Malta, We Have a Problem

National Whistleblower Center Executive Director Stephen M. Kohn, in cooperation with the European Center for Whistleblower Rights, has called upon Malta’s Prime Minister Joseph Muscat and the Group of States Against Corruption (GRECO) to protect whistleblower Valery Atanasov.

A former IT administrator at the Malta Gaming Authority (MGA), Mr. Atanasov blew the whistle on dodgy regulatory practices that could have allowed gaming companies to operate without proper oversight. Atanasov explains that some MGA practices “create[s] conditions that allow suspicious financial operations, money laundering, and other criminal practices.”

Kohn’s call to protect Mr. Atanasov has made waves in Malta. The popular publication Lovin Malta notes that Kohn is “one of the most eminent whistleblower lawyers in the United States,” and refers to NWC as the “USA’s leading NGO for whistleblowers.”

The piece also covers the MGA’s press release responding to Kohn’s letter. In the press release, the MGA claims that Atanasov’s statements were “factually and legally false and incorrect.” It also states that the MGA “respects Mr. Atanasov’s request for whistleblower status and will abide by any final and definitive judicial declarations.” To date, the MGA has not formally recognized Atanasov’s status as a whistleblower.

Both the EU and Malta must do better to protect whistleblowers. Kohn has demanded that “the Office of the Prime Minister immediately review the case of Mr. Atanasov,” and insisted that the GRECO “monitor the case of Mr. Atanasov and ensure that the Republic of Malta is following the legal requirements set forth in the Civil Law on Corruption and Malta’s Protection of the Whistleblower Act.”

For now, the Atanasov affair remains a concern of Maltese and European legal jurisdiction. But the United States’ Foreign Corrupt Practices Act permits the U.S. to exercise extraterritorial jurisdiction, and can cover non-U.S. citizens making bribes to foreign officials. Moreover, the law is not just about quid-pro-quo bribery—it also protects against false financial records and a lack of proper internal controls. International whistleblowers can file reports with the U.S. Securities and Exchange Commission (SEC) and receive significant financial rewards for doing so.

The U.S. Internal Revenue Service (IRS) (the tax collection agency) also rewards international whistleblowers who report on American tax avoidance. The rewards for such crucial information can be enormous. In 2012, Bradley Birkenfeld received the largest whistleblower reward ever at $104 million for uncovering tax fraud by the Swiss bank UBS. Birkenfeld’s lawyer was Stephen Kohn.

Whistleblower rewards, however, are only a means to an end. The purpose of rewards and protections for whistleblowers is to encourage other people to come forward when they uncover illegal activity.

Malta, largely known as a sunny, historical Mediterranean paradise with a loosely-regulated and low-taxed economy, has struggled with corruption for years. Daphne Caruana Galizia, a prominent Maltese journalist covering corruption, was murdered by a car bomb on October 16, 2017, in what has been called the “darkest moment in the country’s political history.” She devoted her career to uncovering bribes, money laundering, and disturbing connections between the country’s online gambling industry and other crime

For a nation struggling with allegations of corruption and misconduct, stronger whistleblower laws could greatly remedy many of the Malta’s governance issues. The country could take a big first step in the right direction by protecting (and rewarding) Mr. Atanasov for having the courage to come forward in an environment that is historically hostile toward those who reveal corruption.

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