Last Wednesday’s Dissett was a real eye-opener. It was the first occasion Konrad Mizzi had to defend himself in a sustained way, on national television. His task was to convince us that Panamagate was nothing but an exercise in partisan spin ahead of his election as deputy leader of the Labour Party.
I watched the programme with as open a mind as possible, assuming nothing and expecting no particular outcome. Having listened to Panamagate in Mizzi’s own words, I am convinced that it is no spin, and that Mizzi is unfit for purpose.
(1) We cannot say that Mizzi took backhanders, nor can we say that he didn’t. That, however, is beside the point, which is that he set up the financial structures that enable him to do so. As it happens, those structures also make it possible for him to evade tax. The second possibility seems like a peccadillo, but that’s only because the first is so damn serious.
(2) Mizzi tells us that he has chosen to submit his finances to a full audit. There are two reasons why that’s a non-starter. First, the whole point of jurisdictions like Panama is that they blow a big raspberry at audits and such bothersome things. It is simply not possible to conduct a proper external audit of a company in Panama.
Second, the only reason why Mizzi could choose to have his finances audited, is that he could also choose not to. The problem is that proper audit can never be a matter of choice. The very fact that Mizzi could choose, as a special concession and by his good grace as it were, is in itself a damning indictment of that audit process.
(3) In a vote taken in October 2015, the European Parliament moved a step closer to finalising a deal with Switzerland that will make it harder for EU citizens to hide cash in Swiss bank accounts. In May 2015, Switzerland and the EU had agreed to apply the 2014 global standard on the automatic exchange of financial account information promoted by the OECD.
Mizzi is a leading member of a government that wants Malta to be ‘the best in Europe’. Be that as it may, the 2017 presidency will certainly be a key moment in the story of Malta-EU relations. My question is: Given that the EU has declared war on banking secrecy, how could one possibly reconcile Mizzi’s dealings in a secretive tax haven with his government’s self-declared EU vocation?
(4) It so happens that Mizzi set up his trust and company at exactly the same time as Keith Schembri did his. Mizzi admits that this was no coincidence, and says he discussed the matter with Schembri. What that means is that the two people, who are closest to the Prime Minister, like to spend their time at the Castille water cooler, discussing how best to squirrel away money – preferably in places that are well away from the prying eyes of the taxman and the public. Which is nice.
(5) Mizzi tells us that his is an ‘international family’, and that he and his wife worked abroad and made a substantial amount of money.
There are two problems with this. First, Mizzi evidently thinks we are provincial bumpkins with no idea of what life ‘abroad’ is about. Unfortunately for him, Ulied in-Nanna Venut was written many decades ago. Most Maltese know that ‘abroad’ is not about making stacks of cash in a few mornings of work.
Second, his own declaration of assets does not support his claim. It tells us that Mizzi is not exactly the Rothschild type of international, but rather a man of average means. Certainly not the kind of means that call for financial wizardry in foreign jurisdictions.
(6) Mizzi says he is so obviously a politically-exposed person (PEP designation), that anything financial he does, or attempts to do, will be subject to a thorough process of due diligence.
Panamagate leaves Konrad Mizzi in a completely untenable position as government minister and deputy leader
I agree that Mizzi is indeed a PEP. I would add that he is politically exposed to deals that involve millions of euros, and that these deals have often been with the shady representatives of dodgy countries. Thing is, tax havens and due diligence are chalk and cheese. Because Mizzi chose Panama, his attempt to stand the PEP argument on its head fails miserably.
(7) Mizzi says that he “relied on his advisers” to set up the trust and company. Apparently these advisers also included Schembri. (Fascinating to know that the Prime Minister’s chief of staff is advising government ministers on money matters, but never mind.) His point is that if his decision to go to Panama was wrong, it was his advisers’ doing. He is bona fide, and whiter than white.
If that’s true, it tells us a fair bit about Mizzi’s sense of judgement. More precisely, it tells us it doesn’t exist. Even the most naïve of people know that tax havens are for dodgy people. If Mizzi was indeed misled on such a simple and straightforward matter, what are we to make of his sense of judgement on more complex matters of government?
It is for these seven reasons that I conclude that Panamagate leaves Mizzi in a completely untenable position as government minister and deputy leader of the PL.
He said on Dissett that foremost on his mind last week were knee and hip replacements, and that the Panama business was a “sideline issue”, but I doubt he fooled anyone. Neither did the Prime Minister, when he tried to get us talking about gay marriage. It is not known what Schembri has on his mind, but I expect it’s the water shortage in Delhi.
The Prime Minister has not so far lifted a finger to sort out the mess. On the contrary, he continues to defend Mizzi and Schembri. Maybe the Castille ménage à trois is too close and intimate a cohabitation. Three makes for merrier conversation at the water cooler.
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