Sunday

22nd Jan 2017

Investigation

Part IV: EU judges, Maltese mysteries, and Christians in the Caribbean

  • Judges at the European Court of Justice in Luxembourg (Photo: curia.europa.eu)

John Dalli, flanked by his lawyers, enters the blue-carpeted chamber of the European Court of Justice in Luxembourg and faces a panel of five black-robed judges.


It is July 2014 - almost two years after an explosive meeting with European Commission chief Jose Manuel Barroso which ended Dalli’s EU career.

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Barroso - the man he blames for unjustly destroying his reputation - is standing an arm’s length away.

The two men had not seen each other since their last encounter on the 13th floor of the commission HQ in Brussels.

Dalli's voice cracked as he spoke of what he calls a sacking. Barroso, he said, had no legal basis to force him out of office. He wants the commission to pay him €1.9 million in material damages.

He claims that Barroso forced him to resign - a gentleman's euphemism for “pack up your things and get out”.

“I asked him [Barroso] to give me the possibility to consult a lawyer, to get some sort of legal advice … I asked for 24 hours. He looked at his watch and he said ‘I’ll give you 30 minutes’,” he told the EU judges.

 "It was not a meeting. It was an ambush.”

Barroso told the judges that Dalli agreed to resign because he had become politically untenable.

Basil A. Coronakis, the chief editor of the Brussels-based paper New Europe, told this website he was with Dalli in his office shortly after the Barroso “ambush” and had advised Dalli not to sign any resignation letters.

The Greek editor and veteran Brussels hack spoke of calls of support to Dalli from a handful of other commissioners.

When contacted by this website, Dalli later described Coronakis’ version of events as “mostly nonsense”.

But like so many other things in the story, people’s accounts of events are peppered with contradictions: The director of New Europe's legal affairs was standing with Dalli in the Luxembourg chamber as a hired hand against the commission.

When the EU court had heard the pleas, Dalli deftly evaded the small crowd of reporters standing outside the chamber’s wooden doors and disappeared into the vast network of the court building’s corridors.

“Barroso knows the basis of the Olaf report is a fraud,” he told EUobserver and one other reporter moments before exiting the court and getting into a waiting taxi.

Mystery in Malta

In the meantime, much had happened in Malta itself.

Dalli first phoned Joseph Muscat, at the time an MEP from Malta's opposition Labour Party, soon after he lost his EU job.

He then rang the then prime minister of Malta, Lawrence Gonzi, from Dalli’s fellow Nationalist Party.

Muscat was elected prime minister in March 2013 and, shortly afterwards, things started looking better for Dalli.

A month after the election win, Muscat sacked Malta’s police commissioner, John Rizzo - who had wanted to arraign Dalli, but who could not do so because Dalli was not in the country.

Dalli was lying low, possibly to evade the arraignment, possibly because he was - as he claims - genuinely ill.

Rumours surfaced that he was in Brussels. But one source told this website he was in Tunisia, which has no extradition agreement with Malta.

When sent a list of emailed questions by EUobserver, Dalli left the one about his whereabouts during this period blank.

Despite facing serious criminal charges in Malta over the snus scandal, Muscat then appointed Dalli as his personal consultant and de facto minister of health in June 2013.

Why would the leader of a political party hostile to Dalli’s party look on the disgraced man with favour?

Why would a prime minister appoint anybody facing serious criminal charges to his inner circle?

The questions remain unanswered.

When asked by this website, a Muscat spokesperson said only that the government needed his healthcare expertise: “I don’t see anything wrong with asking for advice from a former minister.”

Muscat also appointed a new police commissioner, Peter Paul Zammit (no relation to Silvio Zammit), to head the Maltese side of the investigation.

Peter Paul Zammit quickly announced that Dalli would not face charges over snus.

The situation smelled so fishy that the head of Dalli’s own Nationalist Party, Simon Busuttil, made allegations that there was a secret political deal to get the former EU commissioner off the hook.

Dalli is now threatening to sue Busuttil for defamation unless he gets an apology.

Olaf has also complained that Peter Paul Zammit refused to co-operate.

But Maltese government sources told this website he did so because the EU anti-fraud office was asking for call records dating back to 2008 in contravention of data privacy laws.

Christians in the Caribbean

Shortly after Dalli began working for Muscat, the New York Times broke a story which made Dalli look even worse.

It reported that in summer 2012 - at the height of the Olaf investigation - Dalli was in Cyprus for an informal meeting of EU health ministers when he suddenly left, chartered a private plane, and flew 16,000km to the Bahamas to facilitate the transfer of $100 million on behalf of an African charity.

He flew Cyprus-Malta-UK-Bahamas and was back 48 hours later.

Dalli has defended the trip, saying he was not involved in any money transfers but that he went to advise people on the creation of a new $100 million trust “to help people in Africa”.

He told EUobserver: “The trip to the Bahamas was related to philanthropic issues. I met people involved in Christian missionary activities”.

He also tried to discredit Barry Connor, the source of the New York Times story.

He said he later found out that Connor, who rented out a villa to Dalli in the Bahamas, was the real beneficiary of the $100 million trust.

Dalli added that he refused to get involved with Connor's charity because he was not a reputable character.

“Later this same individual visited Malta and suggested to money-launder millions of Swiss Francs”, Dalli said, without giving further details.

For its part, the Maltese press also uncovered curious information.

One reporter published a November 2012 email sent from Connor to Olaf’s chief investigator, Eduardo Cano Romera.

In it, Connor says that a woman named Mary Swan was helping Dalli to set up the $100 million trust via Chase Manhattan Bank in New York and indicated that the money would be transferred from a bank in Dubai.

“He [Dalli] told me that his two daughters would be arriving soon in Nassau to work this out with the Trustee and that they would need to take the control of the ‘Trust Protector’,” Connor wrote.

Daphne Caruana Galizia, a columnist for The Malta Independent, accused Swan of being an international fraudster who poses as an evangelical Christian.

She posted a copy of Swan’s alleged fake passport on her blog.

Galizia added that “she [Swan] styles herself as Lady Bird and is addressed by Louisa Dalli and Claire Gauci Borda - John Dalli’s daughters - in their emails to her, some of which I have seen, as ‘LB’.”

Was Dalli in the Bahamas - an offshore banking centre known for its secretiveness - to set up structures to receive money from tobacco lobbyists?

Olaf has since opened a new investigation into Dalli’s Bahamas trip.

According to German centre-right MEP Ingeborg Graessle, who heads up the European Parliament’s budgetary control committee, the EU anti-fraud office has yet to find anything of substance.

But Graessle told this website that keeping the Bahamas story on life support helps Olaf to make Dalli look bad.

“[Olaf chief Giovanni] Kessler doesn’t close the [Bahamas] case because he needs it to keep an air of suspicion over Dalli,” she said.

It is an opinion which squares with Dalli’s own sensational theory - that the EU and big tobacco concocted his downfall to suit their own nefarious ends.

Part V - Dalli’s big tobacco theory - will be published on Friday 7 November

Part IV - EU judges, Maltese mysteries, and Christians in the Caribbean

Part III - Actors assemble for EU melodrama

Part II - Malta's 'Mr Teflon'

Part I - From Peppi's to Barroso's

Investigation

EU smoke & mirrors

EUobserver reporter Nikolaj Nielsen sheds new light on the Dalli lobbying scandal, which, by Barroso's own admission, threatened to bring down the EU executive, but which is not over yet.

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