26 July 2006

The Web
Business Today

Bad corporate governance

Irrespective of whether the argument being made by Richard Muscat and other government exponents that the expenditure procedures adopted at the now defunct Voice of the Mediterranean did not fall within public procurement regulations is correct or not, something was definitely wrong with the way the station was run.
The whole issue is one linked to good corporate governance or rather the lack of it.
Getting lost on the purely technical and legal argument of whether Muscat as managing director of VOM was answerable to government procedures is trying to avoid the far more serious argument of whether he managed the station in a diligent way.
This leader still has serious doubts as to whether Muscat’s interpretation of public procurement regulations is correct. After all he was utilising public funds just like any other State-owned entity. The defence being mounted now by Nationalist Party parliamentarians for Muscat jars with the continuous attacks the very same exponents had levelled against the drydocks for mismanaging public funds advanced to it over the years.
But the more serious issue at stake is whether Muscat adhered to the principles of good corporate governance.
The auditor general’s report leaves no doubt as to the way VOM was managed. Muscat behaved as if the company was his. Throwing all caution to the wind and simply dishing out thousands of liri in costly refurbishments and frivolous expenses is not the best way to manage a company, let alone one that is substantially financed by tax payers’ money.
Muscat’s defence is pathetic to say the least. His argumentation insults honest tax payers. The very fact that Muscat contracted a company with which his son worked to create a web site for the station is insulting. It has undertones of nepotism; the very same nepotism Muscat so passionately preached against in the eighties from his hideaway in Sicily.
Attacking the auditor general will get Muscat nowhere. The tactic adopted by the current administration of trying to undermine the credibility of public officials who in the course of their duty expose gross shortcomings on the part of government, is pitiful and a serious sign of political deterioration.
The obvious question that needs to be answered is where was government when Muscat was on a spending high? Why was he allowed to go on running up exorbitant bills at a time when the station was facing serious financial difficulties? Was Muscat ever asked to justify his expenditure?
We refuse to close an eye on this incident because it sheds serious doubts as to the way accountability is managed in the public sphere. Surely, Muscat and his immediate superior in the ministry of foreign affairs, former permanent secretary Gaetan Naudi have to answer for their misdeeds.
They should be held accountable and government must not try and defend their actions. Immediately, both Muscat and Naudi have to be asked to resign from their current ambassadorial posts. Their reputation has been tarnished by the findings of the auditor general and are not worthy of representing the country at ambassadorial level.
How can they be trusted to handle the budgets of the respective embassies they run when the fiasco at VOM is there for all to see?
Accountability must not stop with politicians. It has to trickle down to all levels of the public service. And unless the current foreign minister wants to be dragged into the issue, he should ask for Muscat and Naudi’s resignations.
If government chooses to sweep the VOM fiasco under the carpet it will be sending out a very negative message that fudging with public funds is acceptable. That can only perpetuate the feeling of despondency among the general public.
Good corporate governance must be government’s maxim in all it does. Acting otherwise will only create a feeling of mistrust that does not only threaten the Nationalist Party’s electoral fortunes but also society’s moral fibre.

Gatt’s arrest warrant
From where Minister Austin Gatt draws the power to threaten journalists with arrest is beyond our comprehension. His behaviour last Monday during the public accounts committee where Richard Muscat was going to be questioned, is condemnable.
Gatt should have never threatened the One news cameraman with arrest.
Journalists have a duty to inform and in all matters related to parliament it should be the rule rather than the exception for the media to have unhindered access to all that is being discussed.
Minister Gatt, or for that matter, any other politician, should have no prerogative on what journalists decide to report or film.
The media has an important informative, analytical and investigative role to play in society and the sooner politicians realise this the better it is for everyone.

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