Malta was left shellshocked last year when one of its most well-known citizens, journalist Daphne Caruana Galizia, was murdered in a car bomb.
A larger-than-life character in Maltese society, there is no doubt that Caruana Galizia often managed to singlehandedly set the political agenda with stories that kept her audience on the edge of their seats. Yet Malta remains far from reaching a consensus as to how she will go down in history and a fierce battle over her legacy has now been waged.
With this in mind, it is worth exploring how a number of Caruana Galizia’s biggest stories, which she never got to see closure on, have developed in the past year.
1. The Panama Papers and 17 Black
From the very start of the Panama Papers saga, Daphne Caruana Galizia insisted that Tourism Minister Konrad Mizzi and the Prime Minister’s chief of staff Keith Schembri had set up their offshore companies for nefarious purposes.
In the midst of the political drama, Caruana Galizia uploaded a cryptic blogpost in February 2017 linking a Dubai company called 17 Black to Mizzi, Schembri, Prime Minister Joseph Muscat and former EU Commissioner John Dalli.
After her murder, journalists from the Daphne Project leaked an email from financial advisory firm Nexia BT which named 17 Black as one of two companies that would transfer money to Mizzi’s and Schembri’s Panama companies. Further leaks from a FIAU report found that 17 Black had received over €1 million in payments from the Maltese agent of the LNG tanker in Delimara and from an unnamed Azeri national.
Although Nexia’s email clearly states that both companies were set up to operate in diverse business ventures around the world, Mizzi stuck to his original line of defence that he had set up his company for family planning purposes. Despite this blatant contradiction, the minister has not sued Nexia BT for misrepresentation.
As for Dalli, it remains to be seen what Caruana Galizia’s intentions were when she included his face in her blogpost.
Status: The contradiction between Nexia BT’s email and Mizzi’s statement has yet to be explained, unclear whether the police are investigating
2. The Prime Minister’s secret company
Caruana Galizia famously claimed last year that Egrant, a third Panama company set up by Nexia BT, belonged to Joseph Muscat’s wife and that it had received several payments from Pilatus Bank accounts belonging to Azerbaijan’s ruling family. Muscat denounced the story as “the biggest lie in Malta’s political history” and soon after called a snap election, which he won with a comfortable margin.
A magisterial inquiry concluded months after her murder appears to back Muscat’s version of events and discredit Caruana Galizia and her main informer for the story, former Pilatus Bank employee Maria Efimova. The inquiry could not find any evidence that Egrant ever belonged to Michelle Muscat and concluded that Caruana Galizia had, in all likelihood, gleaned her information about the Azeri payments from an FIAU compliance report into Pilatus Bank which flagged similarly-sized transactions, but which referred to completely different people.
Moreover, the inquiry conclusions said both Caruana Galizia and Efimova gave contradictory versions of events about which of them had shown the other alleged declarations of trust stating Egrant belongs to Michelle Muscat. Neither of them could produce a copy of this document, but the magistrate managed to obtain a copy from PN media chief Pierre Portelli, back then editor of The Malta Independent. However, forensic experts ruled that the signatures of a nominee director on the document had been forged, adding weight to Muscat’s argument that he was a victim of a colossal frame-up.
Despite this, the police have yet to prosecute anyone on the basis of the inquiry three months down the line, while Muscat has backtracked on his original promise to publish the full inquiry as soon as possible.
Status: Inquiry conclusions published, finding no transactions or proof of the Muscats owning Egrant
3. Keith Schembri’s ‘kickbacks’
Caruana Galizia was the first person to report on two cases of alleged kickbacks involving Keith Schembri and the Ta’ Xbiex-based Pilatus Bank. The first case involved kickbacks the Prime Minister’s chief of staff allegedly received from Nexia BT owner Brian Tonna from the sale of citizenships to Russian citizens and the second one involved a €650,000 payment from Schembri to former Times of Malta managing director Adrian Hillman. Schembri, Tonna and Hillman have all denied the corruption accusations.
Two separate magisterial inquiries were launched in May 2017 to investigate the reports, with Natasha Galea Sciberras taking charge of the Schembri-Tonna case and Josette Demicoli taking charge of the Schembri-Hillman one. There has been no official word about these two inquiry so far, even though the Egrant inquiry, which was launched just a few weeks before them, was concluded three months ago.
Although the Egrant inquiry, which was launched just a few weeks before these two inquiries, has been concluded, there has been no official word about these two cases so far.
Status: Magisterial inquiries into alleged corruption remain pending
4. Pilatus Bank and money laundering concerns
Daphne Caruana Galizia was the first to flag problems with Pilatus Bank, a small bank housed in Ta’ Xbiex’s magnificent Whitehall Mansions that was owned by Iranian businessman Ali Sadr Hasheminejad.
In May 2016, Caruana Galizia said that Brian Tonna was using Pilatus Bank to transfer funds to Keith Schembri – a case that is subject to a magisterial inquiry as mentioned in the previous point.
A year later, she published the Egrant story, as well as other blogposts claiming Pilatus was being used by wealthy elites, including the ruling family of Azerbaijan, to launder their money.
A few months after Caruana Galizia’s murder, Ali Sadr was arrested in the United States and charged with evading US sanctions on Iran by setting up complex offshore structures that allowed him to channel funds from a Venezuelan housing project through the US banking system. Although the scheme occurred before Pilatus Bank’s time, US prosecutors have accused Ali Sadr of setting up Pilatus Bank through dirty money.
While the case against Ali Sadr is still ongoing, his arrest sparked instant action in Malta, with the MFSA freezing the bank’s assets, appointing an administrator to oversee its operations, and eventually recommending the European Banking Authority to withdraw its banking license. Pilatus’ directors have responded by suing the MFSA for damages, accusing it of acting in a negligent, abusive and illegal manner when it clamped down on the bank while the court case against Ali Sadr was still pending.
The EBA also came down strongly on the FIAU’s application of EU money laundering directives when monitoring Pilatus Bank, prompting the EU Commission to announce it will usher in a series of binding demands to force the FIAU to tighten its anti-money laundering efforts.
This move, unprecedented in the EU’s history, has been harshly criticised by the Maltese government.
Status: Ali Sadr is still in court over evading US sanctions, investigations of alleged money laundering still ongoing
5. Vitals Global Healthcare’s financial woes
Caruana Galizia was the first person to reveal the Vitals Global Healthcare investors behind the successful bid to privatise three Maltese hospitals, which she claimed was actually a backroom deal.
She accused the investors of being “shysters”, publishing a due diligence report from an unknown company alleging that two foreign contractors had agreed to invest in the project, before the tender was granted, following lobbying by Keith Schembri, Malta’s Consul-General to Dubai Anthony Tabone and a “very senior former Maltese minister”.
According to this story, the two contractors in were growing frustrated at Vitals’ failure to find a bank willing to loan them money two years after the hospital contract was awarded.
While the contents of this due diligence report were never verified, it is certainly true that Vitals had run into severe financial problems, a situation that eventually forced them to transfer the contract to US giant Steward Healthcare. The Opposition has also demanded a full account of how Vitals had invested the estimated €50 million it had received in subsidies throughout their tenure in Malta, a question that has so far gone unanswered.
Status: Opposition leader Adrian Delia has sued the government and Vitals, demanding the courts scrap the contract due to Vitals failing to meet its contractual obligations
6. Chris Cardona and the German brothel
In one of her most salacious stories, Caruana Galizia had claimed that Economy Minister Chris Cardona and his consultant Joe Gerada had visited a brothel while on government business in Germany. The story included copious details, including quotes of Cardona while at the brothel.
Cardona reacted by suing Caruana Galizia for libel and imposing a €50,000 garnishee order on her, an unprecedented move against a journalist that prompted the government to change the law to prevent it from happening again.
Before her death, the magistrate presiding over the case had, on Caruana Galizia’s request, preserved Cardona’s and Gerada’s geolocation phone data for the night they were supposed to be at the brothel. Although this information could have vindicated Cardona had been telling the truth all along, the minister challenged its publication on the basis that the onus of proof should be on Caruana Galizia.
After a lengthy legal back-and-forth, Cardona and Gerada eventually both dropped their libel cases, therefore preventing the court from releasing the phone data.
Status: Inconclusive because the case was dropped before geolocation phone records could be published
7. Silvio Debono and the patch of prime land in Pembroke
Caruana Galizia had been warning for years that the government and hotelier Silvio Debono had struck a backroom deal for the transfer of public land in Pembroke that would allow Debono to develop a hotel and a high-rise luxury living complex.
In March 2017, she reported that Debono had attended a major real estate fair in Cannes to try and sell floors in the high-rise, despite the project not having a planning permit. As Caruana Galizia’s blogging about Debono intensified, the hotelier hit her with 19 libels – one for each sentence in a particular blogpost.
Over a year later, the Planning Authority indeed approved Debono’s project, with the PA’s executive chairperson making the unprecedented move of flying a board member to Malta on a private jet to vote in favour of it.
Status: Silvio Debono’s project has been approved, but an investigation by the National Audit Office into the land transfer is still ongoing
8. John Dalli’s Ponzi scheme
John Dalli with his daughter Louisa and Eloise Marie Corbin Klein in the Bahamas
Back in 2013, Caruana Galizia accused former EU Commissioner John Dalli of using his two daughters as a front to run a Ponzi scheme which had scammed evangelical Christians of millions of dollars.
According to the story, a certain Eloise Marie Corbin Klein, who was photographed with Dalli and one of his daughters in the Bahamas, had posed as a missionary and scammed elderly Christians of some $600,000 by convincing them to invest their savings into a bank account on the assumption that the money was going toward an African mining project. Instead, the money was funnelled into two Maltese companies owned by Dalli’s daughters and which are registered at their father’s Portomaso home.
A month after Caruana Galizia’s murder, Dalli’s two daughters, as well as Klein and three other US accomplices, were charged with fraud and money laundering, but Dalli himself escaped prosecution. This case is still ongoing.
Status: The court cases against the Dallis is ongoing
9. Problems with US correspondent banks
In November 2016, Caruana Galiza wrote that Joseph Muscat had travelled to New York along with Finance Minister Edward Scicluna, MFSA chief Joe Bannister and the Central Bank’s deputy governor Sandro Demarco in a last-ditch attempt at persuading US banks to set up, re-open or retain correspondent banking relationships with Malta’s banks.
She said that American banks – including JP Morgan and Wells Fargo – had over the previous year been systematically shutting down their correspondent banking business with banks in Malta due to the country’s reputational decline, and that BOV had been reduced to just one US correspondent bank.
This bank eventually cut ties with BOV, leaving the Maltese bank reliant on its relations with two European banks – ING Belgium and Banco Popolore di Sondrio – to process payments for customers in dollars. BOV’s website shows that its relationship with Banco Popoloare di Sandrio no longer exists, leaving it 100% reliant on ING Belgium.
Status: BOV’s list of US correspondent banks has shrunk in recent years with no explanation forthcoming
10. Adrian Delia and the Soho prostitution ring
Despite focusing the large chunk of her writings on people affiliated with the Labour Party, Caruana Galizia’s main target during the last few months of her life was PN leadership candidate, and eventual leader, Adrian Delia. During a heated leadership contest, Caruana Galizia reported that Delia had taken a cut from the proceeds of prostitution from Soho brothels run by his clients in the early 2000s in return for laundering the rest of the money to an offshore company.
In a further twist, it was later revealed both Delia and Chris Cardona – back then merely a Labour MP – were at one point joint directors of a company which owned the Soho brothels.
Delia vehemently denied the reports, accusing Caruana Galizia of inventing stories out of fear that she would “lose her grip” on the PN were he to win the election. While no new information on this story has emerged since Caruana Galizia’s murder, the Opposition leader has repeatedly refused a challenge by Labour to request a magisterial inquiry into the reports just as Muscat had done when the late journalist had written about Egrant.
Status: Inconclusive as no investigation has been launched and no new information has come to light