US State Department’s ‘rare rebuke’ indicates US ‘has lost patience’ with Malta

The travel ban imposed by the US Department of State on disgraced former public officials Konrad Mizzi and Keith Schembri was described as “a rare rebuke of an otherwise friendly country” by a former diplomat consulted by The Shift.

“The State Department doesn’t sanction just anyone who is suspected of significant acts of corruption. It only does this when the prospects of domestic prosecution are weak. This is why we only read about cases from countries with high rates of impunity,” the former diplomat stated.

The message being sent, according to the source, is that the US has lost patience with Malta’s investigations into these extremely serious cases of corruption, and they expect results. This was also confirmed by comments sent to The Shift by the US Embassy a day after Schembri, Mizzi and their families were banned from traveling to the US for their involvement in corruption.

Separately, the Financial Action Task Force (FATF) greylisted Malta earlier this year, with one of the main reasons being the lack of high-level prosecutions for money laundering offences.

The former diplomat pointed out that, should Maltese police fail to act on Mizzi and Schembri, an American connection to a corrupt hospitals deal orchestrated by Konrad Mizzi may enable charges to be filed in the United States under the Foreign Corrupt Practices Act (FCPA), where bribing foreign officials comes with prison terms and fines of up to $21,663 per violation.

The State Department’s official statement about Mizzi and Schembri being publicly designated singled out the Electrogas deal, which led to the privatisation of Malta’s power station, as one example of acts involving “significant corruption” which bore the signature of Mizzi as energy minister and Schembri’s involvement as former chief of staff to the prime minister.

The former diplomat’s comment on the deal which led to the sale of three of Malta’s public hospitals to Vitals Global Healthcare and later, Steward Healthcare, suggests that the US’ scrutiny of Malta’s affairs is not singularly limited to the Electrogas deal and may be extended to the €4 billion hospitals concession.

Who else is on the list?

A look at the State Department’s public designations list reveals that it mostly comprises individuals who have carried out serious crimes in corrupt countries, including the former prime minister of Albania and Slovakia’s former prosecutor general, as well as individuals associated with the murder of Saudi journalist Jamal Khashoggi.

Besides officials from Albania, Slovakia, and Saudi Arabia, public officials from Iran, Ukraine, Paraguay, Bulgaria, Namibia and Honduras also made the list. Transparency International awards a score for each country based on its levels of perceived public sector corruption.

A look at Transparency International’s Corruption Perceptions Index for 2020 shows that while Malta slid downward towards number 52 on the list, the other countries on the US’ public designation list fared worse.

This, linked with the fact that corruption ensures that high-level officials such as Schembri and Mizzi do not face prosecution for their crimes, adds more weight to the former diplomat’s statements to The Shift that the list is reserved for countries in which “prospects of domestic prosecution are weak”.

While Malta ties with Saudi Arabia, a country known for severe human rights abuses, at 52^nd place, both countries are immediately followed by Namibia in 57^th place and Slovakia in 60^th place.

While Saudi Arabia’s public designations were limited to individuals accused of being involved in Khashoggi’s assassination, Slovakia’s former prosecutor Dobroslav Trnka was, similarly to Mizzi and Schembri, designated for involvement in corrupt acts.

On 31 October 2019, the Organised Crime and Corruption Reporting Project (OCCRP) obtained video evidence of a meeting between Trnka and the man who allegedly masterminded the murder of investigative journalist Ján Kuciak, Marian Kočner. OCCRP’s extensive reporting has helped expose Kočner’s extensive influence over Slovakia’s entire judiciary system.

In a recent interview with Matthew Caruana Galizia, The Shift outlined how Albania has failed to carry out an investigation into how the bomb which was used in the journalist’s murder was brought to Malta.

Taylor, who lives and works in Albania, has documented the country’s failure to curb the spread of organised crime, describing it as a prime location for domestic and international money launderers, a source and transit for human trafficking, and a leading exporter of illegal drugs.