The Prime Minister took a dangerous decision this week. Despite convincing journalism by Reuters and Times of Malta, Joseph Muscat once again chose to stand by his chief of staff Keith Schembri and his favourite minister Konrad Mizzi. His reasoning is that if the Egrant allegations were proven to be a lie, so too could the allegations against Schembri and Mizzi, so it should be business as usual until all magisterial inquiries are concluded. Here are 13 reasons why this logic is unacceptable.
1. This is not another Egrant. When it comes to 17 Black, there are actual documents that have not been contested.
When he asked voters to wait for the outcome of the Egrant magisterial inquiry last year, the Prime Minister had an advantage. Nobody had published the documents that were meant to offer supporting evidence for the allegations against him. All we had was the word of now-assassinated journalist Daphne Caruana Galizia and her whistleblower Maria Efimova. When it comes to 17 Black, there are documents that cannot be more damning.
Creating companies in Panama and Dubai, masked by trusts in New Zealand, to hide unexplained financial transactions from a top businessman in Malta who was just given a power station is basically the type of case for which anti-corruption and money laundering laws were written. And it's not the only case involving Keith Schembri. This is just one of several cases that follow the same pattern and have all been the subject of leaked financial intelligence investigations. Remember Adrian Hillman? Take a look at these transactions to refresh your memory about how Schembri paid the former Times of Malta boss €120,000 before sweeping into power.
2. The documents show a direct financial relationship between the power station project and the Panama companies.
To be clear: We now know, through documentation from the Panama Papers cache, that Keith Schembri and Konrad Mizzi were set to receive €150,000 each month from Yorgen Fenech, the person who got to build and own the famous gas-fired power station they pledged during the 2013 election. Nobody has disputed the documentary evidence that has been published by Times of Malta and Reuters.
3. When it comes to money-laundering, the attempt is as bad as the offence. It makes no difference whether money was ever exchanged.
Some people claim there is no evidence that money ever exchanged hands. But when it comes to money laundering, Maltese law is clear. Attempting to launder money, or being an accomplice to money laundering, is precisely the same by law as actually committing the act in its entirety. Therefore it makes zero difference at law whether Schembri and Mizzi were caught red-handed before they could accept these particular payments. If they planned to get the money, as outlined in Nexia BT’s emails, it’s as bad as actually getting the money.
4. Muscat himself is actually DELAYING the only magisterial inquiry on 17 Black.
Meanwhile, Muscat and his inner circle are actually formally appealing the only magisterial inquiry into this case. Magistrate Ian Farrugia had already found enough justification to merit a criminal inquiry back in July 2017 but Muscat, Schembri and Mizzi, appealed this decision (together with their associates Adrian Hillman, Malcolm Scerri, Brian Tonna and Karl Cini). The appeal is still ongoing since the judge who was landed the appeal happened to be the husband of a Labour MEP and has refused to recuse himself despite the very clear conflict of interest in this case. In the past, Muscat painted a picture of himself as the paladin of justice. He was very proud of himself when he called an inquiry to investigate himself on the Egrant case. When it comes to the wider investigations on Panama Papers - and specifically this 17 Black case - the only thing the Prime Minister has done is delay the inquiry by 15 months and counting.
5. A criminal inquiry does not determine political responsibility, it determines criminal responsibility.
Muscat says he will not take any political action against Mizzi and Schembri, despite the published evidence, because he wants to await the outcome of the magisterial inquiry he is actively trying to prevent. But even if he was not trying to delay it, it must be said that a criminal inquiry is there to determine who goes to jail, not who stays in Cabinet. A political expulsion should require far less evidence than sending someone to jail. And if the inquiry finds against Schembri and Mizzi, that's exactly where they will be going (for up to 18 years per offence). If a magisterial inquiry finds fault in Schembri and Mizzi, the courts will take the decision out of Muscat's hands. Taking action at that point would be redundant to say the least.
6. Ministers have been forced to resign for much lesser crimes.
Remember former ministers Manuel Mallia and Michael Falzon (who were both made to resign because of something their staff did) and Speaker Anglu Farrugia (who resigned because he criticised a court sentence that was later overturned)?
7. Inquiries take ages since Muscat has refused to appoint full-time inquiring magistrates.
It’s also very easy to say you’re waiting for a magisterial inquiry when Malta’s inquiring magistrates are part-timers who spend most of their time hearing cases instead of investigating them. Informed voters will know that the government has so far refused to create the role of full-time inquiring magistrate. This was a key point of former MP Franco Debono's Private Member's Bill from 2011 but was conveniently ignored so far. Without this important change, magisterial inquiries simply serve to buy time.
8. Meanwhile, in Cabinet, Schembri and Mizzi approve magistrates and judges who may one day decide their fate.
As chief of staff of the Prime Minister, and as a top minister in Cabinet, Schembri and Mizzi can be extremely influential when it comes to the approval of magistrates and judges. The government recently appointed a new Chief Justice and will soon appoint a new Attorney General. This is already reason enough alone to merit their suspension. Why should these men be helping to approve magistrates and judges who may eventually be judging their very serious court cases?
9. Muscat and Schembri also wield too much influence when it comes to the police.
As the most powerful people in government, these men already hold too much power over the police force. They get to appoint or demote the Police Commissioner. They can also influence promotions and transfers. Again, they should simply not be allowed to wield this kind of power with such serious allegations hanging over their heads. Otherwise how can we have faith in the police to do their job freely?
10. Their explanations are wearing very thin and make less sense every day.
During the 2013 election campaign, Konrad Mizzi was the star of the show and Keith Schembri was the behind-the-scenes mastermind. Whenever the Nationalist Party contradicted an element of their plan - particularly when it came to energy - they would famously schedule a more detailed rebuttal press conference within 30 minutes. It was impressive. Now, however, their explanations have worn thin. There are no press conferences. There are no interviews. They are not even giving explanations on Facebook. And when they do issue a short statement, they make unintelligible statements like when Mizzi recently claimed his auditors had confirmed he never knew about 17 Black, which is of course a total invention and not even something the auditors could have confirmed in the first place.
11. Failure to act is increasing pressure on Maltese banks at a very precarious time.
If there was one reason alone to act, and act fast, it's the fact that banks in Malta are already under humungous pressure from Europe and beyond. The last thing we need as a country is even more doubt cast on our ability to fight money laundering. With banks being shut down and traditional banks refusing to open accounts for new companies, things are getting ugly fast. Sure, Muscat might be riding into the sunset by the time things start falling apart economically, but the effects will be felt by those he leaves behind. If we don't clean up our act when it comes to money laundering, our efforts to attract foreign investment will be wasted and our economic boom will come crashing down with it.
12. Besides criminal responsibility, there is also political responsibility and that rests with Joseph Muscat today.
Muscat is politically responsible for both Keith Schembri and Konrad Mizzi and has insisted on defending them from day one of the Panama Papers saga that started two and a half years ago. Even just by keeping them in their positions for this long, Muscat is politically responsible for any alleged crimes and questionable deals that may have been made along the years. If Muscat keeps his men there even after the news published this week, he now becomes a political accomplice, even if just by omission.
13. In fact, we have now entered the territory of collective ministerial responsibility too.
Each member of Cabinet has spent the past few years rubber-stamping all the deals presented to them by the Muscat, Schembri and Mizzi trio. By not questioning these deals and allowing everything to go on unchallenged - particularly in light of the most recent revelations - this will reflect badly on all the members of Cabinet who are thereby assuming collective ministerial responsibility for their actions. In other words, nobody in Cabinet today is going to be able to live down this scandal once it reaches its logical conclusion. Those who aspire to a political career in the post-Kasco administration need to start coming to terms with this fact.
Bonus. Muscat has not even promised to resign if the inquiry does not go his way.
When Joseph Muscat surprised the country with an early election in 2017, he spent the campaign making a very simple (and effective) challenge to then Opposition leader Simon Busuttil. Muscat wanted to know whether Busuttil would resign if Egrant were proven to be a lie. Muscat also said that if there was a hint of truth to the Egrant allegations, he would resign from whatever role he carried at the time.
Today, the country must make a very similar challenge to Muscat. Will he resign from whatever role he occupies at the time if a magistrate finds a hint of truth to the allegations against Schembri and Mizzi? Any hesitation from the Prime Minister will prove that he is simply buying time, against the interests of the Maltese people, while giving these two men free reign to take advantage of their positions until a magistrate stops them.