A low, dishonest decade

“Uncertain and afraid of a low dishonest decade,” WH Auden wrote in his poem 1st September 1939 as the world plunged into World War II. He expressed “the waves of anger and fear” as he smelled “the unmentionable odour of death”.  Like Auden, we witness the lethal military aggression of a hostile European country against its weak neighbour. Like Auden, we smell “the unmentionable odour of death”.

The heartbreaking scenes of the desperate and ultimately futile attempts to resuscitate a six-year-old girl, still wearing her pink jacket, will linger long in Ukraine’s collective memory.  The girl was with her parents when a Russian shell struck. Her mother wept while her father, covered in blood, held her hand. As the girl took her last breath, the doctor resuscitating her shouted at the journalist witnessing the tragedy, “show this to Putin”.

On 26 February, in an attempt to dissuade Putin from pursuing military hostilities, leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States issued a joint statement: “We commit to taking measures to limit the sale of citizenship that lets wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems.”

Portugal suspended golden visas for all Russian citizens. Bulgaria and Cyprus have committed to ending the sale of passports. But here in Malta, Labour flatly refused to halt Maltese passport sales to Russians until its arm was twisted. For Labour, only money matters. Parliamentary secretary Alex Muscat declared that “the due diligence that we do is found nowhere in the world, we train other countries in due diligence”.

The truth is very different. An EU Observer report referred to our country as “Maltanistan” because of the huge number of Russian citizens acquiring Maltese passports. Among that list were Igor Khudokormov and Leonid Levitin, two Russian offshore banking tycoons named with Konrad Mizzi in the Panama Papers leak.

Another three Russians who bought Maltese passports were part of the so-called “Kremlin list”, Russia’s wealthiest business people, including some of those closest to Putin.

Arkady Volozh, the founder of Yandex, a Russian Uber type firm; Boris Mints, a real estate former billionaire businessman (Forbes list in 2017) named by the US in the Countering America’s Adversaries Through Sanctions Act;  and Alexander Nesis, another Russian billionaire, founder of an equity firm investing in finance, precious metals and engineering.

In 2015, over 56% of all new Maltese passport buyers were Russian. The list of shady Maltese-Russians is long – Alexey Marley, former CEO of Alfa Bank Russia, the country’s largest private lender; Aleksi de Monderik, co-founder of Kaspersky Lab; Alexander Mechatin CEO of Beluga Group, Russia’s largest spirits company; Dimitry Semnikhin, a media millionaire; Alexander Rubanov, energy firm executive; Roman Trushev, an oil and gas magnate; Andrei Gomon, a transport magnate; Alexey Kirienko, an investment broker; Dmitry Lipyavko, a petroleum tycoon; Andrei Melnikov, a cobalt and uranium magnate; Anatoly Loginov, the owner of an online payment systems firm.

Anatoly Hurgin was arrested for fraud and money laundering in the US. Pavel Melnikov was arrested in Finland with a hidden stash of €3.5 million in a money laundering investigation.

The rapid massive influx of Russians poses serious questions about Malta’s due diligence in rooting out fraudsters and other undesirables. The Russian branch of Transparency International said Malta’s passport scheme “created additional opportunities for corrupt officials” and allowed “laundering of huge sums of money” and “reputation laundering”.

In 2017, the Office of the regulator found that Identity Malta did not highlight red flags to the minister when recommending applicants. Potential serious issues weren’t even mentioned. Identity Malta had wide discretionary powers and could even nominate persons with a criminal record, those providing false information or subject to a criminal investigation to the minister for a Maltese passport. That was Malta’s due diligence.

When Joseph Muscat was interviewed by the BBC in January 2018 he dismissed assassinated journalist Daphne Caruana Galizia’s allegations about passport sale kickbacks as “false” and “dubious social media gossip”. Keith Schembri and Brian Tonna were eventually arrested in 2020 in connection with an investigation over €100,000 in kickbacks from passports sold to Russian nationals.

When three Russian nationals bought their Maltese passport through the now-defunct Nexia BT, they wired €166,831 to Tonna’s Willerby Trade Pilatus bank account. €100,000 were then transferred to Schembri’s Pilatus bank account. Despite the FIAU’s conclusions that there was “reasonable suspicion of money laundering and/or the existence of proceeds of crime” no action was taken for years.

During that period, a certain Alex Muscat was Joseph Muscat’s deputy chief of staff, answerable to Keith Schembri. Alex Muscat was named by Henley and Partners as the contact person inside the Office of the prime minister. Henley’s CEO Eric Major identified Muscat as the person “to assist us in minimising disruption or grief when high profile clients come to Malta”.

No wonder so many of those Russians who passed Malta’s amazing due diligence have been investigated or arrested for serious criminal activities.

During that same period, Alex Muscat, the deputy chief of staff, was also being paid thousands of euro by Brian Tonna, the man who set up Mizzi’s and Schembri’s offshore opaque financial structures. Both Schembri and Alex Muscat were paid thousands of euro by Brian Tonna while they worked at OPM – for what?

Yet when Robert Abela became ‘continuity’ prime minister, Alex Muscat, Schembri’s right-hand man, was promoted to junior minister for citizenship instead of being sacked.  Malta is now facing infringement procedures at the European Court of Justice for refusing to shut down its golden passport scheme.

Commission President Ursula van der Leyen reiterated her calls to stop the scheme on her visit to Malta last year, saying passport sales violate EU treaties, expose the whole EU to infiltration by organised crime, money laundering, corruption and tax evasion.

But the clueless Alex Muscat insisted “we won’t budge” and that “citizenship is a national competence”. Muscat has since diverted €3 million in passport funds into his own electoral district.

Even as Putin kills and maims in Ukraine, Alex Muscat and Robert Abela continue to defy decency and worship mammon. Their greed destroys European security, European values, European lives. We can only plead, “show this to Abela”.

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