The Panama Papers scandal brought Malta to a screeching halt in 2015, with murky financial structures clouding the company owners linked to allegedly corrupt deals.

Keith Schembri and disgraced former minister Konrad Mizzi were quick to deny all wrongdoing, dismissing concerns that their offshore network could have been used for illicit activity. 

That all changed in November 2018, when the Times of Malta revealed that Yorgen Fenech, the Tumas Group businessman and the main suspect in the assassination of journalist Daphne Caruana Galizia, was the owner of 17 Black, the company listed as a target client for Mizzi and Schembri’s Panamanian companies. 

The other company listed as a target client, Macbridge, is owned by Tang Zhaomin, the mother-in-law of Chen Cheng, a negotiator involved in multi-million euro Enemalta deals.

According to one e-mail found in the Panama Papers, Schembri and Mizzi were set to receive payments of up to $2 million from 17 Black. 

A leaked report by the Financial Intelligence Analysis Unit (FIAU) found that 17 Black had received €161,000 from the local agent for the tanker supplying gas to the LNG power station, and two separate payments amounting to €1.4 million from Rufat Baratzada, a security guard at a construction site in Baku with links to the ruling elite.

Lovin Malta has also revealed that Fenech tried to cash over €1.5 million worth of cheques linked to 17 Black in 2019.

More recently, the Daphne Caruana Galizia Foundation has claimed that 17 Black forms part of an “Azerbaijani Laundromat,” a network of shell companies used to embezzle public funds out of Azerbaijan and pay bribes around the world.

Then-Justice Minister Owen Bonnici ordered an inquiry soon after the 17 Black reveal, with Magistrate Charmaine Galea leading the case.

However, the issue doesn’t stop there. In 2017, a magistrate ruled that there were enough grounds for an inquiry into money laundering allegations against Mizzi and Schembri over the Panama Papers scandal. 

Upon submitting his allegations to the magistrate, Busuttil was faced with a criminal complaint by Schembri, who reported the then-PN leader to the Police Commissioner accusing him of “fabrications and calumny”.

Schembri and Mizzi fought tooth and nail to halt the inquiry, winning an appeal before Judge Giovanni Grixti. 

A few months later, Magistrate Doreen Clarke accepted a separate request from Busuttil and Republikka to open an inquiry into the issue. However, the Panama Papers issue would form part of the 17 Black inquiry.

2. The Montenegro Wind Farm

17 Black is also at the centre of another magisterial inquiry linked to the dubious deal involving the purchase of a Montenegro wind farm by Malta’s state-owned Enemalta plc.

Reports by Reuters and Times of Malta uncovered that the Maltese government had agreed to pay out €10.3 million for a Montenegro wind farm that had just been bought for €2.9 million two weeks prior.

According to Reuters and the Daphne Caruana Galizia foundation, the other company linked to the deal, Cifidex, is allegedly connected to Turab Musayev, a former ElectroGas director.

Cifidex returned around €3 million to 17 Black after Enemalta purchased the wind farm and made an alleged €4.6 million in profit.

Chen Cheng had reportedly given a presentation to the Enemalta Board in 2014 in regards to the Montenegro project, where he named a company, Cifidex, as the sole agent for the project, even though the company was still a year away from purchasing the shares.

Cheng’s mother in law owns Macbridge, the other target company that was meant to funnel millions to Mizzi and Schembri’s offshore accounts. Mizzi was expelled from the Labour Party because of the scandal.

Enemalta still owns the wind farm, which was opened by Muscat in November 2019, shortly before he was forced out of office following Fenech’s arrest.

The deal is also subject to a police and Europol investigation, while Montenegrin MPs have opened up their own inquiry, which is near completion.

3. Electrogas

Malta’s controversial ElectroGas deal remains a main bone of contention in terms of corruption claims and mounting allegations increasingly pointing to it being the main motive behind the brutal assassination of journalist Daphne Caruana Galizia.

It was made subject to its own magisterial inquiry in 2020.

At the time of her murder, Caruana Galizia was sitting on a treasure trove of up to 200,000 leaked documents that if and when released were set to shake the country to its core, both financially and politically.

Financial issues seemed to be imploding at ElectroGas by February 2017, with Matthew Caruana Galizia revealing that the company’s bank balance plummeted from €450 million to €100,000 by that date.

However, it seems the company was able to get an extension on its state-guaranteed €360 million loan. It also was able to get a €40 million excise tax bill of its back.

A lavish €28,000 party at Level 22, the club on the top floor of Yorgen Fenech’s Portomaso Tower, was thrown to celebrate the extension. The 138-person guest list was filled with high-profile figures, including Muscat, his wife Michelle, Charlene Farrugia Bianco (Schembri’s assistant and Fenech’s alleged mistress) and Neville Gafa.

ElectroGas’ links to the Panama Papers scandal should have been enough, with Yorgen Fenech serving as the energy deal’s main directors and shareholders. 

Key ElectroGas shareholders Gasan Group have said they are pursuing an exit strategy from the project, but are yet to formally exit the deal. 

Mizzi, who was a key player in the deal, was recently hauled in front of the Public Accounts Committee to address concerns over the deal.

However, the sittings turned out to be a farce with politicians engaging in shouting matches while Mizzi refused to answer simple questions.

4. Vitals Global Healthcare: The controversial hospitals deal

Months of legal battles drew to a close by the end of 2019, with a magistrate ordering an inquiry into the controversial sale of three public hospitals and the involvement of former Ministers Konrad Mizzi, Chris Cardona, and Finance Minister Edward Scicluna.

Vitals Global Healthcare was chosen as the preferred bidder for a concession operating the Gozo General Hospital, St Luke’s Hospital and Karin Grech Rehabilitation Hospital in 2015.

There have long been allegations of major corruption in the deal, with the National Audit Office finding evidence of collusion. It has been confirmed that a Memorandum of Understanding was signed between government and VGH was signed months before a request for proposals was even revealed.

VGH was set to pocket more than €2.1 billion over 30 years for the concession, with the existing content of the hospitals including expensive medical equipment being passed on for practically free.

The unredacted contract revealed that taxpayers were paying VGH around €188,000 a day (€70 million a year) to provide hospital beds to the state, €1.2 million a year for the Barts medical school, and a further €1 million for helicopter service.

However, just 21 months into operations, VGH was forced to sell its concession to Steward Healthcare, leaving €36 million in debt.

Steward Malta’s president has delivered a sharp rebuke to VGH, describing it as “negligent” and calling out the government for failing to ensure it delivers on its obligations.

It took months to get the inquiry off the ground, with the ministers challenging the inquiry’s validity. It was initially approved by Magistrate Claire Stafrace Zammit but was shot down on appeal by Judge Giovanni Grixti. However, Magistrate Doreen Clarke would dismiss his arguments and order a criminal inquiry.

The three men have been accused of facilitating a “coordinated” “act of modern-day piracy”, “corruption and money laundering, among other crimes”.

Cardona and Mizzi resigned in the wake of the 2019 political crisis, while Scicluna stepped aside in 2020. The deal has been a key focus in the public inquiry over the Caruana Galizia murder, with each witness eager to pass on the blame to other parties.

Police recently raided Joseph Muscat’s home in connection with payments he had received from Accutor AG, a Swiss company run by lawyer Wasay Bhatti which had received €3.6 million from Steward Healthcare during the period it had taken over the hospitals concession from Vitals Global Healthcare.

Muscat received some €60,000 from Accutor AG in consultancy fees shortly after his 2019 resignation as Prime Minister in the wake of a political crisis.

However, Matthew Caruana Galizia has claimed that he was given a €540,000 contract and payments to him only stopped when the UBS bank closed down the company’s accounts.

After the raid, Muscat said he had prepared a file with all information regarding his relationship with Accutor AG, including projects he worked on and trips he had taken, right after the payment was received.

Adrian Delia has opened up a separate case to scrap the deal.

5. Cabinet ministers’ alleged misuse of public funds on Facebook

First exposed by Lovin Malta, Malta’s cabinet members were revealed to be using public funds and resources to boost their own Facebook pages instead of setting up official ministry pages.

Incomplete figures made public some years ago showed that at least €1.2 million were spent by ministries on social media over a 55-month period despite most ministries not having official Facebook pages.

Standards Commissioner George Hyzler found “widespread misuse of public resources” by ministers and parliamentary secretaries, sending his report to the National Audit Office for review. 

A magisterial inquiry led by Magistrate Doreen Clarke was opened, with Inspector Rennie Stivala from the Economic Crimes Unit leading the investigation.

According to Malta’s Criminal Code, any public officer or servant who for his own private gain “misapplies or purloins any money entrusted to him by virtue of his office” shall on conviction be liable to imprisonment of between two or six years and to a perpetual general interdiction.

A perpetual general interdiction means that one loses the right to hold public office or employment, and would also mean losing the right to vote.

Prime Minister Robert Abela declared the case “closed” because ministers were now rectifying their position according to draft guidelines prepared by Hyzler and approved by the government. Still, Cabinet members continue to breach the rules.

However, with millions siphoned away from public funds, it seems the case is far from over.

6. Court sittings claim Yorgen Fenech allegedly bribed Adrian Delia

State witness Melvin Theuma has told the court that Fenech had told him he had offered the PN a sum of money to put spokes in David Casa’s re-election campaign because the MEP was hounding him over his ownership of the Dubai company 17 Black.

Ever since his arrest, Yorgen Fenech’s relationship with top echelons in government have been exposed. The Opposition has not been immune to the criticism, with former PN Leader Adrian Delia’s links to the Caruana Galizia murder suspect being laid bare.

State witness Melvin Theuma revealed in court that Fenech claimed he offered the PN a sum of money to put spokes in David Casa’s re-election campaign because the MEP was hounding him over his ownership of the Dubai company 17 Black.

Hours later, Labour TV host Karl Stagno Navarra alleged that Fenech had offered the sum of money to Delia personally during a meeting at Fenech’s Ħaż-Żebbuġ ranch. He claimed Fenech paid Delia €50,000 and offered him a further €200,000 if Casa wasn’t elected.

Former Prime Minister’s Chief of Staff Keith Schembri has said under oath with “100% certainty that Delia accepted a €50,000 payment, while former PN Head of Media Pierre Portelli would meet with Fenech once a month to collect €20,000.

The claim is not new, with MP David Thake first raised the issue during a Xarabank show back in June 2019, a month after the European Parliament election.

Magistrate Doreen Clarke opened an inquiry into allegations following a request from police. It remains pending.

Leaked WhatsApp messages between Delia and Fenech have been confirmed as the “exact text” by the lead investigators. However, none of the messages so far relate to the inquiry itself. 

Lovin Malta has also revealed a wealth of exchanges between Fenech and Delia’s former right-hand man, Pierre Portelli – which included requests for money to pay staff at the PN and plots to collude against internal party rivals.

7. Melvin Theuma’s suicide attempt

Melvin Theuma’s suspected suicide attempt hours before he was meant to appear in court shocked the nation. Theuma’s wounds were grave and he only reappeared in court months later after a lengthy recovery.

While an outside perpetrator had been ruled out, there remain serious question marks as to why the state witness attempted suicide. 

His suicide attempt came a day before he was due to be cross-examined by Yorgen Fenech’s defence team in relation to unplayed recordings he had taken. 

These recordings included a wealth of fresh allegations, including the potential involvement of then-Police Commissioner Lawrence Cutajar in leaking information to the suspected killers. The recordings also include hints at other people involved in the assassination, including former minister Chris Cardona. 

However, the recordings also show Fenech’s confidante, Johann Cremona, pressuring Theuma to destroy the tapes. Investigators believe that Fenech could have been planning to murder Theuma.

BONUS: Pilatus Bank – Will more people be charged?

The now-infamous Pilatus Bank was made subject to its own inquiry after the European Central Bank shut it down over money laundering allegations. 

The inquiry was concluded in 2020 and late last year, Claude Anne Sant Fournier had been charged in connection with money laundering offences in his role as Money Laundering Report Officer (MLRO) and director of the bank, but several other names seemed to have eluded the police.

Most notable among them had been Pilatus Bank’s owner, Ali Sadr Hasheminajad, who has had his own legal battles in the US.

The bank has faced criticism for the veil of secrecy surrounding politically exposed persons (PEPs).

It has been at the centre of various inquires so far, including the recent inquiry involving kickbacks on the citizenship-by-investment scheme between Schembri and Nexia BT’s Brian Tonna. 

It also played a crucial part in the infamous Egrant inquiry which found no evidence that the Prime Minister or his wife held any Pilatus accounts as had been alleged by the now-assassinated journalist Daphne Caruana Galizia.

Several top officials held bank accounts at Pilatus, with a company at the heart of a US investigation on dirty money for Venezuelan politicians, Portmann Capital, transferring €120 million through the bank.

A network of over 50 companies and trusts secretly owned by Azerbaijan’s ruling elite also used accounts at the bank, funnelling millions into Europe. The Egrant Inquiry flagged the issue and said it merited further investigation.

It remains to be seen whether more people will be charged.

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