The new government-nominated Financial Intelligence Analysis Unit Chairman Kenneth Farrugia – who has also been handpicked as the Malta Financial Services Authority’s CEO with a €175,000 salary – would not reply to questions about a never-ending police investigation, code-named Operation Green, when he appeared before Parliament’s Public Appointments Committee today.
He also denied claims that he was involved in a deal with the US government concerning Pilatus Bank owner Ali Sadr and related money laundering activities.
During a long grilling before the Committee over his new nomination, Farrugia also criticised his predecessor at the FIAU, Manfred Galdes, over the way he tackled the Pilatus Bank debacle.
According to Farrugia, it had been a mistake for Galdes to have ordered a second inspection at Pilatus after it was found in breach of the rules several months earlier.
He said that during the second inspection, it was difficult to compare new findings to earlier evidence as it had not been properly documented.
He insisted that the situation became even more complex with Galdes’ resignation three days after ordering the second inspection.
Insisting that he had full confidence in the FIAU’s deputy director Alfred Zammit who cleared the bank, which was later closed by the European Central Bank, Farrugia said that it was Galdes and not Zammit who had been responsible for the second Pilatus inspection.
Replying only to questioning by Opposition MPs Karol Aquilina and Adrian Delia, as the government MPs had no questions for Farrugia, the nominee was asked whether he had given evidence in Operation Green – a police ongoing investigation on alleged money laundering activities involving Keith Schembri, disgraced former prime minister Joseph Muscat’s right-hand man and chief of staff.
“I cannot say anything about this operation and am precluded from doing so by law,” Farrugia promptly replied.
The police’s never-ending investigation was triggered by precise intelligence from the FIAU that detailed suspected money laundering activities by Schembri and his associate Brian Tonna. Tonna, an accountant who owned Nexia BT, is a Labour government consultant on major multi-million-euro public projects that have since been suspected of corruption.
Farrugia could not explain why, despite the Unit’s reports, which numbered around 100 a year, no politicians have ever been taken to court over money laundering activities.
He said that it was the police and the attorney general are obliged to present charges in court. Defending the police inaction, Farrugia said that this may have been due to a lack of evidence and that such investigations are still a work in progress.
He confirmed that no politician has so far been arraigned in court but expressed his hope that the police are continuing with their investigations and are not holding back.
Farrugia’s nomination was backed by the government MPs, who hold the Committee’s majority, with opposition MPs voting against it. As such, the nomination was approved.