[ANALYSIS] Trench warfare on Panamagate

Instead of removing the albatross around his neck, by showing the exit sign to Konrad Mizzi and Keith Schembri, in his speech to the general conference where he was expected to send a clear message on the future of his two closest aides, Prime Minister Joseph Muscat once again played for time, postponing what looks an inevitable decision.

In the knowledge that Opposition leader Simon Busuttil would be addressing a protest against corruption calling for his resignation, which inevitably translates in to a divisive pitch, Muscat deliberately tried to project himself as an inclusive leader railing against tribalism.

Had there been no Panama accounts Muscat’s speech on Sunday would have counted as one of his best. It was calm, sober and appealed to people’s rational side. 

On Keith Schembri and Konrad Mizzi he says that “their position would no longer be tenable if it results they lied”. But if it turns out that it was the truth, “it will still not be an excuse not to do anything” and that “we need to send the message that it’s not just about doing what’s legal but also doing what’s right.” 

The problem is its starting point: does Muscat find it unacceptable for a minister and his chief of staff to open an offshore account, especially while holding office as servants of the republic? If Muscat believes this to be unacceptable no audit would change that fundamental fact. If that were the case he would have sacked Mizzi and Schembri seven weeks ago. One major stumbling block for Muscat is that according to Mizzi’s version of events, he had informed the PM of his company in Panama three weeks before the scandal broke out. If Muscat had not seen anything wrong back than, he lacks the conviction to call on his chief of staff and energy minister to resign.

It also indicates that Muscat’s moral compass was out of synch with the way offshore companies in countries like Panama are shunned internationally. In fact it was only after Panama leaks started dominating the international media that Muscat started to distance himself from Mizzi and Schembri. And it was Muscat himself who accepted Mizzi’s candidature as party deputy leader and failed to stop his candidature after the scandal broke out.

Muscat also has a problem reconciling his past reputation for decisive action, which has seen him sack Anglu Farrugia from deputy leader before the election, Emmanuel Mallia from minister after the drivers’ incident and accept the resignation of Michael Falzon over the Auditor General report on the Gaffarena case.

To make up for this indecisive streak, Muscat unconvincingly argues that he does not care if he is losing in popularity by not taking a decision immediately: “Something more important than popularity is justice.” The Prime Minister said he never shied away from taking decisions, but he never was one to base it on the pollsters.

“The day I start taking decisions according to popularity will be the day I stop leading this country and this movement. If I looked at numbers, divorce and civil unions would have never seen the light of day. The numbers said one thing, but my principles, my thoughts and my heart said another.”

The perception Muscat has to contend with is that he is more reluctant to take action in this case because it involves persons in his inner circle, who are part of his government’s central nervous system. Moreover his lack of action coupled with revelations that the companies were formed five days after Labour took office, only to be taken over by Mizzi and Schembri two years later, only serves to raise more questions. The worse scenario is where inaction by the PM leaves room from all sorts of conspiracy theories.

Still Muscat adds that he will be taking “action”.

The problem for Muscat is that the only action he can take is to heed to pressure coming from his ranks, including former party leader and Prime Minister Alfred Sant and education minister Evarist Bartolo, to either convince Mizzi and Schembri to resign or to sack them. So if Muscat has already committed himself to take action, it remains a mystery why he is procrastinating on it.

It is against this backdrop that Muscat’s pitch to inclusive politics loses its pre-2013 sheen. Muscat said he was not interested in leading a tribe: “I took an oath to lead the country. I will not be among those who sow hatred.” But Sunday’s speech looked too much as a re-enactment of the pre-2013 days against a very different backdrop dominated by Panamagate. Moreover his appeal against tribalism contrasted with a speech delivered just minutes before in which his economy minister warned the PN that “if you hit us with a sword, we will hit you back with an axe.” 

On a positive note Muscat also committed himself to publish all contracts related to energy and health by the end of the year, with the proviso that this will not include “commercially sensitive” data, a normal practice if what is commercially sensitive is clearly defined.

Simon Busuttil ups the ante

On his part Simon Busuttil has raised the stakes by turning the national demonstration in to a call on Muscat to resign.

In so doing Busuttil was either trying to anticipate any move by Muscat to ditch Mizzi and Schembri before the protest or was banking on new revelations, which put Muscat under the spotlight, insisting that the prime minister has “lost all moral authority to govern”.

He also directly inferred that the PM might be involved in this case. “Who does this third Panamanian company belong to?” he questioned to the cheering crowd? referring to Egrant, one of the three companies set up by Nexia BT just days after the 2013 election. 

He also made a pertinent question which haunts the Muscat administration:

“Which businessman who negotiates with Muscat will not question whether he will have to pay a secret commission fee somewhere along the line? What will the other European prime ministers think of Muscat when he tries to defend Malta’s financial services sector? They will tell him that he should have first kicked out Mizzi and Schembri. 

But by focusing on Muscat, Busuttil risks re-uniting the Labour group against him instead of encouraging dissent on the government’s benches. For Busuttil would have seriously threatened Muscat had he presented a motion of censure in Mizzi and Schembri weeks ago, something, which would have put some government MPs, and senior ministers in a difficult position. Moreover by calling on Muscat to resign, Busuttil gives the impression that he is questioning the government’s electoral mandate.

Busuttil tried to counter this impression arguing that the party drew up the motion “to show that there is someone in Parliament who is ready to reflect the people’s real sentiment” not because “we want an early election.”

Busuttil’s protest gamble did pay off in terms of international coverage and sheer numbers. But Busuttil’s own speech was predictable. Once again he was in synch with popular anger on this issue, but lagged in presenting himself as a statesman who can make things better. His own good governance stance is also being questioned with his defence of a loan scheme for his own party, in which the names of lenders are not published, a shortcoming that is easily exploited by Labour, whose leader dubbed the scheme as a “Panama in the PN”.

Overshadowed by Marlene?

The highlight of the PN’s protest was an emotional speech delivered by independent MP Marlene Farrugia who managed to stir the crowd. She also expressed popular anguish when she openly declared in front of a PN crowd that the public had punished the Nationalist Party for corruption in the last election. “It is now up to them to change, and that is what they are trying to do,” she said to a round of applause. “The government says Malta is changing. It is and that is why we are here. We want change, but for the better,” she said. 

Unlike Busuttil, Marlene Farrugia also humanised the corruption issue. “Corruption bears the face of the woman who needs cancer medication but has to beg to the MCCF, it bears the face of the warden who has to give tickets or risk losing his job. It has the face of lost opportunities, the taxes that they have invested in their country that are supposed to be used to promote social inclusion.”

Yet by participating in a rally organised by the PN, Farrugia, who is still intent on creating a new political party, has sent a mixed message to potential voters who shun both parties in equal doses.

Unlike Farrugia, the Greens kept their distance from the PN while keeping the pressure on Muscat from their own turf. One risk for Farrugia who argues that her participation was dictated by the national interest is that those who reluctantly regard the PN as a lesser evil will see her participation in a PN event as a confirmation that the priority in the next election is a change in government.

Marlene Farrugia may plausibly argue that this is the continental way of doing politics, which sees leaders of rival parties uniting behind a common cause. But in highly partisan Malta many may interpret her participation in an event organised by the PN as evidence that she is in cahoots with the opposition which may well be her ultimate political destination, thus going back full circle.

What is sure is that Farrugia is not averse to risk and has the popular touch which many third party exponents lack. Farrugia may well be attracting the good will of rank and file PN voters and thus enable her party to exploit the electoral system by banking on second preferences of these voters.

Moreover by elevating Farrugia, the PN will find it difficult to tarnish her reputation on the eve of the election, if she becomes a threat to them.

In some way, it is Marlene Farrugia who has the upper hand over the PN. The PN need her to legitimise their stance beyond the party core while she can keep her options open, toying with a new party while benefitting from the opposition’s good will. Yet in doing so she has to ensure that she does not lose those who are putting her trust in her because they are fed up by both parties.