PN won’t take cash, won’t publish creditors’ names for loans scheme

PN loans: 'Only cheques will be accepted'

The Nationalist Party is standing its ground over a decision not to publish the names of individuals who come forward and participate in the ‘Cedoli 2016’ fundraising scheme.

The scheme allows for loans of €10,000 that it will repay over the next 10 years at an interest rate of 4%.

The scheme falls outside the scope of recently enacted party financing rules, which also means that the creditor’s name need not be recorded.

Insisting that the scheme was completely legal and it was not a donation, Opposition leader Simon Busuttil refused to commit himself to publishing the names of the party’s creditors.

“These are private loans. It is a legal scheme, precisely drafted for good governance in the financing of political parties. It sets an example of how parties should be financed. The scheme does away with the political minefield that comes with donations,” Busuttil told MaltaToday.

Reiterating that it was a private loan, Busuttil said that the PN could not publish the names of those granting a loan to the party, just like “no one tells you what to do when you lend money to someone or someone give you a loan”.

The scheme has come under fire by various quarters, including the Labour Party who argue that the PN’s system of €10,000 loans raised “serious suspicions” that these had been designed to evade the controls introduced by the new party financing law, which caps donations from individual sources.

“Best practice dictates that a public contract is necessary to regulate loans of over five years, but this scheme is anything but transparent. Does the PN want to evade this by hiding the identities of its benefactors?” Justice Minister Owen Bonnici told the press last week. “Is this transparency? Is the party ready to tell people that they are safe in making loans by private writing?”

Other critics have suggested that the scheme risked attracting abuses, such as money laundering – a claim which Busuttil strongly rejected.

“It doesn’t give rise to money laundering because it is legal and we are only accepting cheques,” he said, arguing that this was where due diligence came along.

Busuttil said that the party will not be accepting cash.

“The bank has clear rules of ‘know your client’ and money coming in through cheques would be certified as being ‘clean money’.”

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 selling off party club properties.

The exact amount of debt accumulated by the PN is not known, however Busuttil claimed that the scheme had attracted strong interests. He would not say how many people had come forward and the amount of loans so far.

Turning to the Panama Papers, Busuttil said this was the “biggest corruption scandal ever on an international level” and that energy minister Konrad Mizzi must go.

“[Mossack Fonseca] is a dubious company that works with dictators and ex-dictators,” Busuttil said.