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Cover your assets: Minister Konrad ‘I earn less but I spend more’ Mizzi

While Panama Papers Minister Konrad Mizzi states in his declarations that his income and net wealth have decreased steadily since 2014, his declarations show that he has been spending more than he’s been earning since 2016.

Ever since Panama Papers broke in 2016, Minister Konrad Mizzi has become almost synonymous with declarations of assets since he was the only EU Minister to be exposed in the international scandal, and yet he continues to serve as a Minister handed negotiations on major deals involving State assets under Joseph Muscat’s government.

Mizzi’s declarations of assets over the years raise a number of questions. While he states in his declarations that his income and net wealth have decreased steadily since 2014, they also show that he has been spending more than he’s been earning since 2016, when his company in Panama was revealed.

The Shift News has probed seven years of asset declarations by Maltese Ministers and Parliamentary Secretaries, led by the news that Prime Minister Joseph Muscat’s bank balance of €75,000 has remained materially unchanged for four years running.

It emerged that all Ministers and Parliamentary Secretaries did not table their 2016 declarations. These should have been tabled in 2017 – the year that saw continued revelations on the Panama Papers, a snap election, a messy PN leadership election and Daphne Caruana Galizia’s assassination.

For the rest of the years, the public is presented with one-page scrawled declarations that fail transparency requirements. They include no value for the properties listed, no details of shareholdings in companies (when the name is even correct), no names of banks (so a bank balance in Cyprus or Dubai would not show up) and no values of investments, while liabilities are limited to bank borrowings.

Maltese asset declaration requirements are already low, but since 2015 the details of spouses’ assets and income became ‘optional’, and most took it up.

Mizzi stands out. Beyond the obvious references to Hearnville Inc in Panama and Rotorua Trust in New Zealand, after he was exposed, his declarations of assets raise a number of other questions.

His 2014 declaration of assets, published the following year, reflects his assets as at 31 December, 2014. But his declaration is actually backdated to 2 March, 2014 – that’s 19 days before the date of his previous declaration for 2013 (on 20 March, 2014). It is not clear whether this discrepancy was ever queried.

Had this declaration been correctly dated 2 March, 2015, Mizzi would have likely signed it in Montenegro (according to the leaked 17 Black FIAU report showing his location around that time).

Only 16 days later he would have been signing preliminary agreements in relation to Vitals.

Three months later he would have been signing Mossack Fonseca documentation to ‘activate’ Hearnville Inc and Rotorua Trust, exposed in the Panama Papers.

Konrad Mizzi + Sai Mizzi + Michelle Muscat
Michelle Muscat with Minister Konrad Mizzi and his wife Sai Mizzi at the after party held following the contested 14km swim for the Prime Minister’s wife’s controversial Marigold Foundation.

In 2016, Mizzi had said that his costly Panama company (Hearnville) and New Zealand Trust on top of it (Rotorua) were set up by Nexia BT and Mossack Fonseca to receive income from this house in London and “for the money [he] declared in [his] parliamentary declaration”.

A leaked FIAU report had found that Mizzi’s declaration ‘over declared’ the amount of deposits he actually had. The Egmont Group note that officials over declaring assets is often a red flag for anti-corruption investigators since it is frequently used to cover for a anticipated ill-gotten gains.

According to UK real estate websites, his Blackheath property is now worth around £569,000 (bought for £365,000 in 2010, close to 56% increase in nine years).

Konrad Mizzi London property
Konrad Mizzi’s house in Blackheath, Greater London, which is around 1 hour by Tube from Piccadilly Circus appears to have stopped bringing in rental income. Source: Google Maps

On the other hand, mirroring the frothy property market in Malta, his Sliema seafront apartment is probably his biggest asset.  Comparable Tower Road flats are now valued at €1.15 million.

Mizzi bought the flat for €380,000 in 2013. The value reflects a 203% increase in six years.

Mizzi’s declarations of assets over the years tell another story. Konrad Mizzi’s self-declared bank balance and income appear to have peaked at €389,440 in 2015 and €76,000 in 2014 respectively.

At that point, he still had to declare the income and assets of his spouse, Sai Mizzi, who was receiving a salary for €13,000 a month for a job on which nobody is quite clear. While she told the Maltese public to judge her on what she achieved, the country is still waiting.

Mizzi is, on paper, perhaps the only Minister to see his income and net wealth decline so steadily. In fact, in 2018, Mizzi’s income shrank to almost €63,000 which appears to be the base salary for a Minister without other income such as, for example, rent from his house in the outskirts of London.

Konrad Mizzi’s house in Blackheath, Greater London, which is around an hour by Tube from Piccadilly Circus, appears to have stopped bringing in rental income.

His expenditure, on the other hand, appears to have ballooned. Mizzi managed to fritter away around €150,000 in 2018. This being the sum of the drop-in bank balance (-€98,930) and his entire income for the year (€62,978.71) less the amount repaid on the mortgage for his Sliema seafront apartment (-€9,089).

Although the declaration of assets for 2016 was not published, MP declarations filed in Parliament indicate that this trend of declaring that he is “spending more than he is earning” started in 2016.

Take a look at what we’re dealing with in this series. And we’ve made it easy for you to review Konrad Mizzi’s asset declarations over the years here.

Next in the series: Economy Minister Chris Cardona here.

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