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News • July 11 2004

Dalli’s resignation – the aftermath

Matthew Vella analyses John Dalli’s resignation and its implications on the government, the Nationalist Party, the country and the key protagonists of this long-drawn saga.

Joe Saliba, Secretary-General of the PN, talks about trust and friendship now that the barrage of allegations and accusations against John Dalli have achieved fruition with his resignation as minister. But sombre moods fill the air both within and outside the PN’s Stamperija.
John Dalli, the architect behind Malta’s economic reforms in the 90s, and a runner-up to the PN leadership following a bitter letdown, is a man who feels hurt at the circumstances which, rightly or wrongly, have jeopardised his immediate political career.
The keyword at Pietà is serenity. In comments given to l-orizzont this week, on the eve of the PN’s first executive committee meeting after the resignation, Joe Saliba said there will be no discussion on Dalli’s furtive allusion to in-house subversion at Pietà: “There is no need for John Dalli to explain himself in front of the executive, because we trust each other like friends. We shall not discuss John Dalli’s resignation, not even what John Dalli said on television.”
Raw nerve from Joe Saliba, a man who is facing attacks from different quarters, drawing opprobrium for the electoral loss, and also internal leaks: on the day of the first PN executive meeting, l-orizzont published accounts showing an alleged Lm4 million in debts for the party, a timely forewarning that spells unhappiness for Saliba – even if the figure has since been denied.
John Dalli’s appearance on Bondìplus on that fateful Tuesday when only the facts spoke the loudest, seemed to have had reached the apex of political accusations, drowning into insignificance both Leo Brincat’s political mongering at the behest of the Labour Party, and Dalli’s attempt to justify what seemed to be two grave cases of unethical behaviour.
The first was that he was at the centre of an attempt to woo over the Islamic Republic of Iran Shipping Lines (IRISL) in his position as Finance Minister to the newly-formed Gauci Borda Shipping, whose director is husband to Dalli’s daughter, and who along with her other sister is the director of Maraner Holdings, which has a majority shareholding in Gauci Borda shipping; and that a substantial Lm80,000 worth of airline tickets had been purchased for the Foreign Ministry from Tourist Resources Ltd, a shareholder in Maraner Holdings.
The accusations, covering a period of three months over which Dalli had lost the election to the PN leadership, and was then appointed Foreign Minister soon after, reached a head with the Bondìplus programme.
Prior to the end of the broadcast, in which an irrefutable array of visual evidence was drawn up, Dalli said he was not excluding “anything” when asked by Bondì whether a Nationalist Party frame-up was at hand in the midst of the allegations which had been primarily levelled by Labour leader Alfred Sant.
At that stage, it was all too clear that John Dalli was in distress and felt threatened, even if he was to spare himself a last gasp of the bullishness which has characterised him as a politician. Four days later, on Saturday, he presented his letter of resignation to Lawrence Gonzi, complete with his own version of events, exculpating himself from blame.

Ignored accusations
Dalli has now returned to the backbenches following his resignation, for years having led Malta’s economic reform through the pitfalls of the burgeoning budgetary deficit and the first waves of privatisation.
His first act of defiance may have been his immediate presence in the parliamentary benches, a sign that he is not letting the circumstances overcome him and that presumably, his loyalty to the party is ‘still there.’ But surely, it must have been quite surreal for him having to return to parliamentary business as a backbencher after 15 years as a top minister.
As the facts of the matter unfold, the aftermath of the Dalli resignation is clearly showing the disarray that is apparent amongst the top PN echelons and the caustic scenario of the rivalry that exists without Eddie Fenech Adami’s paternal and unifying role as party leader.

Proof of this would be the fact that the PN did little to mitigate the suspicions Dalli aroused. Similar statements from Dalli, a senior minister, would have surely raised the alarm bells, for the party and the press when Fenech Adami was Prime Minister. How could, for example, Lawrence Gonzi and Joe Saliba remain silent when John Dalli said he was “not excluding anything,” not even a Party sabotage, as the origins of the attacks on him? How did they remain mum with Dalli stating ominously that he was not about to be “turned into a scapegoat as had happened in 1996,” with reference to the PN’s electoral debacle following the introduction of the much-maligned VAT?
At this point, the fact that the PN had failed to provide shelter for Dalli showed that relations in the party could not have been good at all, and Dalli’s parting-shot, a statement devoid of all style and elegance for a minister, carried with it the stain of strained relationships carried forward from his bitter trouncing at the PN leadership elections, and which had all the gutsy airs of a minister on auto-pilot – an indication that the writing was on the wall for all sides.
But it was also an act of defiance from Dalli, a minister never known for modesty. Even when faced with the evidence and shown that he was visibly under suspicion, he still clambered for some form of justification, even by alleging that he was being turned into a scapegoat, a factor that irked many who expect high moral standards from ministers. Dalli’s defiance was also in evidence when faced with a Prime Minister who, instead of undertaking automatic defence or disfavour towards a suspected minister as former leader Fenech Adami would have done, took the matter up in a personal inquiry which only served to pile up the pressure the more time passed.
By considering himself as being taken to the slaughter, Dalli showed an incredible sense of chutzpah when all the evidence had placed him in a dubious position. As he tried hard to exonerate himself from the charges - by saying that his relatives have the same rights as any other citizen to enter into business - the former minister showed an incredible lack of judgement in thinking the rest of the populace was agreeing with this justification.

Spinning weak
On Sunday morning, Lawrence Gonzi appeared on The Sunday Times in an interview which was primarily intended to shut the last door on this crisis so early in his troubled leadership. The interview was conducted by Steve Mallia, who himself was the journalist to break the story that Dalli’s ministry had spent over Lm80,000 in air tickets purchased from Tourist Resources Ltd.
The attempt to clearly exonerate any form of suspicion centering around the John Dalli resignation was somewhat brash, given that the resignation was barely twenty-four hours fresh, and that the day before Gonzi himself had not even conceded journalists a press conference to answer questions about the resignation. It showed how hurried the Gonzi camp was to close this issue once and for all.
A clear indication was that Richard Cachia Caruana’s sojourn in Brussels meant the OPM lacked serious PR skills and a good spin-doctor. Elsewhere in Castille, Gonzi’s men attempted to have their master come out unscathed by the impression that the dilly-dallying on the issue of resignation could have said much about our Prime Minister, just 100 days into his leadership.
But it had become apparent that Lawrence Gonzi had found himself in a conundrum and dealing with a rival’s resignation had taken its toll. For weeks, many questioned why the decision to have John Dalli resign was taking long.
The Sunday Times’ Roamer commented that Gonzi waited so as not to have his decision tainted by Alfred Sant’s hankering for resignation. However, at the expense of appearing weak, it looked as if Gonzi was waiting until the heat got to Dalli when the public started asking more and more about the outcome of the PM’s own inquiry. He certainly would not have wanted his approach to be rash, given that Dalli was his main rival in the leadership campaign.
When the resignation came through however, Gonzi failed to put his decisive stamp on it: in his reply to Dalli’s resignation letter, Gonzi said that from information he had gathered on the IRISL case, it did not seem that the allegations had been substantiated; in the case of Tourist Resources Ltd, Gonzi only said that “the facts are there,” as had been explained by Dalli himself in his resignation letter, such that this might have made his position untenable.
Unfortunately, Gonzi has not made his reasons for Dalli’s resignation clear enough. Why did he accept Dalli’s resignation if he had found nothing conclusive in the IRISL case? Why has he not stated that Dalli’s position in the whole saga was unethical and unsuitable for a minister? Never in his statements, not even in his latest media briefing, was there any mention that Dalli had acted unethically in the case of Tourist Resources Ltd, a fact that has irked many who expected a clear judgement on the comportment of Dalli as minister. Instead of addressing the apparent ethical breaches that emerged from the case, Gonzi’s appraisal of the IRISL case turned out to be a whitewash, which as Sant said, insulted the intelligence of the people.
For Gonzi, this was an issue “of what is in the best interest of the country,” which at best is a statement that reflects his synthetic pragmatism and the inability to acknowledge what is black on white.
Unfortunately Gonzi did not establish himself as the kind of decision-maker who would have had Dalli rightly judged on what is known, since it was Gonzi himself who took it upon himself to investigate the facts and act as arbiter. Of course, in a positive vein, what Gonzi did set is a precedent, and a public one which has shown people that anyone caught in a breach of ethics, is bound to be shown the way out. At least, that is what the public will start to expect from now on.

Dalli accuses
In the version of events annexed to his letter of resignation, Dalli wrote to Gonzi saying he had expressed his apprehension to Gonzi when he was “first informed of the attack on The Times and PBS on June 9, three days before the elections,” he wrote in reference to the story which The Times broke out on the fact that Dalli’s ministry had spent over Lm80,000 in airline tickets from Tourist Resources Ltd.

“As I told you in my e-mail of June 10, my concern is the origin of the attack. The main attack took place on June 9, three days before the EU elections through the publication of a story in The Times of Malta.
“Wonder of wonders, PBS departed from its normal practice, and not only covered the same story but practically read out The Times report,” Dalli wrote, indicting PBS journalist Ivan Camilleri as having “kept up the attack on various occasions” in a press conference with Gonzi and his talk show Sebatijiem.
Dalli’s accusations were of course, a clear shot aimed at the Office of the Prime Minister, whose communications co-ordinator Alan Camilleri, is brother to the PBS journalist. Back in February, during the PN leadership election, Ivan Camilleri was quick on the draw to query Gonzi about John Dalli’s electoral brochure, a collection of ideas on the country and the party designed to add colour to his campaign. And Gonzi was quick to answer that the new Prime Minister was not going to be carrying a new electoral programme. At John Dalli’s press conference later that day, Camilleri was jibed at by The Malta Independent on Sunday’s editor Noel Grima as ‘ICC,’ a taunt replicating Richard Cachia Caruana’s abbreviated appellation.
Although Camilleri’s journalistic independence may have come under attack with the accusation made by Dalli, the former minister did not spare a sentence in alluding to the fact that the nexus enjoyed by PBS and the independent press with Castille, could have aided in neutralising him this time round.
But the facts against John Dalli however did carry veracity, even if this could have also been a carefully placed attack to pile up the pressure. At least, they showed a pattern of constant attachment to Tourist Resources Ltd, which emerged as having sold thousands of Liri in airline tickets to John Dalli’s ministries, both finance and foreign. Dalli believes his ministry sought value for money. If he wanted to be above suspicion, he could have been wiser and steered away from a company with close ties to him and his family.

Bleak prospects
On the Saturday morning of the resignation, a hurried swearing-in ceremony for Michael Frendo was announced an hour before Dalli’s resignation letter was published by the Department of Information at 1.28 pm. Frendo’s return to centre-stage politics, after years of kow-towing at the lower rungs of PN royalty following the loss of ministerial responsibilities when he found himself at the centre of the alleged bus ticketing scandal, proved to be a virtuous lesson in political drudgery.
Dalli in fact leaves a cabinet weakened by his departure, given that for all intents and purposes, he represented a different kind of minister, one whose finance portfolio always demanded vital decision-making to alleviate the omnipresent budgetary deficit.
It is Richard Cachia Caruana who benefits from this move, which finds the Permanent Representative to the EU now dealing with Michael Frendo. How far this may develop into an amicable relationship is yet to be established: Cachia Caruana always reported directly to Lawrence Gonzi and not to John Dalli.
Dalli’s other portfolio of investment promotion goes to Austin Gatt, who as Minister for Investment and IT, has proved himself to be a very capable doer and one who has built himself a reputation for his particular flair. Gatt emerges stronger from this whole experience as the one cabinet member who has proved himself constantly, and slowly but surely, the Gonzi government is becoming very dependant on him.
The loss of Dalli effectively means the Nationalist Government now lacks an experienced minister versed in economics and finance, especially since he will not be chairing the cabinet’s inter-ministerial committee on competitiveness.
Whilst having crowned important successes, such as the shift to indirect taxation through VAT, the creation of the Tax Compliance Unit, turning Malta into a financial services centre, coupled with the drive towards privatisation, Dalli enjoyed high regard by business circles for taking the bull by the horns, but doubtless his persona has also been darkened by the allegations championed by the Labour Party.
What now for a PN whose cracks have become all too visible? Dalli’s departure means a weaker cabinet; his political experience cannot be denied. Questions centre around the loyalty which Dalli will have reserved for the remainder of his career within the party: at the leadership elections, Dalli commanded the support of over 25 per cent of the PN’s councillors.
For Dalli’s resignation is no comeuppance for the rest of the PN’s sins. Resignations from the PN government are not common; more so, this government’s history has always been chequered with allegations of abuse of power, arrogance, and recurrent episodes of scandals, corruption and misconduct.
Dogged by economic crisis, electoral dissatisfaction and a failure to establish strong unity at party level, the Dalli resignation is symptomatic of the political tribulations the PN faces in its sixteenth year of governance.




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