About 15 months ago I wondered aloud how Robert Abela came to be so wealthy. We’re starting to get answers.
Here’s what The Sunday Times’s story of this morning means.
At least in one case that we know of so far, Robert Abela billed a client for legal services in a creative manner. When you buy a service you get a bill and you pay for it. That’s because there’s nothing wrong with your money. You earned it from your work or your business and you paid tax on the earnings. When you pay for the service you use clean money and pay VAT on top. You have nothing to hide. Your service provider hands over to the authorities the VAT you paid them, and pays tax on the profits they made from providing you a service. That’s how things happen in the fair world.
If you’re a criminal and the money you’re paying with is stolen or earned from criminal activities at the expense of someone else, things become complicated. You can’t just hand-over the cash and your service provider can’t just collect it. That’s because at some point some tax authority is going to ask, ‘where did all this money come from?’ You don’t want them poking around your cash stash because they could discover the crimes you committed to earn the money.
So, here’s what the wealthy cash-rich criminal does to pay their service provider, such as their lawyer. The client sells to the lawyer property for less than it’s worth. The lawyer sells it on for its proper price pocketing the difference.
The difference is the effective fee paid by the cash-rich criminal. But no money has passed between the criminal and the lawyer, so there’s nothing to see here. There’s a bonus. A property sale is taxed at 5% or so instead of the full income tax rate. And there’s no VAT.
More importantly, a lawyer gets to charge their criminal-client premium rates for all this trouble, which in your book and my book is profiting from crime, and therefore being complicit in crime. The lawyer’s book will say differently.
We’ll hear all sorts of sophistries to justify this. But let the real implication of this be clear. Robert Abela is the second prime minister in a row to be personally implicated in crime. As this is coming out we learn from Malta Today that the tax man at the time Robert Abela was doing this stuff, also held an inappropriate relationship with people we have good reason to suspect are criminals. The story is very much in the public interest. It does not in any way dilute the significance of the fact that the country’s prime minister appears to have laundered money for and with alleged criminals.
15 months ago, I remarked that Robert Abela is loaded and that he should explain how at 43 years of age (he’s nearer 45 now) he came to be a millionaire. He obviously didn’t. It is increasingly clear that he couldn’t.
There’s no question that he would consider being even slightly embarrassed by these revelations. One Radio this morning opened fire on The Sunday Times accusing them of baseless reporting and, of all things, attacking journalism. As ever, Labour will shout this down.
But here’s what’s really happening. Joseph Muscat is showing Robert Abela that he can live up to the threat of tearing him to shreds if he leaves him and his accomplices exposed to police action. Robert Abela is telling whistle-blowers that if they dare speak up he’ll find ways of publicly discrediting them.
It’s like that truel scene from The Good, The Bad and The Ugly. Three unholstered guns, three fast gunslingers. The first to shoot at one of the other two is certain to die, shot by the third man. In place of a treasure of gold coins, what lies buried in an unmarked grave is the name and worth of our country. And there, it appears, it will remain.
