As Malta makes international headlines for all the wrong reasons, Christian Peregin wades through the information overload to make some sense of John Dalli’s fall from grace.

John Dalli in brief

John Dalli, an accountant by profession, is a veteran Maltese politician, first elected in 1987, who served most notably as a Finance Minister and Foreign Affairs Minister.

In 2004, he contested the Nationalist Party’s leadership against now Prime Minister Lawrence Gonzi. He was subsequently re-appointed to Cabinet but resigned months later amid corruption and nepotism allegations, citing attacks from other PN members.

He was rehabilitated into the party before the 2008 election after the corruption allegations turned out to be fabricated.

In 2010 he was nominated as EU Commissioner, a move largely seen as kicking him “upstairs”.

Mr Dalli has two brothers: a priest and a controversial businessman who stands charged with importing a boatload of what he thought was cannabis but later turned out to be soap.

He is also known to have several business links in Libya.

First european commissioner to resign over wrongdoing

The European Commission is the executive arm of the EU. It acts like a Cabinet government of sorts, with 27 ‘ministers’ (known as Commissioners), each nominated by one of the 27 EU member states.

Mr Dalli is Malta’s second EU Commissioner since EU membership in 2004, succeeding Joe Borg, who was responsible for Fisheries.

Mr Dalli was given the portfolio of Health and Consumer Policy.

Although each Commissioner is nominated by their country of origin, they are expected to protect the interests of the entire EU, not their home state.

The basic annual salary of Commissioners is approximately €250,000, perks not included.

Mr Dalli holds the dubious honour of being the first Commissioner to resign by himself over wrongdoing.

In 1999, the entire Commission headed by Jacques Santer resigned after a fraud scandal involving Édith Cresson, which prompted the setting up of the EU’s anti-fraud office.

Why did he resign?

Mr Dalli resigned following an investigation by the EU’s anti-fraud office (OLAF) which found that a Maltese businessman (who has since been named as Silvio Zammit) asked for money to influence tobacco legislation.

The resignation came after the President of the European Commission José Manuel Barroso gave Mr Dalli a summary of the findings of the investigation, which was prompted by a complaint by tobacco producer Swedish Match.

The OLAF report did not find any conclusive evidence of the direct participation of Mr Dalli but “did consider that he was aware of these events”.

Mr Dalli denies the allegations. He first said he resigned to be able to defend his name freely but later stressed that he was asked to resign by President Barroso.

Who is Silvio Zammit?

Mr Dalli has confirmed that the Maltese businessman at the heart of these allegations is Silvio Zammit, who resigned as deputy mayor of Sliema local council to clear his name.

Mr Zammit is a businessman with fingers in many pies. He began his career working at the family-owned kiosk in Sliema, famous for its mqaret (a traditional Maltese sweet).

He now owns the Sliema restaurant Peppi’s and other business interests, and controversially brings the animal circus over to Malta.

He is a friend who apparently assisted Mr Dalli in his electoral campaign, when Mr Dalli contested the Sliema district in 2008. He also canvassed for other PN politicians contesting the Sliema district in the past.

What does tobacco have to do with it?

As Health Commissioner, Mr Dalli has spearheaded several anti-tobacco initiatives.

Swedish Match, the company which filed the complaint to the European Commission, sells a smokeless chewing tobacco called Snus that is banned across the EU, except in its home country Sweden. The company wanted Mr Dalli to overturn this ban, opening up the EU’s lucrative market to its product.

Like many other industries, businesses and special-interest groups, Swedish Match does its Brussels campaigning through a lobby group called the European Smokeless Tobacco Council.

(The chairman of Estoc is a spokesman for Swedish Match, Patrik Hildingsson.)

Olaf director general Giovanni Kessler said Mr Zammit asked this company for a “conspicuous” sum of money to influence legislation under Mr Dalli’s portfolio.

What did Dalli do wrong?

According to the OLAF chief, Giovanni Kessler, there is “unambiguous circumstantial evidence” that “he was aware” that someone close to him had been repeatedly trading in influence with Swedish Snus tobacco lobbyists.

“He was aware of this and did nothing to block, stop or report these events.”

Mr Dalli denies the allegations, though his version of events has been a bit confusing.

During an interview with New Europe, Mr Dalli presented an e-mail sent to Mr Zammit which shows the tobacco lobbyists were willing to pay for a meeting.

He called this an attempt to “bribe” but said Mr Zammit “never asked me for any meeting with these people”.

He later admitted to having two meetings organised by Mr Zammit, one with a smokeless-tobacco lobbyist in August 2010 and another with a Maltese lawyer who asked about Snus in January 2012.

However, he insists the meetings did not influence him. He also insists that Mr Zammit never communicated to him the lobbyists’ later request to meet him against payment, which was made in March.

Isn’t lobbying legal?

Usually, yes. Lobbying is an important tool for EU institutions but Brussels places great emphasis ontransparency in lobbying. Lobby groups must enrol themselves onto a register (Estoc is registered), to facilitate public scrutiny and ensure transparency.

In this case, the Snus lobbyists were in talks with Mr Zammit (as an unofficial middleman) to schedule an informal meeting with Mr Dalli. According to the only e-mail in the public domain, the lobbyists were prepared to pay for the meeting to be organised. Paying middlemen to set up meetings is a practice that is tolerated in Brussels, though this is a grey area that is bound to be discussed more seriously in the aftermath of this scandal.

But according to OLAF, the problem in this case was the demand for money in return for “influencing” tobacco legislation. The OLAF chief equated this to a friend of his demanding millions to change the findings of an investigation. He described it as “trading in influence”, which is a crime.

However, he pointed out that no transaction was concluded between the company and the entrepreneur and no payment was made.

So, what happens next?

Mr Dalli has a history of being accused of misdeeds that were not fully proven, which begs the question: will he be exonerated again?

He is claiming that this was “a systematic plan of entrapment”, playing into the narrative that this was an attempt by big tobacco to get back at him for his tough stance.

Meanwhile, OLAF’s report has been sent to the Attorney General in Malta to see what action to take against Mr Zammit and possibly Mr Dalli.

According to the Criminal Code, the Maltese courts have jurisdiction over offences of trading in influence involving Maltese nationals, even if the crime involves an international organisation, body or institution. It is also up to the Maltese authorities to make the full report public, which would help build a much clearer picture of what sort of evidence exists against the two men.

Meanwhile, the Prime Minister must nominate a new Commissioner to replace Mr Dalli. Among the main contenders are Foreign Minister Tonio Borg, former EU Commissioner Joe Borg, European Court of Auditors dean Louis Galea and Speaker Michael Frendo.

The new Commissioner will have the tough task of rebuilding Malta’s image in the EU. However, this can only begin in earnest once the key questions are answered and Mr Dalli is proven innocent or guilty.