Thursday, 11 August 2011

Financial Services Commission and Politics

Last Friday I visited the FSC website to see whether the much awaited statement on “Policy on Public Comment and Political Involvement” had been published. I found a tab on the site with that title but the page in question would not open. I then emailed the FSC to enquire about my inability to access the relevant page. I received a reply by return from Marcus Killick, the CEO of the FSC, to the effect that there was a glitch on the webpage, which his team would proceed to repair. He kindly emailed me the policy. I have raised a variety of issues and questions on it directly with the FSC. The policy can now be found on: 

My concern is not that I resigned from the FSC. I did not wish to remain on the FSC in disharmony, due to my continuing to write this blog.  Especially in circumstances that the FSC felt it should have a restrictive “Policy on Public Comment and Political Involvement”. I took this view, even though, throughout my appointment, I had publicly participated in public political comment on TV and the press. I had also campaigned prominently in the 2006 Constitution referendum as part of the "No Campaign".  I undertook all this public political involvement without complaint from anyone in the FSC or elsewhere. The primary reason for my resignation was that it was intended to open up the way for the FSC to introduce an objective, fair and transparent policy and allow me to continue blogging unhindered by any restrictions contained in that policy. I fear this has not been the result. 

The FSC “Policy on Public Comment and Political Involvement” seems to have been designed to conveniently cater for very specific circumstances and so, in my mind, fails to achieve that which I understood and was told was intended. The overall impression that I now have is that, intentionally or unintentionally, the policy permits FSC members to speak publicly in favour and in support of the Government but not against it. This cannot be right.

The overall focus of the policy that I have read seems to be to prevent the exercise by FSC members of the right to freedom of speech unhindered, save if any comment is made in support of the Government. This is, in my view, the most undemocratic ingredient of the FSC’s policy. To make matters worse, the policy does not deal with the core issue of “political involvement” of FSC members, beyond the extreme case of prohibiting a member from being an MP or holding an elected public office.

An FSC member is permitted, oddly, to hold a position within a political party so long as such position is not a particularly sensitive one or a high role in the party; further and in addition, so long as the position does not involve a member making public statements. Unfortunately this does not work. If an FSC member forms part of the Executive of a political party, he cannot disassociate himself from any public statement made by the relevant party. Additionally how can it be seriously argued that a person who is or has been a member of the Executive of a political party and an election agent is not engaged in or seriously connected to a political party and so involved in politics? If the party in question is in Government, it does not ameliorate the situation, it worsens it.

My view is that it is difficult, if not impossible, to find a half way house on the subject of “Public Comment and Political Involvement” by FSC members. The policy must be either an absolute prohibition (difficult in a small jurisdiction like Gibraltar which is littered with business, employment and family connections and with interlocking friendships) or not exist at all. The FSC functioned when there was no policy on the subject in question without any complaints of political bias or partiality. The reality is that the integrity of the members of the FSC’s and its mixed composition had the effect of balancing out views.

The effect of introducing a policy, on the terms published by the FSC, is that it has the attributes of the proverbial horse designed by a committee, which is a camel. I believe that the FSC needs to revisit this policy and decide what it wishes to achieve. Its aim and duty, as a regulator, is to be objective, fair and transparent. If this requires it to revert to having no policy or no prohibition at all on this subject, so be it.

There is one peripheral but related issue that I feel needs to be dealt with by the Government. The issue of whether the FSC should have a “Policy on Public Comment and Political Involvement” was prompted by an inquiry by the Chief Minister of the FSC Chairman. This inquiry in turn arose out of the FSC’s reaction to a criticism made by me in an email, circulated to and in defence of lawyers, expressing my view on events prior to the “Marrache affair” coming to light. In these and the overall circumstances, I suggest that it may be appropriate for an independent public enquiry to be held to inquire into all aspects of how and why what transpired in the “Marrache affair” was not uncovered earlier. It is likely that it is proper that the enquiry could and should not commence until after any criminal proceedings are finalised. However, there is no reason for the Government not to publicly announce, now, its intention to hold such inquiry.


  1. Robert

    Were you aware of the FSC's policy on public comment and political involvement at the time that you were appointed as a Commission Member?

  2. Anonymous at 23:07

    As I say, there was no policy at all. It was introduced this year following a request by the Chief Minister last year. In fact I was heavily engaged in the "NO Campaign" and have always written political letters to the press, even after appointment onto the FSC without complaint from anyone. The FSC knew for months that I was writing this blog without complaint. Once I was asked to delete some comments made about the FSC. So in that way they acquiesced to my writing the blog so long as it made no reference to the FSC

  3. Financial Services Commission and Politics

    RV another 100% blog said. (The overall impression that I now have is that, intentionally or unintentionally, the policy permits FSC members to speak publicly in favour and in support of the Government but not against it. This cannot be right)
    There are actually two potential conflicts of interest when serving directors are also industry regulators. Obviously there is the possibility that a director regulator could influence the regulatory body in favour of their own, unconsciously or not. There is also the possibility that a director regulator influence the regulator, unconsciously or not, in a way that's detrimental to their competitors. How many business owners would accept regulation by their competitors? Or is that the done thing in Gibraltar.

    "When are Gibraltarians going to wake up to reality?" Never, I'd say. Maybe it's time the Gibraltarians voters wake up to reality. They have their chance in a couple of month’s time. Will they take it? I doubt it, but who knows ... stranger things are happening.


  4. The lack of foresight of politicians wherever they come form is the cause of all our problems.


  5. Have been asked by a friend the following and would like info since cannot find anything on the Gibraltar government wed site.

    his question.

    Do I need to register with the OFT in Gibraltar ?

    The OFT requires all its supervised businesses to register. The following types of business are supervised by the OFT and will need to register:
    Estate agents - those engaged in estate agency work as defined by Section 1 of the Estate Agents Act 1979.
    Consumer Credit Financial Institutions (CCFIs) - businesses carrying on consumer credit lending activity who are neither authorised by the Financial Services Authority (FSA) nor money service businesses supervised by Her Majesty's Revenue and Customs (HMRC).
    Those businesses which only provide credit by introducing the borrower to a third party financial institution (ie credit brokerage) do not need to register.

    Failure to register could lead to the OFT imposing a civil penalty or taking a prosecution if the supervised business continues to be carried on while the business is unregistered - see Interim penalty policy (pdf 190kb). Prosecution could result in a sentence of up to two years in prison and/or an unlimited fine.

    Please note that the Money Laundering Regulations and the registration process is separate from other roles performed by the OFT, such as consumer credit licensing.

    The above is based on UK


  6. OFT

    No there is nothing similar in Gibraltar. It is a significant deficieny.

  7. Among the members of the Commission are Joseph Caruana the head of an accountancy firm and company / trust manager,Franco Cassar the manager of a bank, Nigel Feetham a lawyer in a firm which is closely associated to a company / trust managerand Joseph E (Melo) Triay who part owns a company / trust manager. So, all these gentlemen are connected to Commission regulated companies; Caruana and Triay are related to the Chief Minister and Feetham is the brother of the minister of justice and has been or still is in the executive of the GSD. I am sure that they are all good men and true but possible perception of conflict of interest caused by their membership of the FSC is one of the reasons why many in the industry think that the Commission lacks credibility. Supporters of the GSD who proclaim that they uphold Gibraltar's reputation and integrity are undermined by this perception of the FSC. Will Fabian Picardo give a manifesto commitmant to stop this?

  8. Robert

    Did the content of the e-mail that you sent to colleagues actually critisise the FSC for not identifying problems prior to its actual intervention in the "Marrache Affair"?

  9. anon @ 11.00.....

    what a joke! You are absolutely right. Where is the integrity and non conflict?

    Its true, its only allowed when it suits the CM!

  10. Cat got our tongues?

  11. How compatible is the content of the letter in yesterday's Chronic (12.8.11), titled 'Singing the Praises' (of the CM), co-signed by an FSC member who acted as election agent for the GSD at the last general election and who (in the absence of a public denial) is assumed to continue to serve on the GSD's executive committee, with the FSC's 'Public Comment and Political Involvement' guidelines?

  12. If there is such an enquiry into the Marrache affair, will it be overly sobering for the FSC to handle do yu think?

  13. Anonymous at 10:18

    Yes but only in regard to what was in the public domain.

    Anonymous at 19:39

    Now that is an interesting question. The person that you refer to is Nigel Feetham. The answer is ... it depends on how various questions are answered. I posed these to the Chairman of the FSC before that letter was published. He is the arbiter under the Policy, so lets wait and see ...

    Anonymous at 19:58

    I think it is only fair to have an open mind and see what the results of such an enquiry are but I doubt that such an enquiry will be ordered.

  14. It looks like the FSC member has made a public statement, now what?

  15. Its quite scary to see the lengths that this government will go to quash the voices of dissent, and now they want permission to snoop into our phone calls, texts, emails, etc.

    How do we know that these powers will not be abused to, for example, find out who I might be posting this under anonymous?

  16. Civil service reform in developing countries
    From Wikipedia the free encyclopedia.

    Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representativity and democratic character of a civil service, with a view to promoting better delivery of public goods and services, with increased accountability. Such actions can include data gathering and analysis, organizational restructuring, improving human resource management and training, enhancing pay and benefits while assuring sustainability under overall fiscal constraints, and strengthening measures for public participation, transparency, and combating corruption.

    Important differences between developing countries and developed countries require that civil service and other reforms first rolled out in developed countries be carefully adapted to local conditions in developing countries.

    1 References
    1.1 Data and Diagnostics
    1.2 Structure of the Public Sector
    1.3 Personnel Management
    1.4 Combating Corruption
    1.5 Issues for Reform
    1.6 Engaging support for reform

    Gib uninterested.

  17. Gib Uninterested what is your point?

  18. I mean we don't develop; if what RV writes is wrong why don’t they take legal action i find his blog very interesting and have become more aware of our failings, we are out of the world democracy prose's static instead of developing, one man PRC controls government, committees, commissions financial services everything including government departments that to me is dictatorial making us another banana republic
    Honourable S

  19. Public service has an independent role in maintenance and development of democracy.

    In all democratic nations citizens have a set of rights, which are no longer subject of debate. Development of democracy in such areas occurs through increase in right satisfaction.

    In all democratic societies there is for example a standard that women should have equal access to work, advancement and equal wages for work of similar value. Yet there is not a single country in which that set of norms is fully met.

    This is just one example of many in which public servants should act “with all the deliberate speed” in order to close the gap between the normative statements and the social, political and economical reality.
    Leadership of public servants (particularly those in positions of management) should not be limited to preparation of the next year budget, but creating policies, which will indicate to citizens that the promises of democratic theory are being realized.

    Citizens Don’t Expect Overnight “Miracles“but can and should expect that the system as a whole moves towards fulfillment of the lofty promises. Democracy desperately needs increase in credibility. Public servants should avoid participation in propaganda without substance, but concentrate on the delivery of equality of all citizens.


  20. Gib uninterested@22:45

    You should have read the Wikipedia definition of Developing Countries first

    "Developing country” is a term generally used to describe a nation with a low level of material well-being.

    Now what's your point.

  21. Anon@22:38

    It is not this Government that wants access to our phone calls, texts, emails, etc. It is the RGP asking the Government to pass legislation that will enable them to do so.

    Get your facts right before you panic.

  22. Lawless@00:50

    On equality of the sexes. Do you not think that the public servants that you mention should also address the unfairness suffered by males that can only access State Pension at age 65 whereas females receive it at 60.

    Now there's a hornets' nest.

  23. If you read 00.50 again i do say the following.

    THIS IS JUST ONE EXAMPLE OF MANY in which public servants should act “with all the deliberate speed” in order to close the gap between the normative statements and the social, political and economical reality