Editorial | Sunday, 12 April 2009

An explanation required

The police investigation into what is believed to be massive fraud at the VAT department has led to the suspension of some six employees, after a three-month investigation that so far has been summed up by government in a curt statement: that “it not tolerate any abuse and expects every allegation is investigated and all necessary action taken according to law.”
When corruption tends to be as insidious as on this occasion, where the alleged collusion of business and minor public servants leads to fraud on a massive scale, one is led to surmise on the extent of corruption inside the entire Maltese public sector.
The latest annual report by the National Auditor suggests that some €1.1 billion in income tax, VAT and other taxes and various licence fees remain uncollected by the respective government departments. This alone is an indictment on the operations of the respective authorities – but the hidden aspect to this fact is how much of this uncollected sum is already compromised by corrupt practices. How far is corruption in Malta endangering the public coffers and our national bureaucracy? One can only wonder.
As we have already seen in the case of the bribery scandal at the Malta Maritime Authority, which revealed over 800 cases of licences issued against bribes, corruption tends to be a lingering facet of Maltese society. In the same year we also saw the invalidity pensions scandal, involving the assistant private secretary of former health minister Louis Deguara. It seems we have grown accustomed to the reality of corruption being an actual possibility, rather than just a rare aberration of our society.
And this is not just popular speculation. When Lawrence Gonzi announced in the last general election that the reform of the Malta Environment and Planning Authority would pass under his mandate, he was answering to a slew of allegations of corruption in the way permits are awarded by MEPA boards.
While MEPA reform is still pending, nothing so far seems to reassure the general public that corruption is not taking place in other government authorities and departments. The attitude that corruption tends to be ‘a fact of life’ is a serious and worrying aspect of Maltese society. It is an expression of mistrust in the bureaucracy, and an acceptance of such an insalubrious practice that only benefits a handful of criminals at the expense of the rest of society.
We don’t yet know how long the wrongdoings inside the VAT department had been taking place for. One would think the audit trails in the department should have rung the alarm bells. Finance minister Tonio Fenech was informed of what was happening in December and a police investigation has resulted in arrests three months later.
The Commissioner of VAT claims he instigated investigations in the first place, although press reports suggest a businessman brought the case to light to the finance minister. Why the public should not be explained as to how the alleged fraud might have taken place, and how the VAT department acted upon realising, boggles the mind.
The Prime Minister has been equally economical on his stand on the entire matter: asked whether any resignations should ensue, Gonzi said he will not influence the police investigations with any statement. Surely, this is not enough, let alone acceptable. The law-abiding public duly pays its taxes and is repelled by tax evasion of any kind. The least it should be granted is a thorough explanation of how the VAT department was compromised by a network of bent civil servants and what steps it is taking to strengthen action against any attempt at corruption. The Commissioner of VAT himself should have offered his resignation – if the finance minister believed otherwise, then it should be the government to tell the public exactly why it feels the Commissioner should not resign.
Some things, it seems, do not change. The perception of corruption only serves to damage government; the Opposition made a meal of this perception in the last general elections. With corruption now inside the VAT department, there is little doubt that – coupled with the cases at the maritime and transport authorities – the perception in people’s minds that corruption in this country is rife, has been reinforced.
The Prime Minister simply cannot take a back seat on this incident. Brushing off this matter as yet ‘another’ police investigation, almost giving the impression that this is just a minor mishap inside a government department, risks confirming a public opinion that government is not fully committed to fighting corruption.
Even more importantly, how will the government address the need for the public to regain their trust in the administration and its bureaucracy? Will the prime minister explain why an investigation into corruption inside the VAT department took three months to achieve results; or whether he believes the finance minister should be held accountable for wrongdoings committed in his department? Is this government ready to accept that political accountability means assuming responsibility when things are committed under one’s watch?
The longer these questions take to be answered, the more the government will lose a battle to regain public trust in its administration.

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