|
Kurt Sansone
Malta Labour Party leader Alfred Sant seems to be unperturbed by damning revelations that the Party was implicated in tax evasion in the payment of its employees for the financial years ending 30 June 2002 and 2003.
Sant chose not to comment when confronted by MaltaToday with the allegations made in an auditor’s report that was sent to then-MLP secretary general Jimmy Magro in November of last year. The ‘management letter’ was drawn up by the Party’s auditors Ernst & Young, and stated that “not all remuneration paid to full-timers and part-timers is being declared for tax purposes.”
The revelations were published for the first time by MaltaToday last week and the management letter also implicates the Malta Labour Party in not exercising internal control over the collection of Party funds. It states that funds collected by MLP volunteers years ago remain uncollected.
The allegations are serious, but as often happens in Malta when it is in their interest, the powers that be remained silent.
The auditors report also paints a worrying picture of the financial state of the MLP’s broadcasting company One Productions Ltd, and warns that should that company’s finances worsen it could spell trouble for the Party and the directors of One Productions: Louis Attard, Renald Dalli, Paul Lia, Pauline Miceli, Anthony Sultana, JG Vassallo and Michael Vella Haber.
On Friday, after addressing a press conference organised by the Labour Youth Forum, MaltaToday asked Sant for his reaction to the auditors’ report.
“I have no comment to make,” he replied without denying the accusations made in the report. When asked whether the allegations of tax evasion worried him, Sant reiterated that he had no comment to make and walked away from the conference hall.
Evasive answers
A similar reaction came from the MLP’s Vigilance and Discipline Board Chairman Tommy Roberts when contacted by phone on Friday. Roberts said he had not seen MaltaToday’s story when asked for his reaction. Confronted with the contents of the auditors’ report, Roberts simply said he had nothing to say.
Asked whether the autonomous board would initiate an investigation on the serious claims made by the auditors, Roberts said: “I have nothing to tell you.”
Even Secretary-General Jason Micallef was evasive when replying to a series of questions sent to him by this newspaper.
Micallef did not say whether the party administration took any steps to address the issue of tax evasion. He did not comment on whether the claims made by the auditors would deal a blow to the MLP’s credentials when it speaks against tax evasion.
Micallef did not say who was responsible for the weaknesses pointed out by the auditors in the cash donation collection system or whether any steps were taken to recoup the missing cash donated by MLP supporters.
MaltaToday also asked the secretary-general whether the new administration elected in November last year was aware of the situation but no answer was forthcoming.
Instead of replying specifically to each of the questions, Micallef said: “Party accounts are kept to the best standards possible. Labour is the only political party that has introduced professional accounting and control procedures that are being updated continuously.
“One must remember that political parties, unlike other mainstream voluntary organisations, consist of a complex gathering of voluntary workers whose inputs have in recent years been complemented by that of full-time contributors and part-timers. However, even these last terms are misleading for all contributors to the party are expected to assist, and actually do make efforts that are far in excess of their contributions.”
Missing receipts
In their report Ernst & Young listed a number of serious weaknesses in the cash donation collection system and shed light on the precarious financial state of One Productions, the MLP’s radio and television company.
As regards cash donations the auditors remarked that a number of receipt books were never returned. Ernst & Young also pointed out that the person in charge of the Fund Collection Office was responsible for the whole cash cycle, which was found out to have little if any checks and balances that would have ensured that all cash donations were actually making it to the MLP’s bank account.
The auditors added: “Due to frequent printing errors in the receipt books, we had recommended that someone checks the receipt books for any duplicate or missing receipts before utilisation. Cash collected is not being deposited intact on a daily basis.”
Unpaid taxes
Ernst & Young also stated that One Productions owed the social security department Lm280,000 in national insurance contributions and a further Lm58,000 to the VAT department.
The auditors warned that “failure of One Productions to settle dues in respect of social security contributions and other taxes would mean that the directors might be personally liable for their settlement.”
Given that the party has pledged its headquarters in Hamrun as collateral for bank loans taken by One Productions and other subsidiary companies, Ernst & Young cautioned the MLP executive to thoroughly monitor and review the operational and financial situation of the subsidiaries as “any defaults by these Companies will significantly impact the Party’s operations.”
And yet, despite the seriousness of the claims contained in the auditors’ report a deafening silence has descended on the Labour Party with high officials choosing not to answer pertinent questions on the issues raised by the auditors.
Last week, former secretary general Jimmy Magro would not comment on the issue, saying he no longer held a political post and Financial Secretary Tommy Dimech said that “action was taken all the time” without elaborating further.
kurt@newsworksltd.com
|
