted, she said that the PN would publish the names only if the person making the loan agrees to it. “This is a two-way street and I find no problem in publishing the name if the person agrees to it,” Thake replied.

She argued that since the PN would be paying interest, the ‘loan’ was not a donation.

The scheme is not capped, meaning that one person can donate more than €10,000 – as long as they are issued in small loans of €10,000.

Thake also said that the Nationalist Party had informed the Malta Financial and Services Authority (MFSA) of its scheme but argued that it didn’t require the MFSA’s authorization. “This is a private contract and the conditions have been published in the brochure,” she said.

Asked whether the capital was guaranteed, Thake replied that “in life nothing is guaranteed” and that the scheme was part of the PN’s financial restructuring.

The party has several commercial loans against high interest and the scheme, she added, should help reduce the amount of interest the party is paying. “We want to reduce the outgoings,” she said.

Questioned once again over the capital guarantee, Thake replied that she could only guarantee that “the PN’s level of indebtedness decreased over the past three years”.

The PN was wracked with a reported €5 million debt at the start of 2013, and has since underwent radical cost-cutting internally as well as sold off party club properties.

Thake would not confirm the amount of debt the PN had accumulated, nor would she say whether the PN had managed to repay the €250,000 loan construction magnate Nazzareno Vassallo had issued to party company Media.Link Communications.

“We have a good relationship [with Vassallo] and there is an agreement,” she said.