Kenneth Rijock’s post from yesterday got a lot of attention. He quotes investigators saying Joseph Muscat is still effectively in charge of the government, running a system of patronage for people in office paying them in cash from proceeds of crime.
Rijock reports Muscat is under investigation in the United States and four other European jurisdictions looking into his conduct when he was prime minister. He says at least one of those crazy trips in the days before his resignation last Christmas, included a trip to Miami from where he likely hopped onto a friendly Caribbean island that may be helping him hide his stash.
Kenneth Rijock says Joseph Muscat is being investigated for a number of possible crimes, including one that can cause him serious trouble: providing material support to a designated terrorist organisation.
In a later post Kenneth Rijock explains what the supporting a terrorist organisation law is about and how it may apply in this case. Cartoon images of Joseph Muscat wearing a keffiyeh carrying bags of ammo are not helpful.
Joseph Muscat was moved to reply yesterday. He gave multiple news organisations (MaltaToday, Lovin Malta, The Malta Independent) identical quotes which means he prepared a response but he only shared that response with the reporters that asked him to comment. He didn’t publish one of his now standard Facebook declarations or issue a press release. That’s because he was concerned he might actually be the one to give Kenneth Rijock’s report more publicity than it would get on its own steam.
That’s why Times of Malta do not cover either what Kenneth Rijock reported or what Joseph Muscat said in reply. I understand that choice. Kenneth Rijock quotes sources in US investigative agencies I, or the Times of Malta, or I should imagine at this point any other reporter working in Malta, have no access to.
So we have no way of independently verifying what Kenneth Rijock is reporting. That doesn’t make it untrue but a report saying ‘he says, she says’ does not amount to journalism. Kenneth Rijock says investigators are watching Joseph Muscat. Joseph Muscat says that isn’t true. Telling you that, makes you no wiser. Plus, at this point Kenneth Rijock’s blog is known well enough in Malta for people to read it directly without the intermediation of local media.
Still, in the hours since the ‘supporting terrorism’ post was published I was asked by several readers of my blog: is this for real? There are many valid reasons for the question.
Firstly, it comes out of the natural scepticism internalised from years of disappointment in seeing justice fail us. Getting away with it has been just how Joseph Muscat has survived so far. He got away with the Panama Papers. He got away with Egrant. He got away with going to the wedding of Ali Sadr Hashemi Nejad, the banker to Ilham Aliyev’s nearest and dearest. He got away with keeping Keith Schembri at his side during briefings on Daphne Caruana Galizia’s murder. He got away with chatting with Yorgen Fenech about the reliability of Melvyn Theuma. All that getting away, makes anyone with even the most residual sense of decency wish karma would climb up his back in some shape or form. But that feeling is soon suppressed by the bitterness of experience. The past shows that’s what Joseph Muscat does, he keeps getting away with it.
Secondly, the idea that the law enforcement agencies of other countries could be interested to prosecute a former prime minister of little old us feels outlandish. However egregious Joseph Muscat’s actions were, we have a natural inclination to think that Malta is too small to be harmful. If we blew ourselves up with a nuclear bomb, the world would not miss us for long. That’s a classic underestimation of the banking resources that go through Malta and their potential to damage the global financial system and the security interests of other countries. But that is not foremost on people’s mind most of the time. We think of bad prime ministers as weak on hunting, inefficient managers who cost us more in taxes, not as good as the alternative party leader, that sort of thing. We don’t think of them providing material support to terrorist organisations.
And thirdly, Joseph Muscat gave another reason to be sceptical. Kenneth Rijock “is in touch with the usual suspects”. Allow me to flatter myself and say Joseph Muscat probably means me. Because the ‘usual suspects’ here are not likely criminals to be rounded up in an urgent search for a crime. They are rather the people to be blamed for Joseph Muscat having to deny that, no, he’s not being investigated for crimes that are punishable by life terms. The fact that Kenneth Rijock spoke to me must mean that he’s writing what I’m telling him to, which obviously means he cannot be believed. Take that as you will, but clearly this sort of thing works with many people which is why Joseph Muscat uses it in his own defence.
Look, I did not and could not verify independently that Joseph Muscat is the subject of criminal investigations, in the US, or anywhere else. But there are a number of things we do know and it might be useful to sum them up here.
The release of Ali Sadr Hashemi Nejad in New York in spite of his earlier conviction for bank fraud and sanctions busting has never been fully explained. The official story of failure by the US prosecutor to provide full disclosure to his defence is unsatisfactory. But what’s really strange is the fact that sealed submissions continue to be filed in his case, months after the US government dropped it.
The content of sealed documents is by definition unknowable. Until they’re opened we cannot know for sure what’s in them. It is reasonable to surmise that Ali Sadr Hashemi Nejad was let go in exchange for very valuable information that has led to indictments that will remain sealed until the subjects of those indictments are in US custody.
Ali Sadr may have provided information on his clients. We know these included people close to, or within, the dictatorships of Azerbaijan and Angola which may be of interest to US prosecutors.
We also know that in spite of Ali Sadr’s claims of fear about returning to Iran, Ali Sadr’s father has some form of relationship with the Iranian regime. The US consider Iran an enemy state and Ali Sadr may have been useful to the US in that respect.
We also know that Ali Sadr conducted business in Venezuela and used the US financial system to launder money out of there. That too is a sensitive matter for US interests; it has been the background of another arrest in the US on a separate business of laundering money from Venezuela conducted through Malta, and Ali Sadr may have helped the US get closer to bigger prosecutions there.
None of these necessarily point to Joseph Muscat.
The Maltese authorities licensed Pilatus Bank and we do know there was a friendly relationship between Ali Sadr and Joseph Muscat. We also know that Pilatus Bank was used by Keith Schembri to accept payments from Brian Tonna. The two say that was a repayment for a loan but a drawn-out magisterial inquiry, now sealed in the desk of the attorney general, may have concluded the money was actually kickbacks from the sale of passports.
That would suggest that Pilatus Bank accepted to bank for Maltese politicians accepting deposits of proceeds from crime. The complicity then could be deeper.
We do not even have to go into the Egrant story that leaked out of Pilatus Bank and that needed the complicity of that bank’s owner for Joseph Muscat to confidently claim that no evidence of wrongdoing could ever be found.
If there has been such a relationship between Joseph Muscat and Ali Sadr Hashemi Nejad, then one must allow for the possibility that the conduct of Ali Sadr Hashemi Nejad in Malta was enabled by Joseph Muscat. If, on the back of that enablement, Ali Sadr processed money for the rogue regime of Iran or on behalf of Iran funded organisations such as Hezbollah, then a cross-border case of providing support for terrorism is a distinct possibility.
This is not the only possible line of inquiry.
I referred earlier to alleged kickbacks paid to Keith Schembri on the back of passports sold to Russian nationals. This is one case we know of because of Simon Busuttil’s 2017 request for a magisterial inquiry that we now hear has been just wrapped up. The names of the Russian clients that are alleged to have paid kickbacks for their passports are known and the names themselves have not raised any alarm. So there may be nothing more to this specific case than the payment of kickbacks. That’s bad. But probably not cross-border FBI investigation bad.
But just because this is the only documented case of kickbacks on passports we came across, does not mean it is the only one there has been. Rather the opposite, we must suspect that where there is smoke there is fire.
The Times of Malta a few days ago quoted its own sources say that a candidate for a Maltese passport from a “rogue state” managed to acquire a passport by applying as if he was a citizen of another country. “Rogue state” indicates the original citizenship of a country that even Malta’s passport scheme would have ruled ineligible. We have seen this method used without much drama. Ali Sadr never got a Maltese passport but he got a Maltese banking license carrying a St Kitts & Nevis passport, not his native Iranian.
“Rogue state” could be Iran, say, or could be North Korea. The story in The Sunday Times says that when the local authorities realised what happened they cancelled the passport.
So this tells us four things:
One: Officials in Joseph Muscat’s government, even Joseph Muscat’s own right hand man and by extension quite possibly even Joseph Muscat himself, likely took kickbacks on the sale of passports.
Two: Malta’s passport sales scheme has been used, in at least one case, for espionage or illicit activities by rogue states likely identified as enemies by the United States.
Three: Security services acting for third countries will offer to bribe politicians or administrators for passports. Other countries could include enemies of the United States or countries who, like Iran, fund organisations the United States designates as terrorist, like Hezbollah.
Four: Joseph Mucat’s government has provided licences and cooperation with citizens of a state which is an enemy of the United States by accepting the superficial subterfuge of a passport obtained from a Caribbean banana republic.
Therefore, to suppose that any one of those passports or licences which may have been provided by Joseph Muscat’s government on the back of kickbacks could have been used in pursuit of a subsequent terrorist activity is not far from the realm of possibility.
Does any of this prove that Kenneth Rijock is right, or that his sources are providing him with correct information? Of course not. It would take much more for me to make such an assertion.
But it is enough not to think any of what he is reporting is too outlandish or too ridiculous to be considered as eminently possible. This is not an investigation conducted by the Romulan High Command for intergalactic espionage. What Kenneth Rijock is reporting is that the governments of 5 countries he is aware of may have both law enforcement and policy reasons to push forward consequences to a European jurisdiction behaving as if it was a rogue state.
Consider that even though it was shuttered after the intervention of the European Central Bank and its owner was arrested, tried and convicted in a US federal court, the Maltese authorities to date have not charged anyone with any wrong doing at Pilatus Bank. It’s as if a bank can be a laundromat for criminals but the people running the bank can still be found to have done no wrong. When other countries see that, you can’t blame them for stepping in.
How do you warn future Joseph Muscats that it would be unacceptable for them to conduct themselves like the original? You could do like Ursula von der Leyen did yesterday in her state of the union speech and repeat the refrain that selling passports is a perversion of European values like killing journalists or suppressing personal freedoms. Or you could go back to Joseph Muscat and show the world that every action will eventually meet an equal and opposite reaction.
Joseph Muscat’s intervention yesterday reminded me of his reaction when Maria Efimova spoke out about his wife’s transactions at Pilatus Bank. He said she was a Russian spy working for Vladimir Putin, seeking to rock his government as a punishment for not allowing Russian ships to refuel in Malta on their way to Syria. It was all bullshit as we later would find out.
The bullshit yesterday was about Kenneth Rijock not being credible because he had been convicted of money laundering in the past. That wasn’t the result of some great investigation by Joseph Muscat. It’s written right there on Kenneth Rijock’s website. Having been a money launderer for the mob himself is indeed his USP, his claim to expert knowledge about financial crime and the consequences it brings about.
What really matters here is that when Joseph Muscat claims the Maltese police are not investigating him, he’s rightly asked why he thinks he would know if he were. That reply is applicable many times over in respect of investigations that may be happening somewhere in Virginia or Frankfurt.
We must keep our feet on the ground, rely on what we know and seek to learn more, and resist the temptation of believing anything just because we wish it were true. But if you and I wonder if what Kenneth Rijock is reporting will eventually lead to some spectacular arrest, remember that Joseph Muscat is wondering about that as well. And it can’t be easy to be him right now.