All over bar the shouting
Labour’s delegates have voted against widening the leadership election to take in party members. Only the naïve, or those who have scant understanding of human nature, would be surprised. This is not to say that those who tried to push the vote through are either of those things, but at this stage, I really don’t know what they were thinking.
What we have here is a situation in which a select group of people with decision-making powers, which they safeguard zealously, have been asked to vote on sharing those powers with another 19,000 people. And of course, they used that vote to deliver a resounding No. No, we don’t want to share our toys. No, because being one of the select few who can determine the future of the Labour Party and thence, of the country, gives us a sense of importance. No, because we won’t feel that important if we’re one of 20,000 rather than one of 900. No, because you insulted us by saying that you don’t trust us to make the right choice. No, no, and no again.
Look at it clinically, and you’ll see that asking people to vote to share their powers and privileges is bound to get a negative result. From birth, people don’t like to share. The average toddler would rather see his toy car confiscated than be forced to share it with a little friend. It goes on through the different stages of life. That’s why the biblical story of Solomon threatening to divide the baby in half is so potent. That’s what it’s all about.
So 165 party delegates voted to share and 620 voted not to share. Some commentators have said that this is because they want to ensure that Joseph Muscat will become leader, and widening the electoral base to party members might bring in George Abela instead. I don’t think so. It’s a whole lot more primeval than that. The delegates are protecting their own interests and privileges. That’s all.
Somewhere in the course of the evening, I received a text message from a journalist friend there in the Labour arena where the big debate was going on: “I wish you were here. I feel like I’m in a theatre with a stand-up comedy act every 10 minutes.” Well, I didn’t wish I was there because my sense of humour tends to evaporate in these situations. I would have been aware every step of the way that this was how our potential prime minister was being chosen. Labour councillor Michael Cohen spoke to great applause. The party couldn’t possibly organise an election among 19,000 people in just 27 days, he said. I tend to agree with him there, given that the party couldn’t organise an election campaign or manifesto for an election for which it had had at least five years’ notice.
Somebody called Joe Fsadni stood up to say that delegates should vote against the motion lest they seem to be washing their hands of the responsibility for electing a decent leader, “like Pontius Pilate did with Jesus Christ.” Oh, for heaven’s sake. Lots of loud muttering later, they gave a standing ovation to the absent Alfred Sant, he who led them onwards and upwards to nothing and took 16 years to do it. But then, they were bound to applaud their own choice. The strongest argument against allowing delegates to choose a party leader is the reality of Sant, but when people are confronted with the stupidity of their own choices, they dig their heels in and become defensive.
The new Labour MP Marlene Pullicino put forward the motion in favour of widening the electoral base. The tone of her speech revealed that for the best part of the last 20 years she supported the Nationalist Party, switching to Labour only after the EU membership issue was decided (she voted in favour). By then, her marriage to Nationalist MP Jeffrey Pullicino Orlando had collapsed and she had set up home with another man, which fact has provoked a cynical response of religious inconsistency to her protestations, during an interview, that she will vote against divorce because she is a Catholic. Dr Pullicino revealed that she doesn’t really understand the mindset of a party she joined as a fairly recent convert. She still thinks like a Nationalist.
“When were Laburisti ever scared of change?” she asked her audience. Well, I’m sorry, but that would be for most of the last 30 years or so. The Labour Party has morphed into the most conservative political grouping in the country, beating the Nationalist Party which now remains conservative only in terms of conformity to the dominant religion, which is bad enough.
“The aim is to have a strong leader who will take us to victory and push the Nationalists out of government,” Dr Pullicino said. Ah, but here’s the thing. Her idea of a strong leader is the Nationalist idea of a strong leader, which is why she thinks that George Abela is the obvious choice by far, as I and thousands of others who are not Laburisti do. Dr Pullicino is thinking like a Nationalist – in other words, she is making an intelligent and pragmatic decision as to who is most likely to pull in the floaters and the doubters – and not like a Laburista iffissata, who doesn’t understand how The Others think. Marlene Pullicino knows exactly how The Others think, because she was one of them for a long time. “Use your minds and not your hearts,” she enjoined her audience – uselessly, as it turns out, because it all depends on what kind of minds we’re talking about here.
The resounding defeat of that motion, which is now linked in the public and party mind with George Abela – indeed, Dr Pullicino is one of his champions – tells us that Abela, like the motion, will be resoundingly defeated too. You can argue that he put himself to the vote before actually putting himself to the vote. What we had here was a test-run. The delegates were put out by his motion and they are put out by him.
Abela took a big risk with this one, but it doesn’t seem to have been a calculated risk. He didn’t stand any chance of pushing his motion through because people don’t vote to limit their powers and privileges, but to increase them or to stop them being shared or restricted. By pushing for this motion, he alienated the delegates by more or less saying that he doesn’t have confidence in their judgement. This means that they’re not exactly going to trip over themselves to vote for him now, no matter how hard he campaigns. So insisting on widening the electoral base to members never had the slightest chance of getting him that wider electorate he needed, and at the same time, it lost him the only electorate he was ever going to have.
Joseph Muscat can smirk all the way to 5 June, and the rest of us had better become accustomed to the sight of that self-satisfied face because we’re going to be seeing lots more of Alfred Sant Mark II, with the same mannerisms, the same verbal tics, and the same shirt-cuffs hanging halfway down the hand because the arms are too short or the sleeves are too long, and there appear to be no bespoke shirt-makers in Brussels. No. The Labour Party doesn’t like change.
This article is published in The Malta Independent today.
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“The tone of her speech revealed that for the best part of the last 20 years she supported the Nationalist Party, switching to Labour only after the EU membership issue was decided (she voted in favour)”.
Just a small comment Daphne. Being from Zurrieq and distantly related in some way to Ms Pullicino, I can attest to her long Labour Family background. Nothing wrong in that. The fact that she spent so much time close to the PN means she has got round to the PN’s way of thinking. So at leat, the PN has managed to enlighten her and presumably the delegates who voted to change and were heavily defeated. I am not surprised at this. If George Abela wanted to be elected, he cound not have made a worse gaffe than this dry run. He is finished. And so are his champions. Its a pity. They were the seedlings of some hoped for change in Lejber, and that particular gestation has ended in tears. The only way forward for them is to build anew. May they have the courage to branch out into a new proper party, not a Labour one. The only socialist party in Malta is the PN. No doubt about that one. The PN has morphed from a conservative party into a party so centrist that its clse to becoming all things to all men. Without a doubt, Gonzi has made the party less cynical and more aware of the social problems that exist in Malta. That is a good thing. The PN, however, excels at regenerating itself sensibly, but I think we need a sea change now. There are individuals in the party who dont like the one size fits all attitude. The PN must give space to new individuals to come out, not just the Zaghzagh, and here i dont agree with Gonzi’s speech today, but people of our generation who have made a moderate success out of life, and now want to give.The time to conform to some ideology is gone. Our ideoplogy should be the constant search of the common good, through discussion and analyses. We cannot contuinue to be the slaves of the cream on top of our society. There is a large mass of people in the middle, who are feeling increasingly frustrated, beause all they see is a system that serves the individuals on top, and this makes them angry. Its a type of unhealthy capitalism that needs to go. I used to think that ENVY drives most people in Malta. I was wrong. Its the need to be more in control of our lives and our future which drives us. It drove droves to desert this island in order to emigrate. Its healthy. Any party that wants to govern for ever in Malta needs to do one thing. Give back people control over their lives, their money, their future. Frankly however, when i see the appointments on the boards of various entities, I have my very grave doubts.
Nahseb li d-decizjoni tad-delegati li ma jaqsmux il-poter mat-tesserati kienet l-ahhar musmar fit-tebut politiku ta’ Dr. George Abela. Jiddispjacini Gorg, sincerament – u aktar milli ghalik ghall-Partit Laburista u ghal Malta!
Daphne,
All things being equal, I think that this controversy about whether the delegates or party members should chose the next MLP leader is a storm in a teacup.
However I don’t believe that all things are equal at this stage.
Looking at Friday’s night vote in view of the opinion polls on Alfred Mifsud’s website and Malta Today, I think that MLP is running the risk of having a college of electors that are not represenative of the party.
During its fund raising, MLP used to say “il-ftit minghand il-hafna”; it may end up with “il-hafna minghand il-ftit”.
Let’s be reasonable, this was a very bold move towards further democratising the party statute. And the MLP statute is by most accounts very democratic as it gives the delegates – freely elected from all localities across the islands – a tremendous amount of power in the decision making process, where the signatures of just 10% are needed to introduce ANY motion (which could even be one of no confidence in the leadership). The PN can only dream of such a statute.
Oddly enough for some, it was Mintoff who intrduced this democratic vein through the party statute.
Having said that, it is not the statute alone that makes a party’s decision-making process fair and democratic, but also the spirit in which it is applied. So what we’ve seen in Sant’s MLP is a constant battle to keep the delegates in line – they have a lot of power, so it was important to see that they use it ‘appropriately’. Hence Sant’s oft-repeated claims about ‘it-team’, and ‘min mhux mat-team huwa serp…’ It is no wonder that Sant’s unique contribution to the party statute is the Bord ta’ Dixxipplina u Vigilanza (except for changes in 1994 to introduce ‘positive discrimination’ mechanisms for women in party posts, which remained largely on paper).
Had Dr Pullicino’s motion passed, it would have been a milestone for party democracy in Malta. Across Europe, it is a mixed bag and I will not go into the different systems, for which I would need to research rather than rely on memory. (In the UK, paid-up members elect the party leaders. In the US, presidential nominees are chosen by millions of party members in caucuses and primaries, but the system there is so different it’s not comparable – suffice to say that the caucus and primary season forms an integral part of the presidential race and is largely determined by the self-fulling prophecies of the mainstream media, which are split over both sides of the SAME coin…)
Not all is lost for GA. Don’t underestimate the extent to which delegates felt their power threatened, which by far overwhelmed the support many of them still have for GA. Many reasons were brought against the motion, even by supporters of GA. As one old delegate supporting GA explained, ‘we cannot trust the PN not planting false members over time in order to influence future leadership elections.’
Indeed, sharing power is not a human trait. And this is best exemplified by the PN party structure, where the Kunsill, or whatever they call it, selects, elects and decides for all. That is why the PN top brass have no problems with reining in their flock – they have no teeth and no muzzles are required.
There is a lot to be said both in favour as well as against the motion to widen the electoral college that elects a party leader. But Labour delegates last Friday did not vote on the motion but on its presumed proponent. The barbs against George Abela and the innuendos that he’s an agent of the PN were all too obvious. The party machine made sure this motion was expeditiously killed in a few days after it was presented and with the indulgence of a full hour’s debate.
The Labour delegates’ mentality is very obviously a bunker mentality: if the independent press would like us to do something, then we’ll do precisely the opposite.
Now, hail Joseph!
As simple as this….MLP never learns!
Marlene Pullicino, do you still want to remain in a party that is basically stuck in its own narrative?
The delegates have shot themselves in the foot and the argument seems now virtually closed. The result of this extraordinary conference has been a foregone conclusion for some time now. They will have only themselves to blame if they go through a fourth consecutive defeat next time round.
I wish to comment on one point mentioned by Mario Debono and with which I agree. Yes, people want to take control over their own lives. Here, once more, I raise the subject of divorce since, as the saying goes, “la lingua batte dove il dente duole”. Many people cannot have control of their lives in the absence of a divorce law and the law must be effective – it must not make divorce so difficult to obtain that only a handful would succeed, a token divorce law meant as a sop to Cerberus. If a liberal law would not be enacted soon, without further pointless debate as if we’re trying to re-invent the wheel which has revolved round the earth for decades and centuries, many people would still have their destinies in the hands of others – the ruling elite seemingly insensitive to the pain in people’s lives which are, alas, too short to afford waste of time in waiting for proscrastinating, indecisive governments (and here I include all governments since 1921) that consider statistical economic growth as the only yardstick to measure people’s quality of life. There is more to life than material progress measured in house and car ownership. There is an emotional dimension that is left unsatisfied and frustrated because governments have not found the moral fibre to enact a divorce law because they fear God (some of them) and/or social consequences which exist already because of separations. Those who want to go to heaven had better not be in politics and make way for others who are less prone to put religion before the needs of all their population indiscriminately.
This aspect of our lives is still out of our hands and in the hands of the ruling few who may have their own selfish interest at heart rather than that of the people they govern.
Meerkat – If I recall correctly, Marlene Pullicino herself stated – in the run-up to the last election – that her hero at the age of four was none other than Mintoff himself.
With a hero like that, and in times like those, you can’t expect different, can you?
@ Amanda Mallia
With such a hero, I am surprised the survived she Nationalist Party then… too sane for her tastes.
@Libertas – you speak as if the delegates were a bunch of 20-year-olds who don’t remember GA in the early 90s. GA was deputy leader for party affairs, for heaven’s sake! He was prominent in restructuring the party through the 1996 victory. What are you babbling about “innuendos that he’s an agent of the PN” being “all too obvious”?
The negative vote on the motion is not being considered as a message to GA. The idea of widening the base had been doing the rounds since at least 2003, but was never put to a vote.
Yet Libertas assures us that “Labour delegates last Friday did not vote on the motion but on its presumed proponent.”
Where did you discover this gem, Libertas? Ghand tal-growser?
I would not rush to the conclusion that the best way to elect a party leader is indeed the membership. Being a paid up member may not mean you are in the best position to choose the best leader.
Most people on this blog are possibly coming to this conclusion because historically MLP delegates have appeared to be so easily manipulated, and therefore it would be better for the MLP membership to elect their leader this time. (After the KMB fiasco, and the Sant tbazwira of his election; re election; and re re election) But the MLP being such a dysfunctional party one cannot expect the delegates (or party members) to be any better than a bunch of moghoz! I know this sounds offensive but how could one conclude otherwise that after 16 years of Labour govt the PN just got a majority of 4000 votes in 1987 – and this is an important reason why Labour lost the last election because a good number of educated first time voters voted PN, irrispective of their parents political allegiance who vote like moghoz . Another example is how Silvio Parnis garners 5000 votes , if not moghoz. Or just simply listen to the vox pops on Super One…and then you marvel what leaders MLP elects ?
The rot in the MLP has been so great with the party each time being proved wrong , such as Independence, Europe, economic liberalisation , education , health, that it is a party without a vision, just flopping around with sheer nonsense ,completely out of sync even with its socialist counterparts.
Since Daphne and Co reasoned out that the best possible leader is GA , ergo his only chance to get elected is to change the rules.
But look at the PN side of things. Have a look at its delegates , a real cross section of society, self employed, civil servants, employees, professionals, students, pensioners,labourers, businessmen, etc A TRULY POPULAR PARTY. The result is that the PN has a history of great leaders, Sir Ugo Mifsud, Nerik Mizzi, George Borg Olivier, Fenech Adami and Lawrence Gonzi. Great statesmen who ALL delivered great results in their respective eras. Not only, but the PN was spoilt for choice with the unsuccessful candidates contributing to the party and to government .To mention a few…Censu Tabone, Guido de Marco, Louis Galea, John Dalli.
The reality is that the MLP has become a dysfunctional party ,which, in the past 30 odd years has been unable to attract people with a true politcal vocation, but in the majority a hotch potch of people who either want to improve their professional clientel , or bear some grudge against the PN, or a local counsillor seeking a promtion to parliament.
Personally I dont think any of the 5 candidates have leadership qualities , not even GA. I think he is a quitter,and something devious about him.
Moreover in politics you need someone who has worked his/her way through the party grassroots contesting party elections on their own steam, rather than dropping in ,out of nowhere.
Interestingly Borg Olivier, Fenech Adami and Gonzi were all unsuccessful on their first electoral attempts.
So please dont generalise that all politcal parties should change the way they elect their leaders. I suspect if it were not for the delegates , but party members electing their leader, the PN would not have had Fenech Adami or Gonzi as leaders , as both were rather “publicity shy ” before they became party leaders.
The bottom line is that one cannot expect the PN to remain permanently in govt and it will be a real shame if the new Labour leader will not reform the party as a credible alternative government. Then Malta would need someone really daring who will create a spanking new powerful party, as happened in Italy, with Veltroni’s Partito Democratico replacing the communists.(And as Berlusconi had done in 1994 with his Forza Italia replacing the DC)
All I know is that the MLP go out of their way to ensure defeat. Can’t they realise that after the Sant fiasco nobody will trust somebody like that Joseph Muscat? Personally I long for the time I can have a choice when voting, but labour insist on forcing me to vote PN.
@europarl
I think you are serenading below the wrong window.
Labour ward perhaps!
Don’t take everything for granted maybe Lebertas statement re the innuendos that GA is a PN agent could be factual. :) Trid tkun lejborist to understand one.
Are you one??!!
The motion did not pass, it’s their prerogative, at least it was processed democratically not as last Labour party leader election.
I just hope that the person elected would be someone accepted by everyone, with strong democratic values who will continue to build the labour party.
The party which is likely to govern after 2013. A leader with progressive views where the people’s quality of life will be first on his/her agenda.
Political parties need to focus on the reduction of social inequality, start reforms on divorce, gay rights, abortion rights, minority rights, the list is endless.
I just think the party should look outside our traditions and customs. We need to break the mold of previous political parties practice. Whatever happens in this country have to be controlled by a political party where on the other side antagonism prevails by the opposition party. Norman Lowell describe it as “ Iz-zewg prosituti lesbici jaqilbuha lil-xulxin”, we need to explain to Charlon Gauder that politics are not a Jerry Springer show and not to underestimate the intelligence of the people. One News should stop using the word “Dizastru fil-pajjiz” in their news coverage and the government also need to read the “signs on the walls” that although one needs to negotiate a pairing arrangement appointing Louise Galea as speaker of the house is not what we voted for. Besides Louise Galea is not an MP and its not his place, an unbiased person makes more sense.
We need to create a political culture that embrace new ideas were the two parties work together hand in hand for a common goal, for the benefit of our country. This traditional political culture hinders our national progress. The conflicts between the parties are senseless considering the party’s political ideologies do not differ from one another.
The MLP representatives voted so. It was Democracy in action.All those who spoke in favore the motion and all those who spoke against it, agreed it was fairly run and most democratic.All accepted the verdict.Fullstop.Silly remarks are not worth a dime.
All five contestants for leadership are passing over their views and all have same chance of being elected.Rather then spending their energy on the MLP,the PN and its followers should find out why so many thousands deserted them. The miserable majority the PN now enjoy may yet dwindle away very soon, unless drastic actions are taken.
My question is when is the PN to follow and elect the party officers and leaders democratically?
@Jennifer Attard
Democracy in action does not allow for a secretary general to pronounce his personal views publicly.
The un/elected PN representatives show exactly why some voters deserted. The voters choice is the answer. The interesting point is that they did not vote for the MLP.
Even so the PN won and the MLP voter turnout remained practically the same as the previous election.
Do you think that any one of the contenders is capable of wowing these deserters to the MLP fold.
I very much doubt it.
@Jennifer Attar – a week is a long time in politics, 5 years more so. the PN system of choosing leaders works for them, you can’t say the same for the MLP. Still, it’s their choice.
@ Leonard MB
since when did Louis Galea become Louise Galea. Did anyone hear of the sex change ? So will we have a Madam Speaker in a wig ?
@Leonard – whoever within Labour makes the “PN agent” argument against GA risks being ridiculed or sidelined (and by “within Labour” I mean within the delegate fold).
The main argument against GA is that he abandoned the party when things were getting tough. This spin does not stand when the facts are clear, and it’s something he’ll be explaining when he addresses the conference.
The reason why the delegates shot down the motion (as expected) is because power sharing is not on their agenda, period. Considering the prevalent frame of mind, 165 is in fact quite a high number.
GA’s battle is against the stalwart delegates supporting the main manipulators in the party, three of whom are contesting.
I wonder how a delegat/a will keep a straight face when he/she knocks at the tesserat/a’s door with the ‘ftit minghand il-hafna’ begging bowl after telling them he/she’s only interested in his/her money and not in his/her opinion.
@ Me … Democracy allows not only mistakes to be done but much worse allows all kids of lies and deciet. Jason made a mistake in my humble opinion even to express his personal opinion. But that cannot be called undemocratic.
How much worse blatant lies are?How much worse was when EFA was found guilty by court in lying about AS on an eve of an election campaign?Democracy does allow such silliness.
So please try to define democracy much better.
How would you define the thousands of vote that the PN lost just few weeks ago? Maybe you forgot that thousands turned their back on the PN at last GE.
Maty I remind you that the MLP used the ‘secret vote system’ on many ccasions at their GCs. Please do name me one instance that the PN ever used the ‘secret ballot system’ in chosing any leader or any high officer in their party.
I know that stepping in this forum I be stepping in the lions den. However it doesn’t frighten me.
[Moderator – Lion’s den? I think we’re actually quite benign.]
@andrew borg-cardona — yes I agree with you the system the PN embraces works wonders with them. Hope they keep it for a long time too.
Above all that the ‘back scratching system’ the PN applies when in office is always rewarding. This system should be well studied by the future leader of the MLP. It does miracles in gaining power.
MLP should take note.
Here’s a lion for you Jennifer Attard
;-p
http://www.youtube.com/watch?v=5kiZ6qKKat4
A new party is what Malta needs – an off-shoot from Labour. If these people really want change, that is.
@Jennifer Attard
Don’t know what you’re basing your comments on but if its the beano (l-orizzont) and the Cartoon Network (OneNews) then I’m not surprised.
Regarding Jason Micallef and his so called mistake. Its not just a mistake, its a blatant disregard for democratic principles and another example of why he shouldn’t be where he is. Imagine a judge telling the jury he believes the defendant is guilty in his summing up? There would be immeadiate cries for his impeachment. How can someone in his position make statements of such partiality as this? Because he either does not understand or care about the basics of democracy.
And whilst we’re talking about back scratching we can kill two birds with one stone. How do you think Jason Micallef got his job at Xandir Malta? By a letter written by his uncle the minister, that’s how – if that’s not a typical example of what you talk about I don’t know what is – but hey, the MLP lost the next election anyway. (and by the way when the letter was shown, Jason threatened a libel case and as far as we know never filed it, so until he files it…..)
With regard to EFA and AS, EFA may have got carried away, but the gist of what he was saying in the debate was that AS was at the head of a board which unjustly prevented many deserving people from entering university, and whether EFA’s son was one of them or not does not detract from the fundamentals of the statement.
The fact that thousands turned their backs on the PN but yet failed to vote labour casts negative aspersions on the PN, but even more negative on Labour, especially in view of the fact that they still came ‘second’.
By the way, where did you get this idea that the PN does not hold secret ballots? Reconfirming a victorious leader by acclamation (as happened yesterday) when there are no other contenders is not the same as electing a new leader after another has retired or has lost and is being contested.
For an example of the imposition of an anti-democratic voting practice, I suggest you look up Mintoff’s ‘Trusted Friend’ law…….
As to your comments about the lion’s den, rest assured that you can say what you like and at most you will be made fun of and it will be pointed out that on occasion you are talking rubbish.
But being afraid of expressing your political views, or being forced to hide your newspaper when you leave the newsagent just in case you get beaten up, let alone expressing a viewpoint, is something we became accustomed to under a labour administration and stopped when they were gone.
This was a test run for George Abela. The outcome is a farce. Can’t understand why Labour keep shooting themselves in the foot. I would like to wake up in 5 years time and vote for a party because I want them to govern..not out of choice.Learn Labour.Learn!
The issue is George Abela or Joseph Muscat. If the delegates looked like they were heavily in favour of George Abela and Joseph Muscat suggested that the wider membership vote for the leader I doubt there would be this level of debate.
I think the majority of thinking people see George Abela as being the only one who can give the Nats a good run for their money and that will be healthy for our country.
The Nats are also considering the same issue – but it is no issue really because the vast majority are happy with Lawrence Gonzi as leader and see him as valid……hence the debate will be nowhere near as vociferous.
Obviously not needing to elect a PN leader means the issue is also not quite topical for the PN!
But being afraid of expressing your political views, or being forced to hide your newspaper when you leave the newsagent just in case you get beaten up, let alone expressing a viewpoint, is something we became accustomed to under a labour administration and stopped when they were gone.
However much the young of today read about life in Malta under Labour, they can never realise the atmosphere in those days. Those in their thirties might remember not being able to buy decent chocolate, colour TV or computers but that`s about all. Those in their twenties not even that.
At a children`s party I remember kids not wanting a red baloon (or blue depending on the child).
I am still amazed how middle aged sedate people risked so much to go to Mass Meetings. If EFA did nothing good he managed to stir up the people not to let MLP carry on controlling us and give up any hope for change.
My son (5 at the time) had seen the SMU fully armed at a meeting held near our home – it impressed him greatly.
It`s beyond me how people who went through the eighties preferred not to vote and let MLP `almost win`.
Of course some comments hurled at my direction I surely ignore, though I expected them.
Such ‘biased comments’ demonstrates a galore of ‘forced thinking’ with no real substance. The traits and the trade mark of the PN and its die-hards are very well demonstrated in such comments.
The regular contributors in this forum for obvious reasons are reminding us all of the terrible past and ignoring that the present we live in, is much worse then those terrible times. The present threat to our Democracy is much stronger now.
Yesterday’s accusations that more then 2000 voters had no constitutional rights to vote but in fact they did, would surely be a priority in the very near future.
Our Constitutional Court should urgently deal with these accusations. The earlier it is dealt with, the better to protect our democracy. I wonder what happens if our Constitutional Court finds these accusations real. This is much worse them gerry mongering indeed.
I wonder indeed.
[Moderator – Gerry mongering? LOL.]
Lol ..you been fast!! Bet others wouldn’t have noticed the humor in it!!
@Jennifer Attard
When you suggest there is no substance in others’ arguments, you might substiantate YOUR point by rebutting their arguments rather than making generic statements of disagreement and accusing them of bias.
The definition of bias is leaning towards one side when one is supposed to be impartial, not saying truths YOU happen not to like and cannot rebut because they ARE true.
To even suggest that we are living in a time remotely close to the past, let alone worse, shows a tremendous detachment from reality.
As to people’s voting rights, the constitutional court is not there to suddenly wake up in the morning and start investigating this that and the other, but to judge cases brought before it by those seeking redress. No one has brought a case before it alleging that people who had no right to vote, did so.
Another point about the constitutional court is that today, if you are not satisfied with a judgement it delivers, you can (Thanks to the PN) go to the european court of human rights (no connection with the EU but the COE) to contest it. In labour’s time, not only could you not do this, but the labour government left the court vacant on purpose so it could pass anti-democratic laws and we would have no form of redress.
On another related note, if your comments on people voting derive from Evarist’s speech, I find it remarkable that whilst you seem to support what is an attempt to restrict peoplea voting rights, hence a threat to democracy, you rhen turn round and say that there is a threat to democracy today when it is you yourself who is supporting such a threat.
@Jennifer Attard
Good point you brought up the Constitutional Courts. Following is an excerpt of Mintoff’s address to the Bank Directors in 1973 at Castille. Not very long after he suspended the Constitutional Court for three whole years.
“Ghidu lix-shareholders kollha li min ma jiffirmax se jkun responsabbli personalment. Il-lejla jien kif nohrog minn hwan sejjer fil-parlament u nghaddi jew ligi jew ohra. Jew nghaddi ligi biex inqabbad Kunsill tal-Amministrazzjoni ha jiehu hsieb l-assi u l-pizijiet tal-bank, jew nghaddi ligi biex innehhi l-limited liability tax-shareholders kollha. Naf li din hija kontra il-kostituzjoni, jien nitnejjek mill-kostituzzjoni, mhux jien ghamilta, nitnejjek mill-imhallfin u minn kullhadd.”
(12/12/1973)
@ me: Thanks, though I doubt if you quoted the right date, because as far as I know in 1973 Malta still had the Independence Constitution. As far as I know the Republican Constitution (Mintoff’s) came into effect a year later.
Anyhow, if trampling on the Constitution was wrong 36 years ago, it certainly is not right now.
@ Mike C: Please try to understand well what I said and please do not twist what I said.
I never ever quoted Evarist as you took for granted. On the contrary to what you implied I am referring to ‘yesterday’s accusations’ in Parliament (seems you need that on a silver plate to comprehend). Neither you nor I have any right to restrict any one’s right to vote. If you are well read on the subject you should know that our constitution does clarify clearly who has the right to vote both in Local elections and in General Elections.
Not only that such accusations in our highest institute are very serious but much worse those accusations are pointed towards the main watchdogs of our constitution (the Administration).I find such accusations the most serious threat to Democracy and should be tackled yesterday before tomorrow. That was the point behind my earlier comment.
Why should anyone wait till July or September to substantiate or clear itself from these accusations? It is much better living under a clear sky then under constant cloudy ones.
Finally, it is the PN and people like you who should thank people like me for voting in favour of joining the EU, and not vice versa. Thus please try to be careful how you fire accusations at random. Or thus it mean that because I voted to join the EU , I should not express myself as I should and refrain from calling a spade a spade any more? Is this your kind of truth?
Mates, hope I am enough clear for you both and helps you not to jump to unwanted conclusions.
This time is not gerrymandering but much worse.
(@ moderator .. did I pass the test now … before it was a private joke which I believe you understood very well. Hux vera?
[Moderator – Not really, but carry on regardless.]
@Jennifer Attard: I can confirm that the date 12 December 1973 is definitely correct and that it is engraved into my mind. The words ‘Me’ quoted, as it happens, were addressed to my grandfather, who was president of the bank that Mintoff was in the process of stealing from those who owned it. Those words, too, are engraved in my mind. At the age of nine, it was the first time I heard the word ‘nitnejjek’, and my parents were quoting the prime minister.
@Jennifer Attard: after the bank’s property and assets were seized, it was renamed Bank of Valletta, and continued to transact business as usual. Meanwhile, the shareholders have not received a cent in lieu of what was stolen from them, still less compensation for the incomprehensible – to those who were not involved – pain and suffering that was caused to them, the effects of which are still being felt in some quarters. When Mintoff finally drops dead, rest assured that I’ll be among the first in the long queue to spit on his grave. May he rot in hell, where he belongs.
The date is exactly what is written. The case is the takeover of the national bank. Why Mintoff chose to call it ‘his’ constitution is for him to clear.
The point is “jien nitnejjek mill-kostituzzjoni” and “nitnejjek mill-imhallfin u minn kullhadd”
Not because he said so, but because elements of that parliamentary group and party officials, some of whom still occupy a seat in parliament or the party today did not speak out at the time, and today want to teach the rest of us the constitution.
@ Daphne
Mintoff may have done a lot of silly things but the NBM conversion to BoV is hardly one of them. If those were his words they were abusive but his action in prtecting depositors was definitely not. When a Bank loses the confidence of its depositors & its creditors it has little left for its shareholders to negotiate with. The recent Bear Stearns debacle in the US is proof that these things happen even in the mother of democracies.
When Mintoff passes away we will condemn the many mistakes he made especially after 1979. But I will remember that he is the architect of the social service structure we are so proud of today and he is the one who truly eradicted poverty in this island.
This exchange has wandered off its original subject which is what happened last Friday. What I don’t like is that the speakers in favour of the status quo, especially mayors Cohen and Farrugia, did not declare their interest in the status quo being mayors elected by the grace of the party machinery. The simple truth is that those who give to the party spoke in favour of the motion those who take spoke against.
Dear Alfred – please let’s not quarrel about this one. I am in a far better position to know the precise details of the situation, and exactly what happened. Unlike you and many others who seek to venture an opinion decades after the terrible event – and believe me, it was terrible, and money was only a small part of it – my family were among the main protagonists and privy to every last bit of information. Also, I know this information ‘in real time’ and not as rewritten history.
The run on the bank was provoked by a carefully scripted television appearance by Mintoff, telling people not to worry about the bank’s position (when they had no reason to do so). The result was a stampede. He prevented the Central Bank from intervening to help out. He threatened the directors into signing over their shares, using whatever method he thought would work best with the particular individual concerned. With one, it was the loss of limited liability in other companies. With another, it was a direct threat to another business he owned. With my grandfather, because he was demonstrably concerned about the fate of the employees, many of whom were the sole breadwinner for their families, he used the threat of sacking the lot of them and putting it on his conscience.
It is fatuous to speak about ‘concern for depositors and creditors’ when you and I both know that within the space of a few short years, that bank – which financed the development of Malta during the 1960s boom years – was transformed into the personal piggy-bank and playground of a certain Denis Sammut, who handed out loans to himself (I wonder, were they ever repaid, or written off?), his friends, Labour Party acolytes and ‘privileged’ businesses.
Neither of us is naive, Alfred. You know as well as I do that Mintoff was unable to implement his plans for controlling the economy, the country and individual businesses without total control of the main banks. And that is why he set about systematically targetting each bank as soon as he got into power in 1971 – until they were, by hook or by crook, within his control. We all know what happened after that. Without the banks, Mintoff wouldn’t have been able to do what he did, which was to bring Malta to its knees and control and intimidate people and businesses by (1) foreclosing, (2) refusing facilities (3) knowing the details of people’s finances, and (4) much else besides.
The seizing of that particular bank was a criminal act performed by a criminal prime minister – an avaracious man who is still money-grubbing on his deathbed. Perhaps he imagines he will take it with him when he dies.
Yes, Mintoff’s place now is in hell, as the person who split Malta asunder, provoked a culture of hatred and envy, and held back the country and most of its people when the rest of free Europe was moving ahead. He didn’t need to cause so much damage to introduce some social services and reform the Marriage Act, for heaven’s sake. Other prime ministers have managed to do far more without breaking the country’s back, and that’s why they won several elections on the trot.
The man was driven by hatred, resentment and a need to destroy the ‘superior class’ which he perceived as having rejected him. He even went to extent of marrying an aristocrat, and an English one, what’s more, seemingly for the express purpose of subjecting her to humiliation for the next few decades. If you don’t know the subject-matter of the photographs that Lorry Sant brandished in parliament in 1992, to intimidate Wenzu Mintoff, perhaps you should find out. Let’s remove the rose-tinted spectacles, shall we?
@ alfred Mifsud what cheek to compare National Bank of Malta to Bear Stearns. NBM had NO problems whatsoever, it was Dom Mintoff who just wanted to nationalise the banking sector in Malta, also kicking out Barclays in the process. So get your facts right before you write rubbish
@Alfred Mifsud
In 1973 I was far too young to take any notice of the events that were unfolding at the time, so I would like it if you could give us maybe more 1st hand details of the NBM debacle.
What you have said about ‘the Bank loses the confidence of its depositors & its creditors’ is surely correct in all senses, but could you from memory relate what happened to NBM to make depositors and creditors lose faith in it and, as far as I have heard, effectively run down the bank?
@Alfred: was the public’s confidence lost before or after Mintoff orchestrated the run on the bank?
@Mark and Amrio: the run on the bank was a direct result of Mintoff’s broadcast. And Mintoff’s broadcast was the direct result of the bank’s directors refusing to give in to his bullying. His reaction was: if you don’t give me the bank, I’ll go on television and provoke a run on it. That’s how things were done in those days. Presumably, it was impossible to introduce social services without behaving like an animal.
@Daphne: I thought as much (my question to Alfred was meant to be rhetorical). Isn’t it also true that all this was done in a vain attempt to bring down Farsons (who I understand owed quite a serious amount of money to NBD at the time)?
@Alfred Mifsud: Was the taking over of Barclays Bank in 1975 with salary reductions to employees and the writing off of their Bank pension scheme to save the depositors too?! Come on Mr Mifsud get real.
@Daphne
I had heard the NBM story you have recounted so well; just wanted to hear Alfred’s interpretation….
And also you wrote, ‘If you don’t know the subject-matter of the photographs that Lorry Sant brandished in parliament in 1992, to intimidate Wenzu Mintoff, perhaps you should find out.’
That sounds very juicy! Come on, can you Daph or someone else expand on that story?
@ Alfred Mifsud
I think that you have now beaten the words “party machine” and “status quo” into severely worn out cliches. You are attacking everyone in Labour who takes a position different from yours as a part or beneficiary of a phantomatic party machine and you indiscriminately accuse them of being stuck to the status quo. Rather than using this blog to challenge the two mayors you cited to declare their interest in the status quo why don’t you pick up the guts to throw your challenge them your Friday wisdom corner in The Independent or write to them directly to demand an explanation. Who knows? They might do you the honour to give you a reply.
@Jennifer Attard
I don’t understand how you came to the conclusion that I suggested you couldn’t call a spade a spade because we’d joined the EU. In fact I encourage you to call a spade a spade because so far you have called it everything EXCEPT a spade.
I never mentioned the EU except to point out that the European Court of Human rights is part of the Council Of Europe and not the EU. The fact that we can take a case to the European Court Of Human Rights and that our government is bound by its decision is nothing to do with our joining the EU but is a right we have had for 20 years, thanks to the PN and in spite of the MLP’s opposition to it, who would have rather preferred Mintoff’s approach to the constitution, as amply quoted above. And my reference to the ECHR was that basically if anyone thinks something is not quite right, they can take a case all the way to the ECHR and the Malta government will be bound by the outcome.
And by the way there is no such thing as Mintoff’s constitution, the constitution is a pretty long document and with the exception of some tweaks (4 or 5?) here and there with regard to the head of state, neutrality, citizenship, and how we decide who has won an election it has remained mostly unchanged since independence.
About joining the EU, neither I nor the PN have to thank you for anything. If you thought joining the EU was better than staying out, and voted to join then you did what you wanted to do yourself as was your right to do. I voted to join the EU and I don’t expect any thankyous from anyone and I certainly won’t thank you for doing what you thought was best for yourself or your country – its your duty – as it was for those people who believed we should have stayed out of the EU and voted no. Luckily there were less of them than there were of us, but EVERYONE who voted did their duty as they should have irrespective of how they voted. Those who decided not to vote as instructed by AS simply shirked their responsibility, as he did. (except the dead of course, but according to AS they voted no, remember?)
With respect to the overseas voting, since it wasn’t clear to me what you were referring to, I did preface my comment with an ‘if’, but thank you for the silver plate, I stand corrected. But the same applies. Alfred Sant has simply gone a step further in his accusations than Evarist Bartolo, but as usual he has restricted himself to a comment in parliament, instead of starting a court case, which is what he would have done if he had any grounds.
What he is saying between the lines is ‘you see, if you don’t disenfranchise people who are abroad then you’re open to abuse’. It’s the standard repeated MLP line and they have raised it time and time again. As I mentioned before, if he wants, he or anyone else who believes there was abuse can institute a court case, instead of holding a teatrin outside the depot, but two months have passed and no-one has done such a thing – as usual its just hot air and propaganda.
But I know where he and the MLP are coming from. The MLP has this crazy paranoid fear that all the nuns and priests are going to come back from the missions and vote PN. So as a result of that fear they have historically and systematically done their best to disenfranchise the Maltese who live abroad.
AS’s statements are nothing more than support for the position of taking away the opportunity for ANYONE who lives abroad to vote, when we should be doing exactly the opposite. If you support his position on expatriate voting, (or non-voting, in fact) then yes, you ARE advocating restricting peoples right to vote. If you AREN’T in favour of stopping people who live or work abroad from voting, then good, but if you DO support AS & MLP on this issue, essentially what you are supporting is voter disenfranchisement.
As to what the constitution says about who as the right to vote in a general election (I don’t believe the topic of local councils is touched upon), I know what it says and its unfair. And at last, rather than changing it, the parties seem to have agreed to stop making use of it to disenfranchise people, effectively ignoring that unfair proviso. The difference is that the MLP was always much more organised, eager and efficient at removing people from the electoral register, and has only stopped doing it because it was shamed into doing so. (And its paranoia is telling it to start again!)
But we should also be considering giving the vote to those foreigners who live, work, pay taxes and spend money here, as our citizens have in some other countries, and not just in local councils, but in general elections. But I can’t see the MLP agreeing to that, because they know that anyone coming from abroad without any historic baggage will take one look at them and run a mile!
@ DCG
Dear Daphne, permit me to suggest that in so far as the NBM affair in 1973 is concerned you are hardly an objective and impartial analyst.
I also have some experience as I was close to the events as they unfolded and I would dare to say that I can look at things from a much more impartial vantage point than you can.
At the time I was a 22 year old lad working in the credit department at Head Office of Barclays. I was totally detached from politics. What I can say however is that the senior bankers from Barclays, the eminence grise of Maltese banking at the time, who were called in to investigate the true state of affairs of NBM after the Council of Admin was set up all reported what a disaster the bank was in. In their opinion at the time the Bank was not only illiquid but insolvent.
Many defined the inner workings of the Bank as resembling a Banka tal-Lottu where credit decisons were taken by a single person without much documentary justification and without meeting basic prudential standards.
Now whether this maladministration led to the run on the bank or whether it was Mintoff who stimulated the run is conjecture. Who knows where rumours start and why?
Take the recent Bear Stearns affair. On March 13 Alan Schwartz their CEO was proclaiming on TV that they had no pressure on their ample liquidity. By the end of business on 14th March he was on his knees at the Federal reserve begging for support to avoid bankruptcy. The Fed provided support but only after the shareholders agreed to sell out to JP Morgan for nominal value.
Truth is that when such runs happen they happen fast. Rumours feed on themselves and beyond a certain tipping point the position becomes irrecoverable for shareholders. If the problem is illiquidity than the central bank as lender of the last resort will step in to prop up the bank but normally such illiquidity problems are general to the whole banking sector and not to a specific bank. When the problem is one of solvency normally the central banks priority will be to engineer a speedy takeover to protect depositors and not to protect the Bank and its shareholders. This is exactly what happened in case of Northern Rock in Uk and Bear Stearns in the US.
This does not justify Mintoff’s gaffe’s way of doing things but the substance remains.
@Ray Borg
Sorry if I annoyed you with cliches. I ll try to avoid them. But I don’t get your point. Why should I dedicate a whole Friday column to something I can say in one para? Is this not as much public domain as a newspaper?
My email is public knowledge tru my website so if anyone wants to answer me he is free to do so publicly or privately.
You have however not addressed my basic point. I do not attack anyone. I criticise and point out my endorsement or disagreement. I am all for good governance standards.
Basic principles of governance is that conflicts of interest are to be avoided and where this is not possible they are to be declared. So while the two gentlemen mayors have every right to express themselves as they wish when addressing the general conference, basic governance principles would have demanded that they declare that they earn their living through their mayoral position which they hold with the blessing of the internal party administration.
@Alfred Mifsud – I said that I don’t want to argue about this, but surely you are not saying that your hearsay as a 22-year-old, however far removed from politics, is more valid than the information and sworn testimony of the senior businessmen involved, who included Anthony Miceli Farrugia, later appointed by another government to the directorship of Mid-Med Bank. You are in no position to know how loan decisions were taken at the National Bank. You are, however, in a very good position to know how loan decisions were taken at Bank of Valletta and Mid-Med Bank in the years 1974 to 1987, leading to a phenomenal accumulation of bad debts which had to be written off, at the former bank at least.
@Alfred Mifsud – and the beat goes on, with Bank of Valletta still acting as the government’s lender of last resort. I wonder on what basis (rhetorical question) the decision was taken to loan this sum to Enemalta, what hope the bank has of recouping the capital sum and over how many years, and what has been offered in terms of security, if the state isn’t acting as guarantor. You will agree that the sum of EUR120 million is not insignificant, yet I don’t see any corporate communication to shareholders, unless I missed it. http://www.timesofmalta.com/articles/view/20080514/local/bov-lends-enemalta-euro-120-million
@Dear Daphne,
I think I made my case. My opinion of what happened in 1973 is not based on hearsay. I was rubbing shoulders with these senior bankers everyday so I have first hand experience of their opinions at the time. What I said is that my viewpoint has more credentials of impartiality than yours as an interested party.
I have no wish to debate what happened at BoV afterwards. We can do that on another occassion over coffee.
Regarding the Enemalta loan however you ought to know that Enemalta is a corporation setup by Statute and government is directly responsible for its debt.
@Daphne,
I should have emphaised that I left Mid-Med Bank in Feb 1981 can can give you total reassurance that till I left, under the chairmanship of Pawlu Xuereb, our lending standards @ MMB were absoutely robust and professional and there was no accumulation of bad debts.
@ Alfred:
Just to point out that:
“I was rubbing shoulders with these senior bankers everyday so I have first hand experience of their opinions at the time.”
If as you say, you were “rubbing shoulders” does not mean you saw the evidence at first hand, Alfred.
“Opinions” are not facts either.
And when you wrote:
“This does not justify Mintoff’s gaffe’”
I would call it many things, illegal, abuse of power, unfair, unethical, robbery, etc etc, but definately not a gaffe. But than I suppose you are seeing it from the other side, the side that “benefited” or at least did not loose anything out of the whole sordid deal, as against the side that was robbed.
Alfred, it would be interesting to see how lending to state corporations is split between Bank of Valletta and HSBC. That the government is directly responsible for repaying this loan of c. Lm42 million means little or nothing. How is the government going to get that Lm42 million? Answers on the back of a postage stamp, please. And is the bank likely to foreclose or get nasty? An even smaller postage stamp is required for that answer.
@ Alfred Mifsud Your statement that your seniors at Barclays had a very poor assesment of NBM is hardly surprising. We all know what Barclays were like, and yes in all probability standards at NMB were more lax, but certainly NBM was not insolvent !
Even today if we had a PM who went about pouring suspicion on a bank , causing a run on a bank , it would be illiquid without Central Bank intervention .
We all know Mintoff’s agenda, so much so that Barclays was nationalised sometime later.
The shame is that PN after 20 years in govt has still not compensated for that high way robbery (PS I have no peronal interest in the case)
@Daphne
Have you already began to doubt that Malta could default on its sovereign obligations when we have been admitted to Euro on the back of strong public finances? Is that answer short enough?
@ Alfred Mifsud
You know very well that newspapers have a much wider circulation and are more accesible than blogs and web-sites. Probably this is why you chose to-day’s Times to have another go at Alfred Sant’s incumbency (this is another bee that is creating havoc in your bonnet). Your battle for good governance is indeed admirable but why pick on two mayors and imply that they fall short of good governance because they “did not declare their interest in the status quo being mayors elected by the grace of the party machinery”
Two things Mr Mifsud. Show me one mayor, Labour or Nationalist who has not been elected by what you allege ‘the grace of the party machinery’ or whatever you mean by this.
Secondly, pick up the guts and print your criticism of these two mayors in the local papers if you feel so strong about their lack of good governance
I’m not doubting anything of the sort, Alfred – just wondering out loud why it always seems to be Bank of Valletta which rushes to the rescue.
@ Daphne
There is no rescue really. Given our sovereign rating and Euro membership Enemalta would have had no problem in raising this credit from international banks.
@ Ray Borg
I picked upon these two mayors because they influenced the dlegates through their cheap oratory without declaring their conflict of interest.
I am not exactly known for hiding my critisism, am I? Hopefully I can have an opportunity soon to discuss my misgivings directly with the two gentlemen.
Has anyone ever read how the assets of this bank and other banks were sold?
I read how KMB ‘forgot’ to pay ground leases , I believe Developmeny House and not having a few thousands of pounds to pay the ground lease of the Comino hotel as the liquidator of a bank, and by not paying the ground lease he handed the land and the HOTEL on a silver platter to the land owner who in turn sold it for Lm 3 million . Then there was also Castille Hotel …..
Alfred Mifsud looks at it from a technical point and Daphne sees it from the receiving end , I believe that if Mintoff would have done the same on Barclays the same would have happened , it’s a question of trust.With his TV speech to the nation he only continued to erode the trust the Bank had.We Maltese are suspicious people and it did not take much for the depositors to conclude that Mintoff set his eyes on the bank.
@John Schembri – Karmenu Mifsud Bonnici disposed of the assets of BICAL, not of the National Bank of Malta. They are two separate issues, and very different cases.
Isn’t it one of the duties of a country’s central bank to act as a lender of last resort when a run on a commercial bank occurs?
Wasn’t the central bank unjustifiably prevented from doing its duty in the case of the National Bank?
Wasn’t that a deliberate act meant to aggravate, rather than ease, depositors’ panic?
Don’t all banks use deposits to provide credit facilities to clients, including some of the depositors themselves, which means that no bank ever holds enough cash to honour all deposits simultaneously?
Doesn’t that mean that trust is fundamental to a stable banking system?
Isn’t that the reason that a central bank backs up commercial banks by acting as a lender of last resort?
Isn’t that why Malta’s central bank was prevented from doing its duty in the case of the National Bank?
Wasn’t Mintoff the person behind the decision to prevent the cetnral bank from acting as a lender of last resort?
Was he genuinely acting in the interests of depositors, when some of those depositors were shareholders who were threatened with seizure of all their assets unless they ceded their National Bank shares ‘voluntarily’, and employees of whom he said “nigi nitnejjek – jidhlu fil-pijunieri” when someone asked what would become of them if the bank were taken over?
Is Mintoff’s ‘conversion’ of the National Bank to Bank of Valletta really so admirable, after all?
And here’s under quote worth mentioning:
“U issa ha’ mmur inbul” (said “waqt li kien qed jiftah il-kuzakk”.)
Use your imagination as to who said it. It was said to a group of true gentlemen, by one who certainly never was one himself.
… and certainly still isn’t one
“1973: National Bank Group faces a run on the bank. The Central Bank refuses to act as a lender of last resort and blocks Barclays and other banks from supporting the Group. The Government of the day, in a scandal marking Malta’s Banking history, wiped out a whole generation of Banking history by forcefully taking over the business of the Bank, and assuming it’s business and Assets with no compensation to its shareholders (274 shareholders). The National and Tagliaferro Banks Act 1973 was passed. On the dark day 22nd March 1974 the Bank of Valletta took over business with Lm43 Million in Assets, 27 Branches and after 9 months, a miraculous Lm1 in profit.”
Extracted from:
http://user.orbit.net.mt/fournier/MNhistory.htm
Readers may reach their own conclusions.
@Alfred Mifsud: To your statement “…What I can say however is that the senior bankers from Barclays, the eminence grise of Maltese banking at the time, who were called in to investigate the true state of affairs of NBM after the Council of Admin was set up all reported what a disaster the bank was in. In their opinion at the time the Bank was not only illiquid but insolvent.”
So, with the alleged illiquidity and insolvency of NBM, under what motivation did the (UK) Midland Bank declare itself ready to pitch in with a suitable loan to enable NBM to ride out the uncalled for run triggered by Mintoff – even while the Central Bank was considering it proper to fail in its primary function and concentrating on looking the other way? and why did Mintoff, who you say was so concerned in assuring security of depositors, consider it opportune to block that inter-bank transaction that would have immediately defused the artificially-generated crisis?
What with closely rubbing shoulders with senior bankers at Barclays our 22-year old AM must surely have been fully conversant with ongoing inter-bank support between Barclays and NBM to iron out possibly adverse effects of the above-normal withdrawals/demands that are occasionally prone to occur?
Mintoff and his cabinet cronies, and those all the way down to the most minor party officials spent a very great part of the 70’s and early 80’s citing Mintoff’s achievements in setting up Sea Malta, Air Malta, Bank of Valletta, Mid-Med Bank. Truth is, Mintoff had simply taken over stable and well-established businesses at gun-point by resorting to dubious measures [or as that other Alfred said recently, by using his ‘power of incumbency’]. Of these:
Sea Malta never managed to attain viability, even after other established shipping lines that had served Malta well had been compelled to cease such services.
ditto Air Malta. Its predecessor Malta Airways, and upon whose ground equipment and infrastructure forcibly taken over by Labour government Air Malta was founded, had had its operating licence terminated precisely at the time when it had bought options on 3 of the then newly introduced Trident aircraft and the cancellation of which purchase involved Malta Airways in a significant financial loss. In its stead, Air Malta trundled in with obsolescent, fuel-guzzling, Boeings for which Air Pakistan had no further use.
Mid-Med Bank – based on the assets and goodwill of Barclays DCO who had been subjected by Labour government to an offer that one cannot refuse – had, as one of its main functions, acted as a channel for funnelling millions of Malta Liri from depositor funds to keep the Dockyard and other government-hatched lame ducks artificially alive. As AM must be well aware, these worthless loans were not taken over by HSBC and Maltese tax-payers have had to make good for these wasted funds that,including unpaid PAYE and NI dues converted to ‘loans’ at tax-payer expense, in the case of Drydocks alone account for some Lm300,000,000 or 30% odd of the national debt.
One other significant use of all the above was as a repository for the vote-catching thousands of non-jobs created by the Labour government in the lead-up to the 1987 general election – and the financial consequences of which still burden the tax-payer.
Bank of Valletta, based on the ‘illiquid and insolvent’ NBM, in contrast, rapidly progressed and sustained profitability, even despite periods of mis-management already referred to in other related posts. For, in truth, NBM insolvency was only a fiction drawn up to justify Mintoffian whims.
The accounts as drawn up in the aftermath of the Mintoff- triggered run on the bank used some very odd accounting practices, e.g. the bank head office at Republic Street, was valued at its initial £(Lm) 11,000 purchase price as a bomb site in the late 40’s, then depreciated over 25 years with no cognisance whatsoever of the building eventually erected on the site – this at a time when a one-room shop a few metres away was leased out at a premium of Lm11,000 over and above a substantial daily rental. This strange form of asset valuation would have been used for the many branch offices owned by NBM island-wide. So far as is known those initial accounts were never subjected to a proper and in-depth audit.
What is never refered to is the number of businesses and valuable jobs in the private sector that were lost as as result of the forcible take-over of the NBM, and the many lives that were ruined in the process.
Twenty years on [since 1987] we tax-payers are still footing the bill for the consequences of Mintoff’s blinkered and luddite ideology, and of the incompetence of his period of governance and those of his chosen successor KMB, …and so will the next two or three generations down the line.
Yes, indeed, Malta has a lot to thank Mintoff and his contemporary parliamentary cronies for.
Meanwhile, government has an ongoing obligation to make good to NBM shareholders for the abuse they have been subjected to and to restitute the financial losses they endured by paying out a sum equivalent to a true and fair assessment of the asset value at time of NBM takeover with accrued interest at appropriate rate.
By continually dodging fair settlement of the NBM issue, government is effectively aligning itself with the abuses of the past.
Michael Vella – Well said, especially your closing sentence.