Comment of the day
Posted by It All Stinks:
This evening I attended an information seminar on the Individual Investor Programme organised jointly by Henley & Partners and Identity Malta.
On the panel there were three people: Joe Vella Bonnici for Identity Malta – who didn’t introduce himself but just assumed we know who he is, and Hugh Morsehead and Chris Kalin for Henley & Partners. The relevant cabinet minister/s and the ‘specialist’ and ‘government consultant’ John Huber were conspicuously absent.
The very first statement that Vella Bonnici made was that “we are rushing things as much as we can”, an inelegant choice of verb that is disquieting not reassuring.
The tight schedule and the urgency with which they want to have the legislation passed through parliament was something that was mentioned on more than one occasion. This begs the question. Why?
Something like this should not be rushed through, because mistakes will be made and above all, because the matter should be discussed properly.
If the legislation is to be rushed through, it can only be because there is pressure from those who have been promised passports already, who might even have been promised them before Malta voted in March. It cannot be because the government is that desperate for cash.
For the time being let us put aside the elements of the programme itself – that no matter how it is described, it really has all the relevant elements of a programme which, crudely put, is designed to sell passports and not to attract persons to commit to a country and its economy. Let us focus instead on the effect that this has on Maltese professionals in the field.
Up until now it was not clear to me what role Henley had in this. Are they advisers to the government of Malta? Are they responsible for carrying out the due diligence process on all applicants? Or are they the promotors of the programme?
What is clear now is that they are all of that.
They are the exclusive concessionaire of the Individual Investor Programme. They handle the due diligence and are also the advisers to the regulator, Identity Malta. The multiple conflicts of interest could not be clearer.
They tried to fudge it by saying they are not the regulator. But come on, guys, don’t split hairs. You are not dealing with fools here, so don’t treat us that way.
It would have been somewhat acceptable had Henley been appointed as adviser to the government and also perhaps the firm to carry out the due diligence, or that they are the adviser to the government and that they can also ‘sell the programme’. But that they carry out all three crucial functions is another thing altogether. That they are the sole concessionaire, while and while also approving people as suitable for citizenship, beggars belief.
Effectively if any lawyer, accountant, financial adviser or similar wants to get involved in this, they have to work with and through Henley. In fact it was made very clear that any professional wanting to put forward a client for citizenship could do so only as an agent of Henley.
Henley even get to determine, together with Identity Malta, who the authorised agents will be.
So of course, Henley are “delighted”, as Morsehead put it. They have it all sewn up pretty neatly.
Does one blame them? Not really. The government has put them in the enviable position of pimping or hawking Maltese citizenship with all other professionals simply the pawns left to scrounge up whatever is left of the business and direct it Henley’s way anyway.
Moresehead told the audience that the world is a big place and Henley do not know everyone. Oh really? How big is the market for the purchase of passports?
Also, what client in his right mind will not go straight to Henley so as to be assured of the successful purchase of a passport?
Henley get everyone except those passport-applicant who have a strong relationship with other professionals already. And even then, Henley get a bite at the cherry.
Moresehead tried to justify Henley’s dominant position by emphasising how experienced they are in the field. He came across as quite patronising. One person in the audience made this point in a very polite way: that Maltese professionals are used to dealing with regulators and do so in various fields in financial services.
Sadly, the government got this wrong right at the start by permitting one firm to control the whole process, with inherent conflicts of interest.
Quite clearly, the government has decided that something which is, strictly speaking, a matter of public/government administration should be outsourced to one private firm. That may be very well but then that firm should not also be processing and presenting applications, more so in a monopoly situation.
Chris Kalin, who is soft spoken and comes across a lot better than his partner, attempted to justify this by saying that residence programmes have sometimes been wrongly marketed by promotors (which is true) and that the government wants to control how this citizenship programme is promoted – that is, by not promoting it at all.
But then in the same breath he said that Henley are organising a conference on this in Miami, with the Prime Minister as the key-note speaker, and also a party in London together with identity Malta. So much for not promoting it.
This is where the humming in the room started to get louder and Joe Vella Bonnici, chief of Identity Malta, literally lost it. He began to shout at one of the participants in a manner reminiscent of Mintoffian days. It was just the sort of gravitas expected of someone in his position.
As for the due diligence process, Moreshead claimed that his firm will have the best due diligence in the world and actually had the gall to say we should just take his word for it.
Well, it has to be better than that of government itself, which has permitted a person permanently blacklisted by the World Bank to be a consultant to Malta Enterprise and to the energy minister, while also consorting with the prime minister and his wife.
But does Moreshead actually expect us to believe that Henley will reject a client who is their very own applicant? That they will not give a positive recommendation to some of their clients?
In an attempt to try and show that there will still be work for others, Chris Kalin emphasised that Henley’s specialisation is purely citizenship. But then in a throw-away comment he admitted that Henley have a ‘small subsidiary’ that provides corporate services, going on to say they are not interested in that. Really?
If they are not interested in it, then why own and run it? Something tells me that this small subsidiary is set to become much bigger on the back of all the referrals that Henley will be getting, and what with Henley being privy to the details of everyone else’s clients.
There is so much wrong with this programme and the way it is being handled, it is not even funny. The possibility for abuse is enormous. Nor is there a level playing-field amongst professionals. The original remit from the government was flawed. It should never have issued any tender giving one firm the right to control the programme. It should never have had a programme clearly skewed towards selling passports, rather than to attracting investors who may then be permitted to apply for citizenship after proving themselves.
The control lies in the due diligence and the company doing the due diligence should under no circumstance be a company also offering the service. It is like being judge, jury and prosecutor all in one go.
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It seems that the government wants to enact all legislation in a rush while keeping details under wraps. Look what happened to the Civil Unions bill. The first reading on 30th September only contained the title of the bill. It was published 15 days later just before the second reading. The government is being very economical with the truth.
Economical with the truth is being generous. In most cases it is much closer to lying.
First reading of Bills in parliament is the title of the bill, but this is done concurrently with the publication of draft bill in Government Gazette.
And by not making our concerns heard, we are just letting them believe they are getting away with it.
Monopoly is the preferred tool of communism. The government is increasingly lowering its standards on everything, and it is no longer a laughing matter.
They think all of the Maltese population is made up of idiots.
The press is asleep and the people are silent!
Government commitment is not to good governance and transparency, or the protection of rights and the upholding of democracy.
It is in a rush to enact legislation to honour deals made prior to the election.
`pimps, thieves and scoundrels` in the Labour regime are acting with the undue haste of people who know their time is running out.
And cowboys…
Mintoffian tactics that will come back to haunt us after much damage to Malta’s reputation is done.
How long before the US re-imposes a visa requirement on Maltese citizens?
We can assume that Mama Michelle and her Spanish princesses, the Infantas of Castile, will go with Papa Joseph to Miami for their big ‘Malta is selling passports now’ launch.
Pamela Seychell must be getting her Florida Gator outfits ready.
Orlando, here they come.
https://www.henleyglobal.com/countries/malta/
They changed their address from Auberge D’Aragon, Valletta, to Aragon House, St. Julian’s.
Anybody thinks that the man in the street cares all about this?
Everybody will wake up when the new taxes start to bite.
Malta will be turned into a hive for corrupt individuals with cash for laundering and the need of an EU passport.
Then Malta will sink into the abyss of corruption with investment going elsewhere and unemployment becoming the news on Xarabank.
Do you think that they will really wake up when the new taxes start to bite? I’m sorry but I do not have that much faith in the people who voted PL, including the switchers.
What they will do is justify their choice by saying that the new taxes are necessary because of the debts PN had laden Malta with. At the moment they are all rubbishing concerns about this citizenship sale initiative by saying that (1) other countries do it and (2) and even more deceptively by equating it to the Permanent Residence scheme.
People who visit sites like this are those who, like me, were not taken in by Labour. Those who were are not about to easily admit that they were wrong.
All this rush, I suppose because the people “already” on the list are now getting impatient.
“The government got this wrong right at the start by permitting one firm to control the whole process, with inherent conflicts of interest.”
No. The government got this wrong. Full stop.
This isn’t an individual investor programme. This is an underhanded way of rewarding Labour’s pre-electoral financial backers.
Was the sale of Maltese citizenship on Labour’s roadmap?
Never seen the roadmap, so I don’t know.
But I cannot see it in their Electoral Manifesto 2013, of which I do have a copy.
In my view, the Labour government has no right to implement this scheme. Full stop.
If the Maltese had to go through one referendum and at least one general election (the majority had already voted for EU membership in 1987, 1992 and 1998) for us Maltese to obtain EU citizenship and an EU passport, then why is the Labour government selling Maltese and EU citizenship and passports without first consulting with the people of Malta via a referendum?
Maltese citizenship must not be sold unless the government has a mandate from the people.
Henley & co is selling our family name here, and we don’t even get to know to whom Henley & co has sold it.
The orders were placed months ago. Henley & Partners are the pizza delivery men.
“It should never have had a programme clearly skewed towards selling passports, rather than to attracting investors who may then be permitted to apply for citizenship after proving themselves.”
A passports-for-sale programme and super-spy agency designed to accommodate Labour’s pre-electoral backers, can never be anything else.
That’s just what it is all about.
Your comments hit the nail directly on the head La Redoute. But the men in the street is not informed through the media and so everything goes on and on.
News reporting is inadequate, but the complacency the proverbial man in the street is no one’s fault but his own.
There more holes in this Individual Investor Programme than in a slab of Emmenthal on the deli counter. And if you have to outsource this programme, you definitely do not farm out “due diligence”.
What do you expect from people who do not know what due diligence is, even if it bit them in the ass as in Nair’s World Bank blacklisting. Rank amateurs and very dangerous.
The first thought that comes to mind is that “rushing” is justified because, in any case, the consultation is a sham and all that is pending is dotting the “i” and crossing the “t” and ensuring that the Bill is in comprehensible English and Maltese unlike the notices from the Police Department.
Henley will argue that they will not actually be approving the applicants but that Identity Malta will do so after conducting their own due diligence (Interpol, police certificates and the like).
The point remains though, that as things stand it is only Henley who will be able to make a recommendation to Identity Malta. No other professional can do so. All others are reduced to being mere commission agents. How disrespectful to their professions.
As for the Individual Investor Programme itself, it is quite obvious that Henley worked on the government with the whole thing, designed the programme, and then ‘won the tender’ to run it.
It looks to me that the programme was designed with Henley’s actual and prospective clients in mind rather than what is good for Malta. The programme is passport-buyer-oriented, not Malta-oriented, even though it is Malta who should benefit the most in a situation like this.
It also serves the Labour Party well as in this way it will have more dosh to give away to the likes of Sai Mizzi et al. It might also be a good way of collecting more donations: making a donation to the Labour Party could oil your application for a Maltese passport. Wasn’t it something like that that brought Peter Mandelson down when Tony Blair was prime minister of Britain? http://news.bbc.co.uk/2/hi/uk_news/politics/1134392.stm The donation wasn’t even to the Labour Party, but to the Millennium Dome government project, and so could have been classified as ‘investment’ under this government’s plans.
It would have been far more respectable had the prospective applicant been requested to invest say Eur1 million in local industry and thus create jobs thereby generating more wealth and spreading it around – and only after that being permitted to APPLY for citizenship with no guarantee of getting it. That’s the way it is done elsewhere, in more civilised and self-respecting jurisdictions.
Such an investment in the economy would perhaps justify the granting of citizenship and I would suspect be more interesting to the type of people Malta should want to attract. Instead, what we are going to have is people paying money into a big, black hole for the government to play with.
If Identity Malta are going to be doing their own due diligence anyway, surely it would have been a small task to train them to do the type of due diligence that Henley will be doing through the SPV that they are setting up.
You’re missing two essential points:
1. Identity Malta should never have been created, which is why it was set up in such an underhanded manner;
2. It is answerable to a minister whose own judgement is dubious and who serves under a prime minister that thinks due diligence is a malleable concept.
Here is another situation where I believe there is another important conflict of interest. Someone should look into this also.
On 8 January 2013, the Malta Labour Party presented its ‘energy plans’ to the media.
There are strong indicators that suggest that the MLP’s presentation was based on information about a Floating Storage and Regasification Unit (FSRU), becuase the costs of an on-shore plant cannot start to compare. I posted a comment about this under your post of 16 October on “Unmitigated arrogance…”
There are two issues here:
1. If that was the case, and there are strong indicators that this was the case, then, when in government, the MLP should have designed and issued a tender with an FSRU specification clearly included as part of the plans attached to the tender, and should have sought tenders on that basis, so that only consortia proposing an FSRU would apply, and they apply with that information beforehand.
2. In the January presentation, the MLP brought over DNV KEMA as their ‘independent advisors.’ At some points, MLP
front men even referred to DNV-KEMA’s advise as ‘audit.’
DNV-KEMA is a merger under the DNV name, which took place in 2011, when DNV acquired a majority shareholding in KEMA. KEMA was an independent, energy consultancy firm based in Holland.
On its part, DNV is a bigger ‘umbrella’ business, originating from Norway. It is one of the world’s top three classification organisations in the shipping business.
In September 2013, DNV has announced regulatory approval of another merger, with GL, creating DNV GL within its umbrella.
According to information on the internet, DNV is in the business of classification of FSRUs (and LNG carriers, besides other ships).
http://www.igu.org/html/wgc2009/papers/docs/wgcFinal00775.pdf
See page 12:
“FSRU classification – Setting new industry standards
It is the role of international organisations such as DNV to provide classification systems that can be used to demonstrate that a given ship, plant or structure complies with defined rules and standards, especially those concerning safety. However, these FSRU conversion projects were the first of their kind, and when they started there were no specific rules and standards to refer to; there was no classification notation for FSRUs.”
But see also later, page 13:
“DNV was heavily involved in the conversions of the Golar Sprit and the Golar Winter. Partly as a result, DNV released Classification Notes for Regasification Vessels No. 61.3 in June 2008. These define classification notations REGAS-1 and REGAS-2 and are intended to supplement the well-established DNV rules and standards for LNG gas carriers.
Unsurprisingly, given the level of cooperation between Golar and DNV, these notations strongly reflect the approach taken during the two FSRU conversion projects.”
This means that DNV were involved in the classification of the first LNG-FSRU conversions made by Golar LNG, a supplier of LNG-FSRU conversions.
If DNV-KEMA were working on the costings of using an FSRU, they should have declared their interest in the fledgling FSRU business and its certification.
If somehow the Delimara FSRU is to be sought from Golar, or Drydocks World (which was involved in conversions for Golar, the conflict is even bigger and more evident.
Joseph has turned Malta into a financial whore house – pay up and you’re in.
There must be a lot of euphoria in the financial sector this morning
What happens to my 650,000 euros passport if the PM of Malta pulls out of the EU?
The only advantage of the mad scheme is that it will put a gun to the PM’s head over EU membership, if only for a while.
Something else: Henley & Partners informed those of us at the meeting that there will be three possible outcomes for the due diligence process: Yes/No/Maybe.
It is ultimately the Minister who will have the discretion to determine whether that Maybe is a Yes or a No.
That would be the minister who thinks nothing of keeping 500,000Euros in cash at home. Enough said.
Which means that Henley & Partners are being given the right to the final say-so on whether somebody is allowed to buy a Maltese passport or not. Or not quite – because the ‘minister’ has full discretionary powers.
Which means that a matter of public/government administration HAS been fully outsourced to one private firm, barring the few cases of a maybe. Let’s not go into the issue that citizenship is of the essence of public administration and that outsourcing the process of granting citizenship should be plain unthinkable.
Toni Abela is about to get his Labour supermarket, after all, and it’s selling Maltese passports.
This must be the mother of all U-turns! From Malta Taghna Lkoll to Malta Ghal Bejh.
It’s not a U-turn.
http://www.scribd.com/doc/128130324/Joseph-Muscat-says-he-signed-an-agreement-with-China-on-Malta-s-behalf-it-Torca-18APR2010
You don’t always believe advertising. Why did you believe Joseph Muscat’s?
The Opposition takes the right stand:
http://www.timesofmalta.com/articles/view/20131019/local/pn-against-cash-for-citizenship-except-for-certain-circumstances.491030#.UmKLUjIaySM
Rightly they declared that they will not be complicit in rendering Malta to he level of a prostitute. Where are the Mintoffians and the KMB”s. Having yelled to high-heavens the so called ‘helsien’ from the ‘il-barrani’ are they now going to allow a set of new un-named ‘barranin’ with a thick wallet of perhaps shadily gained money buy back a piece of Malta.
The opposition takes the right stand.
http://www.timesofmalta.com/articles/view/20131019/local/pn-against-cash-for-citizenship-except-for-certain-circumstances.491030#.UmKLUjIaySM
Giving a monopoly to a private firm to receive applications, vet them, and make recommendations for the award of Maltese passport/citizenship, is a dereliction of responsibility by the Maltese government that cannot ever be justified.
This report on the information seminar held at the Hotel Excelsior only goes to confirm this.
Rushing such a far reaching initiative shows a great lack of seriousness on the part of the promoters.
Henley and Partners should be ashamed to be allowed to be used by Joseph Muscat to give Maltese citizenship to pre-selected friends. Is there one decent journalist who can face Henley with the appropriate questions?
Giraffa.
You have a mobile phone, access to the internet, and an office address.
Why are they rushing it through? It reeks of people pushing behind the scenes, either because they want to escape their country for one reason or another or they want to get their foot into Europe for other business or illicit reasons.
I wonder who these individuals are?