BREAKING/Central Bank Governor-designate took large amounts of cash from major supplier when he was Mid Med Bank chairman

This website has received cast-iron information that Alfred Mifsud, who is set to become governor of the Central Bank of Malta on 1 July, took a significant amount of cash from a well-known businessman – who is not being named for legal reasons, though this website has the information – when he was chairman of Mid Med Bank (now HSBC Bank Malta) during Labour leader Alfred Sant’s brief tenure as prime minister in 1996 to 1998.

The wads of cash, packed into large envelopes, were delivered to Alfred Mifsud at his home in Balzan, personally by the businessman himself. At least three such deliveries were made, each one of Lm50,000 (total €350,000). When the Nationalist Party was voted back into government in the surprise election of 1998, Alfred Mifsud was removed from his position at the bank. At that point, there was still an outstanding cash payment of another Lm70,000 (€163,000) which the businessman was supposed to make to Mifsud, but he did never did so once Mifsud had been removed from his position.

Mifsud’s removal had nothing to do with these cash payments, which were unknown to the authorities. His resignation was requested on the change of government as standard because he had been a political appointee.

The businessman who took the significant amounts of cash to Mifsud’s home was the Malta representative for the American company EastPoint, which manufactures software for the financial services industry.

At the time the cash payments were delivered to Mifsud, EastPoint was engaged in installing new software worth millions, replacing Mid Med Bank’s entire Bankmaster system, which had only just been installed under the previous chairman, with the EastPoint system described here.

When HSBC bought Mid Med Bank in 1999, the EastPoint/IBM system was still being installed. HSBC carried on with it for a while, but then cancelled the process and brought in its own system. EastPoint sued Mid Med/HSBC for breach of contract. See document here: EastPoint vs Mid Med Bank and HSBC for breach of contract

I rang Alfred Mifsud for his comments, advising him to think clearly before replying and that I know the cash deliveries by Businessman X (I gave him the name) are fact and not merely an allegation. I suggested that he could ring me back later if he wished.

After a very brief pause, Mifsud denied that he received money, and then ascribed the information I had to deliberate slander by third parties causing problems in his personal life. I reiterated that I know for a fact that Businessman X made very large cash deliveries to him personally, and that it is documented fact, as he himself admitted, that this businessman’s company was the Malta fixer for EastPoint of the United States at the same time the cash deliveries were made.

While the cash deliveries are fact, their link to the Mid Med Bank software tender is a rational assumption. “If the cash deliveries made to you by Businessman X, when you were chairman of Mid Med Bank, were not backhanders in connection with the EastPoint software system installed at the bank, can you explain for what other purpose X gave you such large amounts of cash?” I asked.

“I received no money,” Alfred Mifsud said. “They never paid me any cash. The system was installed following an open tender process by the bank, and the decision was taken by the bank’s board of directors and not by me alone. It was a very long and complicated process.”

I replied that the tender process couldn’t have been all that long or complicated, because the government itself lasted no longer than 22 months. “Yes, but we began immediately,” Mifsud said.

One former senior Mid Med Bank official told this website: “Mifsud started his chairmanship determined to change the bank’s software system, even though the Bankmaster system had only just been installed and we hadn’t been using it for long.” (Mifsud’s response, when this was put to him, was that the system may have been new, but it was “obsolete”.)

“He sent personally handpicked bank officials on what was practically a world tour, paid by the bank itself, visiting different countries where the EastPoint system was used. They came back raving about the system whereas only a year previously they had been saying the same about the Bankmaster system,” this former Mid Med executive said.

Alfred Mifsud, who was chairman of the Labour Party’s television and radio stations for several years, was appointed deputy governor of the Central Bank of Malta in May last year. The Central Bank already had a deputy governor, and the second deputy governorship was created at that point. He will take over as actual governor on 1 July, when incumbent Josef Bonnici’s term is up.