NEWS | Sunday, 12 October 2008


Does a conflict of interest exist in Tecom’s chief executive being also the chairman of Malta’s sensitive, IT agency? By Matthew Vella

Claudio Grech, the former right-hand man of Minister Austin Gatt and today the chairman of the Malta IT Agency (MITA) and the government’s sensitive internal IT agency MITTS Ltd, has rebutted suggestions that his role as CEO of Smart City Malta could lead to a conflict of interest.
With one hand on what is set to be Malta’s largest-ever infrastructural project, and the other on the government’s most sensitive agency, it is no wonder why Grech’s appointment open him up to such accusations.
“The fact that the former head of secretariat to Austin Gatt is the CEO of Smart City Malta and now also MITTS chairman, could lead to a potential conflict of interest for the man who is formulating Malta’s IT policy,” Labour MP Chris Cardona told MaltaToday, pointing out the possible conflict when Grech was appointed chairman of MITTS, which is under the leadership of Austin Gatt’s ministry.
MITTS will be absorbed into the Malta Information Technology Agency with Grech as its chairman, once parliament passes into law the Public Administration Bill.
In his role as CEO of Smart City Malta, the futuristic internet city financed by Dubai’s Tecom Investments, Claudio Grech manages a private interest but at the same time he is also the chairman of MITTS – if not the heart and soul of government, at least its central nervous system.
Grech himself led the government team in negotiations with Tecom between 2005 and 2007, before being employed as Smart City Malta chief executive this year.
As the non-executive chairman of MITA, Grech will also be in the driving seat of Malta’s information and communications technology policy, while at the same time managing Tecom’s interests in Smart City.
Or else it will be Tecom’s development that will be directly influencing Malta’s IT policy.
He will also have to adhere to government ethical guidelines which bind him to maintain any confidential information he acquired as a public official in strict confidence; and ensure his political interests do not “compromise the conduct and public perception” of his duties.
Gatt’s own ministry guidelines lay down that directors should not be directly employed by customers, if it might influence or be perceived to influence in any way the conduct of the business of the entity – in which case, it is debatable whether Smart City is ultimately a “customer” of the country’s IT policy.
Although the two positions are clearly at loggerheads, in which private and public interests appear to be mixed up, the Prime Minister has declared Grech has no conflict.
“By definition a non-executive chairmanship is a part-time position and it is normal and desirable for government to seek professional experts with relevant competencies to add value to these positions in the interest or the organisation they are asked to lead and in the national interest,” a spokesperson said.
“Mr Grech’s full-time position at Smart City Malta is not in and of itself a conflict of interest and does not present itself as an a priori disqualification.”
In comments to MaltaToday, Claudio Grech said the government had a very clear code of ethics governing people in his position, “to which I strictly and scrupulously adhere. If you have one case of conflict, please mention it and I will reply in detail – the rest is all hypothetical.”

Conflict of interest
Hypothetical as it may be, Grech’s appointment has not failed to raise eyebrows in both political and industry circles.
Labour MP Chris Cardona first highlighted the potential conflict in July, when Grech was appointed chairman of MITTS.
“Without any prejudice for Mr Grech’s capability, Labour sustains that such a role could lead to a conflict of interest between the management of a private project and that of a government agency… the implementation of a political strategy for ICT should not be confined to just one project, but spread over the entire country and involve all interested partners.”
Following his statement, Austin Gatt’s ministry issued its own statement to seemingly point out its “satisfaction that the MLP sees no conflict of interest in the appointment of the chief executive of Smart City Malta, as chairman of MITA.”
The statement went further by underlining the ministry’s own self-assurance that Grech’s appointment was subject to “explicit guidelines” in cases of conflict of interest, which the ministry issued last May for government appointees to directorships and boards.
“The ministry has every confidence in that Mr Grech will respect these guidelines throughout his tenure of MITA.”
The guidelines define a conflict of interest as “any conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities.”
They further state that “actual, perceived or potential conflicts of interests need to be adequately managed in a coherent framework promoting openness and transparency.”
However the same guidelines say they are not “a deterrent for competent persons to take up public office altogether. These guidelines aim to strike a balance between the competence of the appointee, the public interest and the general perception.”

Right-hand man
Claudio Grech started his political career in 1999 after spending three years carrying out human resources management for government. He joined Austin Gatt in the justice ministry as a policy coordinator for local government.
In 2000 he was allocated the responsibility of implementing electronic policy, and a year later he was appointed secretary to the e-Malta Commission, as well as programme director of the e-Government programme.
He was retained by Austin Gatt back in 2001 when he faced criminal court procedures over the falsification of a police identity card.
He then appeared before the Public Service Commission, ironically defended by Anglu Farrugia (Labour deputy leader), over his candidature for the police exams, in which he was acquitted of any charges.
In 2003 he joined Austin Gatt as head of his secretariat, where he coordinated government policy for all public investments as chairman of Malta Government Technology Investments Ltd.
Between 2005 and 2007, he led the government’s team in the negotiations for Smart City with Tecom – who are his employers today.
Government holds a 10% stake in Smart City Malta.


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