11 Eye-Opening Statements From A Person On The Frontline Of Panama Papers Inquiry

In the words of a Pana committee investigator

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Thanks to Panama Papers, the biggest document leak in human history, the Maltese public last year found out two key members of government had set up company structures in tax haven Panama shortly after the election. The news sparked outrage in Malta but senior minister Konrad Mizzi and the Prime Minister's chief of staff Keith Schembri kept their positions. Now, a committee appointed by the European Parliament has come to Malta to investigate as part of a wider inquiry on money laundering, tax avoidance and tax evasion. Yesterday they spent hours questioning journalists, Maltese authorities, and the minister himself. The chief of staff declined the invitation.

Lovin Malta met with German MEP Sven Giegold, a member of the Greens party and the Pana inquiry. This is what he told us after a full day of trying to get some answers. 

1. This was a 'classic money laundering structure' but there is no outright proof of corruption

“We are not fully convinced of (Konrad Mizzi’s) scheme because its setup is a classic money laundering scheme. It is a textbook case but there is no proof that it was set up for corruption as is being claimed loudly be the Opposition. There is an interesting coincidence that it was set up upon joining the government but there is no outright proof so we must continue investigating before drawing a conclusion.”

2. Konrad Mizzi was ‘well prepared’ for his interrogation

“What I liked about his preparation is that he didn’t wait until the nasty questions were asked. He answered them outrightly. He has an open style of addressing questions while others were waiting for the most difficult questions to come.”

3. But his defence has holes in it

“He insists the structures were set up for family purposes but documents show that the trusts were set up for things like recycling dangerous waste. There is tension between his claim that this is a family trust to administer wealth and the business notes in the Panama papers. A family trust doesn’t buy waste in Europe to sell it in India and China. That sounds like an active business operation.”

4. No facts, 'not even alternative facts', about the €1 million a year he was planning to deposit

“Mizzi claims this is one of the misleading statements made in public in Malta. That was his reply basically. There were no facts, not even alternative facts.”

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5. 'It would be unthinkable for a German minister to have stayed in office... but Opposition would not make corruption claims without proof'

“I think the decision on who governs your country and which minister stays in office is something the Maltese have to solve for themselves. But it would be unthinkable that a German minister could stay in office having created such a structure. If an active member of Government set up a similar structure in Germany, they would not stay in Government. But the Opposition would also not make such statements without proof. Here it seems a bit extreme. One side stays in office no matter what, and the other side makes harsh statements even if they can’t prove them.”

6. It's 'unacceptable' that Keith Schembri did not show up for questioning

“The no-show of Mr Schembri is unacceptable. We believe there should be zero tolerance towards no-shows when it comes to inquiring committees. It is also a question of respect towards European democracy. If you are invited by Parliament, even if you can expect nasty questions, you have to appear. Otherwise it is disrespect towards the Parliament, which is not acceptable.”

7. The committee 'can keep applying pressure, even with EU presidency'

“The committee has promised to follow up. We can send written questions, invite new people to Brussels, and look at other possibilities to dig deeper. We have no means to force anyone to attend a hearing but we can exert pressure for people to come. There is the Maltese presidency so we can raise this subject in every hearing and it will get totally embarrassing.”

8. There are still 'strong doubts' about the real ownership of Egrant (the third company set up by Nexia BT)

“There is no proof on who is the beneficial owner. According to the documents, I am not convinced that Brian Tonna is really the beneficial owner of Egrant as he claims. There is one document that shows only 1% of it was owned by Brian Tonna, so I would like to ask these questions. We have strong doubts that Brian Tonna is the ultimate beneficial owner, not to be confused with shareholder. We have strong indications there were other plans for the company rather than keeping it to himself. This is to be followed up.”

9. Committee 'not impressed' by the audit of Konrad Mizzi's company

“I must say I was not impressed but he audit. The FIAU already produced one and as long as this is not published, suspicions will remain. If you order a new audit without publishing the original one, this is a perfect invitation to ask questions. It doesn’t look very credible. This is a mis en scene.”

10. Malta's igaming sector poses a high risk of money laundering and must be scrutinised properly

“Malta is one of the leaders in the gaming sector. There is nothing wrong with that. These are civil liberties. But it seems that for fewer than 10 casinos we have 25 inspectors in Malta and for gaming we have only one. There is a risk of money laundering so there should be much stricter supervision here and we should follow that up.”

11. Malta has a culture of 'revolving doors' between politics on both sides and the financial services sector

“There seems to be a culture of revolving doors between politics and the financial sector which concerns both major parties. I was very surprised that the words of defence were very similar between Beppe Fenech Adami and Minister Scicluna. They both say it is a clean system and they are tough with a strong rule of law. But the truth is there are not enough suspicions reported, too few investigations and more or less no convictions.”

"Malta is in a dangerous situation. It profited a lot from not being seen as a tax haven. Now, if there are no changes to the culture, you could lose the good business and get under fire for the illegitimate ones."

Are you following the work of the Pana committee? What do you make of it so far? Tell us in the comments below or on Facebook.

READ NEXT: Everything You Need To Know About The Panama Hearings And How They Affect Malta

Written By

Chris Peregin