Reacting to news revealing the mysterious owner of Dubai company 17 Black last week, Prime Minister Joseph Muscat said he will not take any action until the magisterial inquiries into the Panama Papers revelations are complete. There are two fundamental problems with this.
The first and most obvious is that political responsibility is distinct from criminal liability. Criminal prosecutions and inquiries take years to establish criminal liability or culpability.
Political responsibility is not something determined by a criminal inquiry or the courts but stems from respect to public office. No country other than a banana republic permits ministers or senior government officials to remain in office while they are reasonably suspected of money laundering and bribery and meant to be under police investigation.
The reason why the police appear reluctant or unable to act is the same reason why Tourism Minister Konrad Mizzi and the Prime Minister’s chief of staff Keith Schembri are still there, and seemingly protected by Muscat.
The second relates to the criminal process. Even if one were to ignore political responsibility (and one does this at great risk), there are others who ought to take action.
The police are obliged to investigate crimes such as money laundering and bribery, irrespective of any magisterial inquiries – in the normal course of events these would happen in parallel. But it’s more than that.
The police and the Attorney General (AG) also have the power, and the evidence, to prosecute Mizzi, Schembri, and the chief executive of the Tumas Group Yorgen Fenech for, at the very least, attempted money laundering and bribery. They can and should bring a prosecution ahead of the magisterial inquiries.
A probe by The Times of Malta and Reuters revealed on Friday that 17 Black is 100% owned by Fenech. The Tumas Group is a partner in the gas power station pushed by Muscat and Mizzi in the 2013 election.
Leaked emails had shown that 17 Black was set to pay Mizzi and Schembri’s companies €150,000 a month. They showed that 17 Black was one of two sources of income for the Panama companies Hearnville and Tillgate, set up by Muscat’s consultants Nexia BT for Mizzi and Schembri a few days after they assumed office in March 2013.
Journalist Daphne Caruana Galizia had exposed the company in February 2017, saying it was connected to Maltese politicians. She was assassinated in October 2017, before completing her investigation.
Muscat said last week that he first heard of Fenech’s involvement in Dubai company 17 Black when he was recently asked about it by Reuters. This is unlikely, considering the Financial Intelligence Analysis Unit (FIAU) and undoubtedly the police have had this information since spring after it was requested from the Latvian FIAU.
In September, PN Head of Delegation MEP David Casa called on Moneyval to investigate the FIAU handling of information about 17 Black, saying the agency had known the ultimate beneficiary owner since spring but taken no action.
Moneyval – the Council of Europe’s permanent anti-money laundering monitoring body – is currently evaluating Malta’s compliance with anti money laundering laws and their enforcement.
As the Head of Government, Muscat can take action by demanding the resignations of Mizzi and Schembri, and calling for the prosecution of Mizzi, Schembri, and Fenech.
Instead, Muscat said he will wait for the completion of the magisterial inquiries. Yet Muscat is one out of at least seven, including Mizzi and Schembri, who are blocking the opening of the only inquiry covering 17 Black.
Let this sink in: The inquiry that Muscat is saying must be complete before he takes any action is the very same one that has yet to start because he – and others including those meant to be under investigation – are blocking and delaying. This farce has been going on for over a year now.
There are another two pending inquiries but these do not relate to Mizzi or 17 Black.
These inquiries were called by former Opposition Leader Simon Busuttil precisely because there was no police action on evidence of money laundering and bribery involving Mizzi, Schembri, Nexia BT’s Brian Tonna and Karl Cini, Schembri’s associate Malcolm Scerri, and Adrian Hillman, former Managing Director of Allied Newspapers.
Each suspect filed separate appeals against a magisterial decision to start an inquiry into their activities. The appeals were assigned to Labour MEP Marlene Mizzi’s husband, Judge Antonio Mizzi who refused to recuse himself due to conflict of interest. The process that followed meant the case has remained stalled without the inquiry even starting.
Meanwhile, Mizzi and Schembri will continue to say that the companies have been dissolved, which they were after Caruana Galizia exposed them. 17 Black changed its name to Wings Development.
Mizzi and Schembri will also continue to say that these companies never received funds. But even if it true, it is irrelevant.
The crime of bribery under Maltese law – Criminal Code, Art 115(1) – does not require the actual payment of money. Accepting a promise or offer of an illicit reward in order to take or not take an action is as serious as accepting the reward.
The evidence that exists provides reasonable suspicion of bribery or, at the very least, attempted bribery:
- the promise – $150,000 per month
- documented plans for that money to be paid into Mizzi and Schembri’s own companies
- Nexia BT both selected Electrogas and set up Mizzi and Schembri’s companies and acted as auditor for Fenech’s Electrogas holding company (New Energy Supply Ltd).
A series of decisions point to further favourable treatment of Electrogas, such as:
- lack of proper financial due diligence on Gasol plc and permitting its exit from the consortium when it went insolvent,
- permitting alteration of plans from land-based gas tanks to a permanently moored Floating Storage Unit,
- help with OHSA inspections and emergency State-backed guarantees even if none of these were ever mentioned in the original expression of interest.
The revelations have sparked calls for resignations and investigations. Opposition Leader Adrian Delia said the Prime Minister had no choice but to ask them to step down. The Labour Party’s reply was that “the reports are just allegations“.
Restoring faith in Malta’s democracy and institutions demands no less than prosecuting Mizzi, Schembri, and Fenech. It also demands political responsibility. This persistent distortion and failure to shoulder responsibility has sired impunity in Malta.