This week could turn out to be a bit of a game changer in Maltese politics, if the DCG-hype is to be believed. If you have no idea what we’re on about – or you just want to refresh your memory in anticipation – here’s everything you need to know about that elusive Panama company, Egrant, and why it matters.
Blogger Daphne Caruana Galizia, who last year broke the news that two high profile Maltese government officials held secretive company structures in Panama, announced this weekend that she found out “who owns the third company in Panama”. She did not reveal the owner’s name, because she still wants to verify some information with people who are unreachable over Easter. Now that Easter is over, we’re expecting the news to be broken at any point this week, and the country is eagerly awaiting the drama to unfold.
What is Egrant?
Egrant Inc. is the name of a company structure set up in Panama alongside two other companies: Hearnville Inc. and Tillgate Inc., which last year were found to belong to Konrad Mizzi, then Energy Minister, and Keith Schembri, the Prime Minister’s Chief of Staff, respectively. The companies were all set up by Nexia BT, the Maltese representative of Mossack Fonseca, which is where all the leaked documents making up Panama Papers came from. The owner of Egrant is a missing piece of the Panama puzzle that has already put the Maltese government under lots of pressure in its last year before the election, which also happens to be the year in which Malta holds the EU presidency.
What do we know so far about Egrant?
Not much. Egrant was mentioned in Panama Papers but its ownership remains unknown. It is largely believed to have been the subject of an email conversation dated 25th March 2013 in which Nexia BT says the owner of “the new company in Panama” will be “an individual” but more details would be given via Skype. The email also said the ultimate beneficial owner will “not be Nexia BT”.
Some months ago, Nexia BT claimed the email was unrelated to Egrant. The company also claimed Egrant belonged to Brian Tonna, the owner of Nexia BT (hence his initials at the end). According to Tonna, power of attorney over Egrant was never granted to anyone else and the company never engaged in any activity. But an MEP investigating Panama Papers told Lovin Malta two months ago about a document showing only 1% was owned by Tonna. The Nationalist Party has also dismissed Nexia BT’s explanation.
Who are we expecting the owner to be?
Opposition leader Simon Busuttil has long implied the owner of Egrant is Joseph Muscat, but the Prime Minister has denied these allegations outright, calling the PN leader “a liar”. If Muscat is not revealed to be the owner, Nationalist supporters are likely to be disappointed – unless ownership is attributed to somebody very close to him or if some other ownership points to something even bigger. It’s interesting to note that Caruana Galizia accompanied her article with a photo of his wife Michelle Muscat in a meeting with Leyla Aliyeva, the daughter of Azerbaijan’s president. This could be a clue regarding Egrant ownership but it could also be related to another claim being made by Caruana Galizia: that large sums of money were moved from politically exposed persons in Azerbaijan to bank accounts held by Egrant, Hearnville and Tillgate. Mizzi and Schembri have already sued Caruana Galizia over these claims and asked for the libel cases to be heard with urgency.
What if there is no evidence of ownership?
Caruana Galizia has in the past been accused of writing scathing stories about key members of government without being able to provide outright proof, as was the case with Economy Minister Chris Cardona’s alleged visit to Acapulco in Germany. If no evidence is provided in this case, this could turn into another long drawn out libel case which may remain unresolved by the elections. Labour will also accuse Caruana Galizia of trying to distract the public from the current infighting within the Nationalist Party regarding the coalition it struck with Marlene Farrugia’s party and the fake invoices the PN is accused of giving big donors in possible breach of the party financing law.
Why are we still talking about Panama one year on?
The Panama scandal is the only one which seems to have impacted the government’s popularity after several years of arguably better-than-expected performance on a number of issues, primarily related to the economy and civil rights. The government has from day one been accused of a lack of transparency and good governance, but Panama Papers exposed key members of government setting up dodgy structures within days of being elected – and that won’t easily be forgotten.
The MEPs investigating this case have already described the Panama companies as “classic money laundering structures”. Although the officials involved kept their place in government, this saga has left a big scar on the government which can potentially get deeper and bloodier if another piece of the puzzle is revealed and paints an even uglier picture than previously imagined. On the other hand, if this fresh piece of information turns out to be an anti-climax, it could further strengthen the government and weaken the Opposition. At this stage, we can only wait and see.