A request by former Opposition leader Simon Busuttil for a magisterial inquiry into the Panama Papers has been dismissed by the courts, after judge Giovanni Grixti ruled that the request was based on conjectures.

In his ruling, Grixti said that Busuttil had failed to provide substantial evidence linking a list of men – namely Prime Minister Joseph Muscat, his chief of staff Keith Schembri, Tourism Minister Konrad Mizzi, Nexia BT partners Brian Tonna and Karl Cini, Kasco director Malcolm Scerri and former Allied Newspaper managing director Adrian Hillman – to the crime of money laundering.

“This isn’t an issue of an error in formality or synthesis, but that the law required him to lay out the crime he was alleging and the involvement of the people allegedly involved,” Grixti ruled. “However, it seems [Busuttil] didn’t want to take on this responsibility, so much so that his request ends by stating that German MEP Werner Langen had publicly described the case as a textbook case of money laundering. However, the prerequisite for a magisterial inquiry should not be the opinion of a third party, but that the facts mention amount to a criminal act.”

Former PN leader Simon Busuttil

In his request, originally filed in July 2016, Busuttil stated several documented facts, starting with how Nexia BT partner Karl Cini had emailed Mossack Fonseca in March 2013 to kickstart the process for the opening of “a Panama company and possibly a trust”. It ends with how Werner Langen, as head of the European Parliament’s PANA committee, had warned the case stinks of money laundering at the end of a visit to Malta in July 2017.

However, Grixti argued that Busuttil did not spell out how exactly he was linking the seven men and the facts mentioned to the crime of money laundering.

“[Busuttil] referred to how Joseph Muscat had visited Azerbaijan without the press, how [former police commissioner] Michael Cassar and [former FIAU head] Manfred Galdes had resigned, and how Nexia BT had thrown our shredded paper that was collected by a Kasco van, but how are these related to the accusation of money laundering?” the judge asked.

Bags of shredded paper at Nexia BT’s offices. Published by the late Daphne Caruana Galizia

“Even if, for argument’s sake and by some stretch of the imagination, these occurrences did amount to individual crimes, how do they constitute money laundering? It is extremely unjust on the judicial system for a magistrate to be provided a roll call which, from [Busuttil’s] perspective, form part of an elaborate web and then be asked to extrapolate which of these occasions were a crime or an attempted crime.”

Simon Busuttil: ‘Court decision is unbelievable’

In a statement, the government said that this is the second judicial decision which cleared the Prime Minister and other people of wrongdoing, after the Egrant inquiry found no basis to the accusations that Joseph Muscat’s company owned a secret offshore company.

“The Prime Minister will respect the court’s decision, as he has always done,” the government said.

However, in a tweet, Busuttil described the court’s decision as “unbelievable”.

“How can a court refuse to open an inquiry when Mizzi and Schembri were caught RED-HANDED with a secret Panama company to pocket €5,000 a day?” he asked. “This cannot be right. Where can we go for justice to be served in Malta?”

In his tweet, Busuttil made to sure to tag EU Justice Commissioner Vera Juorova.

The evidence submitted by Simon Busuttil

-On 14th March 2013, Nexia BT partner Karl Cini emailed Mossack Fonseca to kickstart the process to open “a Panama company and possibly a trust”.

-Nexia BT belongs to Brian Tonna, who is very close to Joseph Muscat. Indeed, from the very start of Muscat’s administration, [Tonna] was given direct orders worth hundreds of thousands of euro and preferential treatment in several sectors.

-On 21st March 2013, Karl Cini sent a reminder to Mossack Fonseca, declaring that the ultimate beneficiary of one of these companies “will be an individual who isn’t Nexia BT and whose details will be passed over via Skype”. Cini also requested to be the contact person for three other British Virgin Islands registered companies which belonged to Schembri, Scerri and Hillman and for these owners to be hidden behind nominee shareholders.

-When applying for the three companies, the boxes “No Audit” and “Total Secrecy and Confientiality” were ticked.

-In the same week, Nexia BT registered a BVI company called Torbridge.

-On 21 April 2013, Muscat needlessly fired police commissioner John Rizzo.

Keith Schembri and Konrad Mizzi

-In May 2013, Mossack Fonseca set up its office in Malta, in Nexia BT’s San Gwann office blocks, with Brian Tonna as its sole shareholder.

-In December 2013, Socar, Gasol and a group of Maltese investors [in the ElectroGas consortium] were awarded the LNG power station contract. In the same month, Pilatus Bank was registered in Malta.

-In February 2014, Torbridge was transferred from Brian Tonna to Shanghai Electric Power (SEP) official Cheng Chen

-On 11 March 2014, SEP signed a deal with Konrad Mizzi for the sale of the BWSC power station for €220 million and for the sale of 33% of Enemalta for €100 million.

-In December 2014, Muscat, Mizzi, Schembri and [OPM media chief] Kurt Farrugia visited Azerbaijan for meetings with President Ilham Aliyev without any press, diplomatic corps or civil servants present. There, they signed an agreement for fuel procurement without anyone, and the Maltese public finds out through the Azeri press.

-In February 2015, the ministerial code of ethics was published and removed the need for ministers to declare their spouses’ assets.

-In March 2015, the National Audit Office published a report on the 2014 hedging agreements and criticised Konrad Mizzi for unprecedented ministerial interference in fuel procurement, which ultimately led Enealta to lose €14.1 million.

-In April 2015, Muscat returned to Azerbaijan, once again without any members of the press.

Joseph Muscat, Konrad Mizzi, Keith Schembri and Kurt Farrugia during a meeting in Baku with Azeri President Ilham Aliyev

-In June 2015, Konrad Mizzi informed Nexia BT that his Panama company will take care of his transactions and will be financed by “personal assets gained from business”. He said that his company Hearnville “has not started trading, and will eventually take money from consultancies and brokerage fees.

-In July 2015, Hearnville was transferred to a trust in New Zealand, on the same day as Gasol transferred its shares in Electrogas to the other power station partners in a deal that, according to The Malta Independent, amounted to tens of millions of euro. Gasol also happens to be a client of Mossack Fonseca.

-In August 2015, Pilatus Bank – owned by a 32-year-old Iranian who uses different passports from St Kitts and Nevis – obtained a Maltese banking license, after having been denied such a license by other European countries.

-Emails dates September 2015 show that Nexia BT had attempted to open bank accounts in several banks for these three secret companies.

-On 17th October 2015, Karl Cini informed Mossack Fonseca that Mizzi’s and Schembri’s companies will be used for operations in “recycling and remote gaming”.

-On 26th November 2015, Cini emailed Mossack Fonseca to ask about a bank’s requirement that Mizzi and Schembri deposit $1 million. Was that just the initial deposit? Is there a minimum running balance they had to leave in their accounts?

-On 2nd December 2015, after the BSI Bank in Panama informed him that the deposits must be of $1 million a year, Karl Cini confirms that Mizzi and Schembri agreed to open these bank accounts for their Panama companies. This is despite the salaries of a minister and chief of staff being significantly lower than the amounts of money they had agreed to deposit.

German MEP Werner Langen

-On 10th December 2015, Mossack Fonseca informed Nexia BT it had encountered problems opening these bank accounts, because the bank they were planning to use had just been sold to another bank, whose owners were insisting that account holders be in possession of a Panamanian visa.

-On 15th December 2015, Cini responded that he is gathering the necessary information. The public email correspondence ends here, because that’s when the hack on Mossack Fonseca’s servers ended.

-On 24th February 2016, Mizzi declared that he opened a a New Zealand trust to take care of his family assets but doesn’t mention that this trust owns a Panamanian company.

-On 27th February 2016, it was revealed that Schembri has the exact same financial structure – ie. a New Zealand trust that conceals a Panamanian company.

-On 11th March 2016, photographs were published of shredded paper being removed from the office block of Nexia BT and being picked up by vans belonging to Schembri’s company Kasco.

-On 3rd April 2016, the International Consortium of Investigative Journalists (ICIJ) published the Panama Papers.

-On 27th April 2016, Michael Cassar resigned as police commissioner a few hours after recieiving a FIAU report into these secret companies.

-On 2nd August 2016, Manfred Galdes resigned as head of the FIAU.

-When the PANA committee visited Malta in 2017, its head of delegation MEP Manfred Weber declared that the case indicates “a textbook case of money laundering”.

-Money laundering or the attempt to launder money is a crime punishable by singificantly more than three years in prison, as per article 546(1) of the criminal Code.

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Tim Diacono

Tim is interested in the rapid evolution of human society and is passionate about justice, human rights and cutting-edge political debates. You can follow him on Instagram or Twitter/X at @timdiacono or reach out to him at [email protected]