This is part of an investigative series by Lovin Malta into the claims of blogger Daphne Caruana Galizia that the Prime Minister’s wife is a beneficiary of a secret company in Panama called Egrant. You should read Part 1, Part 2 and Part 3 before you continue. In this edition, we fact-check the whistleblower’s version of events and reveal new details about “systemic failures” found at Pilatus Bank.
Update: A magistrate who investigated the Egrant case has established that the company could not be connected to the Prime Minister’s wife as alleged by the whistleblower and that the Declarations of Assets presented to the inquiry were falsified. (25/07/18)
A lot has changed since we last updated you on our Egrant investigation. For starters, Prime Minister Joseph Muscat has called a snap election on June 3rd.
But something else has happened before that: a Russian whistleblower has come forward, claiming to have the documents linking the Prime Minister’s wife Michelle Muscat to the mysterious third company in Panama called Egrant. She spent three hours with the Magistrate giving him information, and then she published her first-hand account on The Malta Independent, followed by an interview the next day.
As we continue trying to get to the bottom of the Egrant mystery, we decided to fact-check the whistleblower’s version of events to see if we could find any holes in her story. These are some of the things we’ve verified so far.
1. The whistleblower had a proper job contract. She was not an intern.
We have obtained a copy of the whistleblower’s employment contract. It’s dated January 15th and it is signed by the whistleblower well as by the bank’s chairman Ali Sadr and the bank’s CEO Hamidreza Ghanbari. The contract, it must be noted, is an indefinite contract at a salary of €25,000, meaning she was no intern – as was first insinuated by her critics. She was hired as an Executive Assistant.
Interestingly, Pilatus Bank refused to tell Lovin Malta whether or not she had an employment contract or not. But the bank did give two versions of denials to Times of Malta and Malta Today.
After the bank’s outreach to the newspapers, this is what Times of Malta reported: “As for her employment contract, this newspaper was told that no such document existed because it could only have been given to the woman had she received her residence permit. Her designation upon receiving such a document would have been executive assistant, the bank said.”
The version was slightly different when given to MaltaToday: “Due to the fact that Mrs. AB did not obtain her residency permit prior to her dismissal, therefore there was no effective employment contract. On 29 March the Bank decided not to pursue the Employment Contract that was offered which was subject to Mrs. AB receiving her residency permit, which was never presented to the Bank.”
The contract says nothing about being conditional on residency permits.
2. She did write to Finco Trust to ask about her salary.
In her account, the whistleblower mentioned lots of people she wrote to during the course of her ordeal at the bank, so we tried to check out as many of those as possible. Finco Trust is Pilatus Bank’s payroll supplier, so getting an official response was difficult.
This is what they said: “Finco Trust confirms that it provides professional services to Pilatus Bank consisting of payroll services. As to your other questions, we are unable to provide any replies because they are covered by client confidentiality. Finco Trust provides client information only in terms of law.”
However, Lovin Malta has independently confirmed, through sources, that the woman did write asking about her salary, even though this was not a formal complaint.
Questions were also sent to the Department of Employment and Industrial Relations but no answers were forthcoming.
3. The whistleblower did send email complaints about her difficulties with Pilatus and the police.
Lovin Malta has acquired an email the whistleblower sent out on August 14th 2016 which copied in the police commissioner, the Minister for Home Affairs and National Security, the Russian Embassy, and the Russian Foreign Affairs Minister.
4. She also wrote to the press after her complaints weren’t being heard.
We asked several journalists if they remember receiving an email from a Russian woman with a similar story. Most journalists could not recall, but we did obtain one email which did show the whistleblower wrote to the press. Here’s an extract from the original email.
5. She does have a court case against her but no other history of criminality as far as we could locate.
Lovin Malta has confirmed that there is a court case against the whistleblower regarding claims by Pilatus Bank that she used the bank’s credit card to pay for her family to join her on a training trip abroad. The whistleblower says Pilatus Bank took this action after she complained about not having been paid.
6. An investigation into Pilatus Bank at the time of her employment made some horrific findings.
Lovin Malta independently confirmed that an investigation into Pilatus Bank was conducting during the time of the whistleblower’s employment – as she claimed. We also confirmed the investigation found serious failures.
Investigators found several questionable transactions which had insufficient documentation – and in some cases no documentation whatsoever – to prove the legitimacy of the funds. FIAU also found a number of companies that should have been classified as having PEP involvement but were not.
“Investigators found several questionable transactions which had insufficient documentation – and in some cases no documentation whatsoever – to prove the legitimacy of the funds.”
However, Pilatus Bank denied these claims, telling Lovin Malta: “Not only has the Bank been found to be fully compliant to all laws and regulations, no shortcomings were found in the conclusive findings of such reports.”
Note the word “conclusive“.
We asked the Financial Intelligence Analysis Unit (FIAU) how investigations into banks are usually performed, in order to understand whether damning findings can be rectified at a later stage.
This is an extract from their reply: “Once the conclusions of an on-site examination are drawn up, the findings are disseminated by the FIAU to the subject persons. Subject persons are invited to offer any clarifications on issues raised in the findings of the FIAU and are also requested to notify the FIAU as to how they intend to rectify their position.”
“The process is one which involves a number of communications between the FIAU and subject persons, and the final conclusions of the FIAU may indeed vary from the initial findings depending on the information/submissions received by the Unit throughout the aforementioned process. Where non-compliance is ascertained, the internal committee of the FIAU is tasked with the responsibility of determining whether the circumstances warrant the imposition of an administrative penalty or some other sanction.”
Meanwhile, the government has refused to answer these questions regarding the whistleblower:
1. In light of the explanations given by the whistleblower, does the Prime Minister regret the way he described her to the press?
2. Can the government confirm whether the whistleblower has been found guilty of any crimes whatsoever? If not, why is her credibility being questioned if she has not yet been proven guilty of anything?
3. Can you confirm that the whistleblower has never been accused/found guilty of falsifying documents?
4. Considering this government introduced the Whistleblower’s Act, why has the government launched a coordinated attack on the whistleblower’s credibility?
5. What protection, if any, has been given or offered to the whistleblower?
6. Will the government call for any investigations into the claims by the whistleblower of bad employment practices, considering she was never paid by the bank and that the bank may have acted abusively in her regard with the help of the police?
7. Does the government have any other comments to make about this case?
If you have been following this series from the start, you’d be interested to know that accountant Brian Tonna has once again failed to send us a copy of Egrant’s share register, almost a week after telling us he would. More on that later…
The investigation continues.