The European Parliament’s Pegasus spyware committee is grilling the European Commission about what it intends to do about Malta’s refusal to answer its questions about its use of spyware and the legislation governing its use, authorisation and supervision.

Malta’s refusal to answer the questions of the EP’s ‘Committee of Inquiry to investigate the use of Pegasus and equivalent surveillance spyware’ came as the Committee exposed global spyware chiefs’ growing interest in Malta, its cash for passports programme and its welcoming company registration regime.

Many have established their businesses in Malta and others still have acquired or are seeking to acquire Maltese citizenship

PEGA Committee Chair Dutch EPP MEP Jeroen Lenaers on Thursday asked, on the Committee’s behalf, the Commission to take action against Malta for its refusal to answer its questions that have been pending since 17 July.

The Committee has reported that Malta – along with the Netherlands, Czechia, Denmark and Italy – has totally failed to fulfil its “duty of sincere and loyal cooperation” in that it has supplied no responses whatsoever.

Malta completely ignoring the Committee’s questions, according to Lenaers, is “unacceptable when we are asking simple, straightforward questions that any government should be able to answer. We are not asking for state secrets.

“Hundreds of millions of Europeans that we represent deserve answers, which are very difficult to give if the governments that purchase and use this software refuse to answer even the most basic questions. This is a scandal.”

The Committee is now asking the Commission to take against Malta for breaching its duty of ‘sincere and loyal cooperation and when it will take action to address the “violation”.

Financial Services Commissioner Mairead McGuinness, however, stressed the Commission does not have the competency to evaluate individual cases, but added this does not mean Member States can claim national security to avoid EU law.

According to the Irish commissioner, the European Court of Justice makes it clear that Member States need to demonstrate that national security, in specific cases, stands to be compromised if it were to comply with such a request from parliament.

She added that the Commission is well aware of the concerns raised in the Committee’s draft report, but has no information on the questions sent to Member States and, as such, it cannot comment on the failure of sincere and loyal cooperation.

In the recent draft report on the growing spyware scandal the Commissioner referred to, the Committee singled out Malta as “a popular destination for some protagonists of the [global spyware] trade.”

Key spyware figures converging in Malta

The Committee’s investigations have found that several key figures from the global spyware trade have registered a business in Malta or have acquired Maltese passports.

The Committee’s report names Intellexa spyware consortium founder Tal Dilian. Dilian, who had a career in the Israeli Defence Force, acquired Maltese citizenship in 2017 and co-owns what appears to be a shell company registered at an apparent fiduciary firm in Malta, according to research conducted by The Shift News.

The infamous Predator spyware is sold through Intellexa – a consortium of spyware vendors set up by Dilian in Cyprus – that has presences in Cyprus, Greece, Ireland, and France.

The spyware, like Pegasus, is alleged to have been used by governments in the EU and across the world to hack into the phones and access the data of journalists, politicians, NGOs and public officials.

The report also names Russian-Israeli citizen and former Israeli military engineer Anatoly Hurgin of Pegasus spyware scandal notoriety, who acquired Maltese citizenship for himself and three family members in 2015.

The EP report noted specifically how, “At the time of his application for a Maltese passport, he was already under investigation for various crimes.”

The draft report goes into detail about how as the founder of Ability Ltd, which cooperated with NSO Group on the Pegasus spyware, he handled the network side of operations at NSO. MEPs recalled that, in 2017, Ability Ltd had been placed under investigation by the US Securities and Exchange Commission for allegedly lying about its finances and that it had also nearly been delisted from the NASDAQ.

Former Intellexa owner and employee, Greek national Felix Bitzios, who was meanwhile involved in the Piraeus/Libra fraud scandal, is a director of a Malta-based company, Baywest Business Europe Ltd. That company, in turn, is 99.9166 per cent owned by a company of the same name registered in the British Virgin Islands, according to The Shift’s research.

The report also mentions the Malta-registered Baywest Business Europe Ltd legal representative Stanislaw Szymon Pelczar Ltd as being the former administrator of Krikel, which was mentioned in the Paradise Papers.

 Thiel, Kurz, Facebook, Cambridge Analytica and Malta

As has been well-documented, American billionaire Peter Thiel has applied for Maltese citizenship. The EP committee’s report goes to some length to spell out the connections between the well-known Donald Trump sponsor, the spyware trade and Malta.

It notes how Thiel – the founder of PayPal alongside Elon Musk –hired former Austrian Chancellor Sebastian Kurz as a strategist. It also notes that Thiel filed his Maltese passport application shortly after the announcement of a partnership between Kurz and former NSO chief executive officer Shalev Hulio.

Thiel was the first outside investor into Facebook, and the report highlights how he was also the founder of Palantir, which was connected to the Cambridge Analytica scandal, in which the data of Maltese citizens was the most harvested, pro rata, in the whole of the EU.

In all, the personal data from more than 6,000 Maltese Facebook users was shared via the analytics firm, Facebook confirmed with then-EU Justice Commissioner Vera Jourova in April 2018.

Such data was collected through mobile applications across much of the EU, the UK and the US and was used as a “psychological warfare tool”, according to the political scandal’s whistleblower, in the electoral campaigns of Donald Trump in 2016 in the US and of Joseph Muscat in 2013, among others.

In 2019 the UK’s Parliamentary Committee for Digital, Culture, Media and Sport confirmed links and dealings between Cambridge Analytica’s SCL Group, Malta’s cash for passports concessionaire Henley & Partners chairman Christian Kalin and Joseph Muscat as early as before the 2013 Maltese elections.

The Committee’s report found, “We understand that SCL certainly had meetings in Malta and that Christian Kalin of Henley & Partners was introduced by SCL to Joseph Muscat in 2011, and that Christian Kalin met with both political parties before 2013.”