Thursday

6th Oct 2022

Opinion

How the Maltese government targeted me for defending rule of law

  • Panama Papers leak first exposed high-level corruption in Malta (Photo: Daphne Caruana Galizia)

After the assassination of investigative journalist Daphne Caruana Galizia last year, I have been at the forefront in calling for justice and the restoration of the rule of law in Malta.

I do this because Caruana Galizia would not have been killed if Malta's institutions were functioning as they should and no journalists will be safe until they do.

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  • European Parliament tribute to Caruana Galizia (Photo: European Parliament)

Financial crime can often be complex, but this story is relatively simple.

Two political operatives, Keith Schembri and Konrad Mizzi, the Iranian-owned Pilatus Bank, and an accountancy firm called Nexia BT, were exposed by the Panama Papers and by leaked reports from Malta's anti-money laundering agency (the FIAU) as being neck-deep in corruption and money laundering.

But rather than let justice take its course, the governing party suppressed the work of investigators to prevent Maltese law from being enforced.

Pilatus Bank is a case in point. Its short client list includes Kieth Schembri, the chief-of-staff of Malta's prime minister, and members of the ruling Azerbaijani regime.

A leaked Financial Intelligence Analysis Unit (FIAU) report shows how Schembri laundered illegal kickbacks from passports sold through Malta's citizenship-for-cash scheme.

I wrote well over 50 letters to Maltese, European, and international institutions concerning Pilatus Bank in view of the threat I felt it posed to Malta's financial services sector.

Action was only taken by the regulator when the bank's owner was arrested in the United States for a string of charges which, unsurprisingly, includes money laundering. He is currently facing a 125-year prison term on the basis of those charges.

But Nexia BT, the accountancy firm that worked in concert with Pilatus Bank and whose substantial transgressions are documented in the Panama Papers continues to operate in Malta with complete impunity.

Last month, I published a leaked report from Malta's FIAU. I did so because it had been buried and because the authorities that should have taken action were prevented from doing so.

The report concludes that police action is necessary against tourism minister Mizzi and shows how, through Pilatus Bank and Nexia BT, funds derived from corruption would be laundered.

The response of the Maltese authorities was to threaten me with arrest for publishing the report, but Mizzi continues to hold his post. Nexia BT continues to operate and receive lucrative government contracts.

And the criminal activity that could be in progress even today continues unabated to the detriment of the Maltese public.

Meanwhile, the Daphne Project was created after Caruana Galizia was assassinated in order to continue her work.

Daphne Project

This group of world renowned investigative journalists discovered that Schembri and Mizzi were planning to receive €150,000 per month into their once-secret Panamanian companies from a Dubai company called 17 Black.

We still do not know who owns 17 Black. But what is clear is that the kickbacks would have to result from a project big enough and with sufficient recurrent payments to make such cash flows possible.

Mizzi and Schembri were the driving force behind Malta's new gas-fired power station and a gas-supply agreement with Azerbaijan's state oil company that has seen Malta pay €40m annually above market rates for gas.

And yet it is I and others calling for accountability who have been labelled traitors deserving of punishment and it is they who would have us punished.

It is not a new narrative. It is what happens when institutions are captured, impunity flourishes, and corrupt politicians substitute themselves for the state.

This warped logic dictates that whoever speaks out against corruption is working against the state itself because the corrupt politicians have become the state.

And how are we traitors punished?

The first stage is to use the threat of lawsuits. In the past few months, I have been publicly threatened by both the FIAU and by Schembri's lawyers, who just so happen to also represent Pilatus Bank's owner.

The second stage is the intensification of a hate campaign that has recently culminated in the governing party's activists openly calling for me to be hanged for my work.

Malta's finance minister Edward Scicluna pinned a post to the top of his Facebook page which portrayed me as an all-powerful manipulator who should be blamed for Malta's recent credit downgrade following his disastrous handling of the scandal that engulfed Pilatus Bank and the authorities that were meant to supervise it.

He endorsed most of the disturbing comments that this post generated including one post that called for me to be sent to the gallows. He later claimed it was a mistake. But he did not apologise, nor did he delete the post.

'Yes, but look'

And when all that failed, the governing party has sought to discredit me through strategically placed stories in the press in an attempt to send a breathtakingly cynical message to the electorate: "Yes, we're corrupt but, look, so is everyone else."

A summary on the European Parliament's website was used to create the perception that I employed people I shouldn't have when the proper rule on the matter is crystal clear in the MEP statute.

Two of my relatives assist me with constituency work. They work part-time and are very modestly remunerated for that work.

They have not taken the post of an expert I required that could have gone to a more qualified applicant. Not only is there no breach of EU rules, there are no ethical implications either.

I take pride in being one of the few MEPs who audit their use of public funds. I do so annually and I publish the results of that audit. I have been doing so since 2010.

Malta's governing elite blames me for the fact that their laundromat, Pilatus Bank, is now having its license withdrawn.

For that, I will accept some responsibility. They are also concerned I might be going after their crooked accountancy firm next. They are not wrong.

David Casa is an MEP for the centre-right opposition Nationalist Party in Malta and a member of the European Parliament's special committee on financial crimes, tax evasion, and tax avoidance

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Former Malta opposition leader fears for his life

Simon Busuttil spent 10 years as an MEP before returning to Malta to lead the opposition. He now fears for his life amid probes into high-level corruption in Malta's government.

Malta's PM cleared of Panama Papers wrongdoing

Malta's prime minister Joseph Muscat says a year long probe has dispelled allegations he, his wife and political associates were involved in money laundering or fraud.

Whistleblower fears for life as US arrests Malta bank chair

US authorities have arrested the chair of the Maltese-registered Pilatus Bank for tax evasion. The bank facilitated political corruption in Malta but its whistleblower is now facing jail in Malta and fears for her life.

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