BICAL • November 2 2003

How Parliament let the BICAL Controllers off the hook

In 1972 a saga started that has continued, intermittently to this date. The government-appointed controllers have been whittling down the assets of the BICAL bank and its associated companies.’ By November 1995, millions of liri in BICAL assets had already been dissipated by the BICAL controllers. The Pace family had been taking recourse in the Courts ever since the release of Cecil Pace from jail in 1985, but now they faced a new obstacle: Parliament had unanimously granted the government-appointed Controllers immunity from prosecution in 1995.
Immunity from prosecution is given in very rare cases, usually to criminals that agree to turn State evidence. Diplomats enjoy immunity for minor misdemeanours, and it is doubtful whether the President of Malta or its Prime Minister will ever be dragged before the Court for minor wrongdoings. Controllers seem to be the luckiest, however, at least in Malta, as they can never be brought to book for anything they do as part of their duty as Controllers.
The law was passed on 8 November 1995 to regulate the work of the Controllers and immunity was granted to all government-appointed Controllers of companies in liquidation. Certainly enough, BICAL was on the forefront of their minds. The then Minister of Economic Services Josef Bonnici, who presented the bill in Parliament, explained in Parliament the bill was motivated by the BICAL story, already 22 years in the making.
The law was meant to speed up the liquidation process up and set procedures for how Controllers were to publish the list of creditors recognised by him as having valid claims against controlled assets, as well as the amount due by the controlled asset on such a claim. Controllers were then to determine any claims and objections made to the list and later draw up a scheme for distribution. Anyone who objected to the scheme could appear in front of an Appeals Board that had been constituted in the same law.
Article 16 of the Act however was the nail in the coffin for the Paces, a clause that would exonerate all Controllers, since their first day of appointment, from any court action – both Karmenu Mifsud Bonnici and Emanuel Bonnello had been taken off the hook:
"No action shall lie against the Controller, the Appeals Board or the Government for anything done under the authority of this Act or the Banking Act and this article shall apply from the date of the appointment of the Controller even if that date happens to be before the date of the coming into force of this Act."
In Parliament the bill was barely debated and the question of immunity was never raised except at the committee stage. The ‘debate’ consisted of an explanation of the law by Bonnici, which was followed by a long reply to explain the difficulties faced by Controllers at determining who exactly were the creditors and what sort of ranking each should be given by Karmenu Mifsud Bonnici, himself a Controller prior to that date.
The only other parliamentarian to speak was Finance Minister John Dalli who explained that the law was needed to speed up the process of paying the BICAL creditors.
The committee for the consideration of bills was then chaired by Nationalist MP Joe Fenech, and included Josef Bonnici, Nationalist MPs George Hyzler and Louis Cuschieri; Labour MPs John Attard Montalto, Wistin Abela and Lino Spiteri; Dr Silvio Camilleri from the Attorney General’s office, and then Controller auditor Emanuel Bonello.
When the question of immunity came up, it was John Attard Montalto that piped up first, suggesting that immunity be retroactive, meaning all Controllers before and since Bonello would be immune from prosecution. He explained: "It seems that several cases have been brought against the Controller and these have been made so as to make him personally responsible for his actions as Controller. I even know that an impediment of departure was levelled against him and a garnishee order on his assets including his home and furniture when he was acting as a Controller. I believe one needs to protect these officials."
The rest of the discussion in which only Fenech, Camilleri, Bonnici, Bonello and Attard Montalto participated revolved around how the law could be best worded to protect the interests of the Controller, the Board of Appeal and the government, and to ensure that the protection was retroactive. Not even one parliamentarian contemplated whether the Controller could act in ways that were detrimental to the owners of the liquidated company.
Winding up the short parliamentary debate following the committee stage, Finance Minister Dalli said: "It is important that we put the Controller in a position to decide and remove the fear that at some time in the future somebody would be able to come along and make a claim on BICAL after all the assets have been distributed.
"What are the depositors waiting for? They are waiting for the day when they can wake up and know how much they will be getting from BICAL. The Law is designed to create a procedure to bring this story to an end, so that, at last the country will be rid of it."
That was eight years ago. The depositors are still waiting for their money.