Suitcases in the night

Frustrated citizens took to the streets again this week to demand an end to the impunity that has smothered the country since 2013.

It was the first outbreak of large scale anti-corruption activism since December 2019, when the arrest of Yorgen Fenech and the sordid connections it revealed between top government officials, illicit deals and the brutal murder of journalist Daphne Caruana Galizia brought the country to a halt.

This latest protest was sparked by revelations by The Shift and the Daphne Caruana Galizia Foundation of a secret agreement signed with Azerbaijan’s SOCAR Trading, and the failure of law enforcement to act against Pilatus Bank, despite clear orders more than a year ago from a magistrate to prosecute.

If you’re new to Malta, you might be wondering what the fuss is about. After all, the veritable money laundering machine was shut down by the European Central Bank four years ago. Surely there are more imminent threats?

We have to turn the clock back to 2017 to understand why the scandal was so shocking — and why the government is determined to keep it under a rug already bulging with secrets.

It all began with suitcases in the night and a scene right out of a B-movie.

On the evening of 19 April 2017, journalist Daphne Caruana Galizia published a blog hinting that she knew who owned Egrant, a mysterious Panama company set up within hours of the Labour Party’s 2013 election to power.

The two other companies established alongside it belonged to then Energy Minister Konrad Mizzi and then chief of staff Keith Schembri, respectively, but the individual connected to Egrant was so sensitive that he or she would only be named over Skype.

The entire country held its breath, hitting ‘refresh’ until the update appeared. Everyone expected her to name prime minister Joseph Muscat, but she claimed Egrant’s ultimate beneficial owner was Muscat’s wife.

She said the related documents were held in a safe in the bank’s kitchen, where it was shielded from CCTV by EU Data Protection laws that forbid surveillance in employee break rooms.

Joseph Muscat ordered a revision of the ministerial code of ethics. Cabinet members no longer had to include assets owned by their spouses or underage children in their annual declaration. If Michelle Muscat really did own Egrant, as Daphne reported, it was distanced from the prime minister.

Minutes after the blog was published, Joseph Muscat sprang into action with an evening press conference filled with angry denials, calling it “the biggest political lie ever told in this country.”

He was curiously careful with his words. “We never signed any type of document which transfers shares of a company,” he said. “I have never signed, never been offered to sign…”

When asked whether he would call for an investigation, the prime minister declined. He would let the country’s institutions do their job. Meanwhile, his pet police commissioner nibbled rabbit in a distant corner of the island with his buddies and refused to comment.

That same night, Ali Sadr Hasheminejad was caught on camera by Net News slipping out the back door of Pilatus Bank with risk manager Antoniella Gauchi and beetling down the street with two heavy bags.

The reporter gasped a steady stream of questions as he struggled to keep up: “Do you work for Pilatus Bank? Why were you there so late at night?”

Ali Sadr stared straight ahead, dodging around corners with grim determination, crossing and recrossing the same empty street. His face only broke into a smirk when he dumped the bags into the boot of a car.

As he got in the passenger seat, he turned to his pursuer and said, “I have no idea what you’re talking about, and you’d better learn some English to ask some questions.” The reporter didn’t know the young man with the greased-back hair who’d just slipped away was the bank’s owner.

And then Flight Radar showed a chartered jet leaving Malta for Baku, Azerbaijan at 4am. The plane went from there to Dubai, where Egrant was alleged to have another account.

One week later, VistaJet — the company that carried out this empty “ferry flight” — was given €1 million in funding from Malta’s tourism budget on the direct order of the Prime Minister’s Office.

Once the goose had flown, Muscat confidently ordered a raid on the bank and a magisterial inquiry into the Egrant allegations. This sudden contradiction of his televised conference, held just hours before, was announced in a Department of Information press release issued in the middle of the night.

It all felt like a bad movie, and the nation was watching it live online.

And now here we are five years later, with nothing to show for it but the bulging 1,501-page report of a 15-month long magisterial inquiry conducted at a cost of €1.3 million, its terms carefully designed by the prime minister’s personal lawyer.

Its findings were meant to be inconclusive. At the bottom of page 1,384, Magistrate Aaron Bugeja notes quite clearly that “this inquiry was not set up to establish who owned the shares in Egrant Inc”.

He was only tasked with asking if evidence exists that they were “owned by Michelle Muscat or are otherwise attributable to her or her husband, the Prime Minister”.

Pay attention to the careful language. These were bearer shares, owned by whoever happened to be holding them. But that’s another complex story, and we don’t have time for it here.

Another separate magisterial inquiry was launched in November 2018, around the time Europe shut Pilatus Bank down. It wrapped up over a year ago, at a cost of €7 million, but little has been done to act on its findings.

Repubblika revealed the leaked conclusions of that report on Tuesday.

In it, the magistrate ordered police to prosecute several individuals, including Antoniella Gauci, the woman who helped Ali Sadr Hasheminejad remove those two bulging bags on the night Daphne published her famous Egrant accusation.

It also said the Egrant case is not “closed” despite Joseph Muscat’s insistence that he was exonerated. On the contrary, the magistrate ordered fresh investigations into the claims made by Daphne six months before she was killed.

More than a year after the inquiry’s conclusion, the police are still sitting on their hands, unwilling or afraid to slap the cuffs on the former employees of a mysterious private bank which may hold the key that unlocks a vast network of corruption.

And what of the judicial protest Repubblika filed to force police to abide by the magistrate’s order?

The case is being heard by Nadine Lia, daughter-in-law of Pawlu Lia, the lawyer who helped Joseph Muscat craft the terms of the Egrant inquiry.