ECB says it cannot comment on Cuschieri’s alleged breach of ethics

The European Central Bank has declined to comment about the Las Vegas trip attended by MFSA CEO Joe Cuschieri, saying it cannot comment on individual cases.

It was revealed this week that Cuschieri, together with the financial services watchdog’s general counsel Edwina Licari and the former personal assistant to Keith Schembri, Charlene Bianco Farrugia, had travelled to the US in May 2018 together with Yorgen Fenech.

Fenech was at the time interested in investing in the US and took Cuschieri along to advise on ‘regulatory matters.’ Fenech paid for the flights while the accommodation was covered by the hotel – Caesar’s Palace. Cuschieri told this newsroom that he had not been paid for his service but would not go into detail about the advice he had given to Fenech.

Cuschieri had just quit as CEO of the Malta Gaming Authority and was in the process of taking up a new post as chief executive of the MFSA.

Licari was at the time a legal advisor at the MGA. She later joined Cuschieri at the MFSA and was also appointed to the board of the Financial Intelligence Analysis Unit (FIAU).

Both Cuschieri and Licari have self-suspended from the MFSA, and an investigation has been launched by the board. Licari has also resigned from the FIAU.

According to reports, Cuschieri breached the MFSA’s code of ethics when he accepted a gift, in the form of flights. He has also reportedly breached the code of ethics of the European Central Bank.

Cuschieri is a representative of Malta on the ECB’s Supervisory Board.

The Malta Independent on Sunday asked the ECB whether it will be looking into the situation, whether it had asked for Cuschieri’s removal from the supervisory board, whether his actions had constituted a breach of its code of ethics and whether it was concerned that one of its supervisory members was involved in the scandal.

Replying, a spokesperson confirmed that Cuschieri has been a member of the Supervisory Board since February 2020 but said that, es per the ECB’s standard policy, the bank cannot comment on individuals.

The ECB issued a single Code of Conduct for high level officials in January 2019. Governing Council, Executive Board and Supervisory Board members are bound by the same code.

The code states that members and alternates “shall not solicit, and shall exercise caution when offered, any advantages which are connected in any way with the duties and responsibilities conferred on them.”

‘Advantages’ means any gift, hospitality, or other benefit, whether financial or in kind, which is not the agreed compensation for services delivered and to which the recipient is not otherwise entitled.

The code of conduct states that an advantage offered by one or more private entities or individuals can only be accepted if it has a value higher than €100.

Meanwhile, the MFSA said that its own code of ethics is an internal document intended only for consumption by employees and cannot be made public. This newsroom is informed that the MFSA’s code of ethics is modelled on the ECB code of conduct and is very similar.

The MFSA’s Board of Governors said Friday that it has initiated a fact-finding assessment on the facts reported in connection with the Las Vegas trip to safeguard the interests of the Authority.

“The review is to be conducted in the most transparent and ethical manner,” the MFSA said.

It reconfirmed that both Cuschieri and Licari had voluntarily suspended themselves “until all the necessary assessments are concluded, and a final decision is taken on both cases.”

Meanwhile, the MFSA announced that Christopher Buttigieg had been unanimously appointed by the Board of Governors as the Acting CEO of the authority.

The Las Vegas trip took place six months before Yorgen Fenech was named as the owner of 17 Black, a company that had been listed as a target client for Keith Schembri and Konrad Mizzi’s Panama companies and which was also involved in the Montenegro wind farm scandal, having made millions off the deal. Fenech was charged with masterminding the murder of Daphne Caruana Galizia a year later, in November 2019. He is currently being held in custody at the Corradino prison. The compilation of evidence against him is underway.