Here’s a statement issued by the Caruana Galizia family after this weekend’s events:

Malta needs the whole truth and Joseph Muscat still holds the key

Fifteen months after Magistrate Bugeja’s inquiry was initiated, the Maltese public is expected to simply accept as fact that we will never know for whom Egrant Inc. was set up. This is a dangerous notion that cannot coexist with democracy.

In the conclusions to his inquiry report, Magistrate Bugeja is unable to say with confidence that the Prime Minister is guiltless, nor can he state unequivocally that the allegations are false as he has been unable to prove the ownership of Egrant Inc., an anonymous Panamanian shell company that no longer exists.

When Magistrate Bugeja’s inquiry went on for several months longer than the Labour Party expected, many hoped its findings would be conclusive. That was always a false hope and one Daphne Caruana Galizia never shared.

Egrant Inc. was set up in the same period and by the same firm, Nexia BT, as three other companies: Hearnville Inc., Tillgate Inc., and Torbridge Services Inc. The only reason the public knows that Minister Konrad Mizzi and the Prime Minister’s Chief of Staff Keith Schembri own Hearnville Inc. and Tillgate Inc. is because their names appeared in leaked emails from Nexia BT to Mossack Fonseca in Panama. Without the email evidence, no Maltese magistrate would have been able to prove the companies’ ownership. The only reason Egrant Inc.’s ownership is still questioned is because Nexia BT’s Karl Cini gave Mossack Fonseca the name of the Panama company’s ultimate beneficial owner over Skype rather than in writing by email.

Last year, the Prime Minister’s consultant Brian Tonna claimed that he owned Egrant Inc. throughout its existence. Journalists at Lovin’ Malta immediately showed that this claim is inconclusive. Separately, the published excerpts of Magistrate Bugeja’s report show the inquiry has not confirmed Tonna’s claim that he is the ultimate beneficial owner of Egrant Inc.

Over a year ago, Daphne Caruana Galizia correctly predicted that Magistrate Bugeja would find it impossible to prove or disprove that Michelle Muscat was the ultimate beneficial owner of the company because he would be unable to prove the identity of the company’s ultimate beneficial owner. As Daphne Caruana Galizia also predicted, the UAE, where it was claimed that Egrant Inc. held a bank account, has failed to respond to Magistrate Bugeja’s request for information.

Daphne Caruana Galizia knew that the only way to get to the whole truth about Egrant Inc. and the Prime Minister — the company’s ownership is not the only pending question — is for the Maltese authorities to investigate Konrad Mizzi, Keith Schembri, Brian Tonna, Karl Cini, and the remaining staff at Pilatus Bank while they are still within easy reach.

Malta’s state authorities have failed and continue to fail to investigate the people who masterminded Malta’s state capture despite being empowered to do so and despite formal requests made by the former Leader of the Opposition and MP Simon Busuttil.

Prime Minister Joseph Muscat has now called for Simon Busuttil’s resignation, saying the accusation, based on media reports, that he and his wife set up a Panamanian company in secret is a resignation offence. Clearly, Muscat shares our view that setting up a secret Panamanian company immediately after taking office is wrong, but has yet to ask for the resignations of his Chief of Staff Keith Schembri and his minister Konrad Mizzi, despite their undisputed ownership of secret Panamanian companies which they set up shortly after the 2013 election. Until Joseph Muscat sacks Keith Schembri and Konrad Mizzi he will continue to be complicit in their crimes.

Joseph Muscat’s public statement in reaction to the inquiry report, and the attendant public communication by his aides and supporters, has focused on the absence of further evidence that Egrant Inc. belongs to Joseph Muscat or his wife, Michelle, rather than on the key public interest question which has not been satisfied by the Bugeja inquiry: who was the ultimate beneficial owner of the now defunct Panamanian company Egrant Inc.?

The question is of primary public interest because Egrant Inc. is one of four related companies set up by Muscat’s consultant, Nexia BT, for one of Muscat’s ministers, Konrad Mizzi, for Muscat’s Chief of Staff, Keith Schembri, and for a consultant, Cheng Chen of Accenture, all of whom were involved in the previously unannounced sale of shares in a key state asset, Enemalta, to a Chinese state-owned company, Shanghai Electric, shortly after the Panama companies were set up.

The responsibility of a Prime Minister in a parliamentary democracy is to prioritise the public interest over personal interest. If secret ownership of a Panama company is a resignation offence, and if Egrant Inc. really did not belong to the Prime Minister or his wife, then at least three questions remain:

1.     Why hasn’t Muscat fired Keith Schembri and Konrad Mizzi?

2.     Why is Muscat still engaging Brian Tonna’s firm on government business?

3.     Why is Muscat not interested in finding out the identity of the actual or intended ultimate beneficial owner of Egrant Inc.?

The answers to these questions are unlikely to exonerate Joseph Muscat. Malta needs the whole truth and Joseph Muscat still holds the key.

Statement annex

The full report of the inquiry has not yet been published, but the Office of the Prime Minister has had access to it. Only pages 1,403 to 1,451 of what is reportedly a 1,500 page report have been published. 1,450 pages have been kept hidden. The section recommending further investigations into named individuals has not been published.

Publishing the full report is in the public interest, particularly when the Prime Minister himself has a copy. This is even more urgent given that what little was disclosed from the report hints at confirmations of misdeeds by other people, none of whom were mentioned by the Prime Minister or who have sought to ride on the partial publication of the inquiry report as a personal whitewashing exercise.

The conclusion of the inquiry was not announced formally. It was made known through strategic leaks and the subsequent media reports were then confirmed by the Attorney General’s office. The Attorney General is the chief prosecutor. In this inquiry, the Prime Minister and his wife were chief suspects.

Key government and PL officials promoted the line that the Prime Minister would react “after the report is published”. The Prime Minister’s head of communications, Kurt Farrugia, tweeted on Saturday morning: “Malta PM Joseph Muscat will comment on the inquiry immediately after publication by Attorney General, following AG’s office internal review”. The decision on whether to publish an inquiry report should be taken by the Attorney General’s office, not the Prime Minister’s. At that stage the Attorney General’s office had not yet reviewed the report, much less taken a formal decision to publish it.

The published section of the inquiry report shows the following.

Keith Schembri, John Dalli, Sahra FZCO, a number of Azeri PEPs and Russian PEPs were all clients of Pilatus Bank. (The Times of Malta had also reported that Asad Shaukat Ali received tens of thousands of Euros in payments in a company account held at Pilatus Bank. The account in the name of Shaukat Ali’s company Planetcore Malta Ltd was opened when government was negotiating with Vitals Global Healthcare Ltd.)

Nexia BT was a corporate services provider to Pilatus Bank.

The inquiry report notes that the firm Harbinson Forensics, incorporated in the UK on 1 May 2018, remarked that they did not find any email communication from Nexia BT or Karl Cini requesting the setting up of three companies in Panama. Documents in the Panama Papers obtained from the servers of Mossack Fonseca in Panama show that Karl Cini emailed two separate requests — one to set up one company and another to set up two.

Keith Schembri paid for the ‘audit’ into his Panama company and New Zealand trust through funds in his Pilatus Bank account at a time when the existence of the bank account was publicly denied.

Keith Schembri’s Pilatus account transacted with Brian Tonna’s Willerby Trading Inc., which is officially under investigation for kickbacks relating to passport sales to Russian nationals.

The inquiring magistrate could not obtain banking details from the UAE where a number of Maltese PEPs’ Panamanian companies, including Egrant Inc., allegedly hold bank accounts.

Joseph and Michelle Muscat knew Ali Sadr, the owner of Pilatus Bank and attended his wedding. The report also confirms that they met him frequently. This was previously publicly denied.

Ali Sadr, Pilatus Bank’s owner, removed at least one document from the bank’s premises in the bags he was seen carrying out of the bank on the night of 20 April 2017 (CCTV footage showed bank official Felipe Luis Rivera handing the document to Ali Sadr, and Ali Sadr later putting the document into his bag along with other documents and his tablet.) Further, Ali Sadr’s tablet and other papers in his bag, which presumably related to Pilatus Bank business, were also allowed to be removed from the Bank and accordingly not examined.

Brian Tonna’s (Nexia BT’s owner and OPM consultant who set up the Panama companies) public declaration last year that he owns Egrant Inc. does not feature in the published excerpts of the report, other than in a passing mention.

Azeri PEPs’ money laundering through Pilatus Bank does not feature in the published excerpts of the inquiry report, even though the concern was within the scope of the inquiry brief.