It will not be the greatest show on earth – Donald Trump’s presidential campaign has the lock on that. But the European Parliament’s Panama Papers inquiry, meant to begin in September and to last all the way through Malta’s presidency of the EU, will be a showcase of the best in Europe. Not least of Konrad Mizzi and Keith Schembri, whether or not they show up.
Mizzi and Schembri are already hyping up the event just by showing that they will weasel out of it if they can. Some ranking members of the inquiring committee have already made clear they are interested in grilling the two. So the European press will pay even more attention should the committee be snubbed.
When The Malta Independent asked Mizzi and Schembri if they intend to show up, they both answered identically: “If I receive such a request and justification, I will reply accordingly.”
It’s difficult to decide what’s more striking in those dozen words. Is it the emptiness of the reply?
Or is it the pretence of dignity by people who have behaved so disgracefully?
They will want to examine the justification, eh? A pan-European committee is set up to look into the Panama Papers, in which Mizzi and Schembri are both mentioned but… the only serving European minister who set up a Panama company while in office, and the only serving Prime Minister’s chief of staff who did likewise, want reassurance that the EP has the right justification to question them.
To avoid their personal embarrassment, Konrad Mizzi and Keith Schembri will have to throw a few people under a bus
It’s public knowledge that the committee’s remit is to look into systemic tax evasion, tax avoidance and money laundering as it affects Europe, in particular whether member states have been relaxed about the 2005 anti-money laundering directive and failed to punish those who breached the rules.
As for why there’s a pan-European interest in such an inquiry, it’s simple. If some member states are easy on tax avoidance, tax evasion and money laundering, it’s other Europeans who pay the price. (Tax avoidance and tax evasion alone cost Europe, on one estimate, some €50-70 billion per year.) They will individually have to pay more in taxes and some states will have to contribute more to European funds. The unfairness will undermine European solidarity and trust in the rule of law.
So, yes, Europe has a direct interest in the behaviour of Mizzi and Schembri. More than that, Europe has an interestin their attitudes, given that the two have never acknowledged they did anything wrong.
They are two of the three most important members of a European member State’s governing coterie. If they believe that using the financial vehicles they set up is nothing wrong, the EP will want to know how that squares with the Maltese government’s avowed determination to be strict about European financial directives.
What’s most striking about Mizzi and Schembri is the sheer fact that they are reserving the right not to appear before the committee.
Let’s put that into perspective.
In early June, soon after the committee was established, it was announced (this was before the Brexit referendum) that it would want to hear from the (then) UK chancellor of the exchequer, George Osborne. Not because he personally had done anything suspect but because the UK has territories which are deemed to operate as tax havens.
Did the British press go ask Osborne if he intended to testify before the committee? No. They simply assumed he would, as part of his duties of a responsible member State. The committee has been given more clout than the two predecessors that inquired into the leaks about Luxembourg’s financial practices in 2014 and Osborne would have shown it the respect it deserved, while still standing up for the UK’s rights.
The UK, a major member State, would have shown up when invited. If Mizzi and Schembri don’t turn up, what will they be saying? That what’s good for the UK isn’t good enough for Malta, the best in Europe?
In fact, a no-show will still be a show. Indeed, a circus with one act following another. People have already pointed out that the EP, if snubbed, can make Malta’s presidency more difficult next year. But it’s more than that.
To avoid their personal embarrassment, Mizzi and Schembri will have to throw a few people under a bus.
The first in line could be Leo Brincat, due for his Court of Auditors’ hearing in late September. He’s already going to be given a tough time for his parliamentary vote of confidence in Mizzi earlier this year. If Mizzi and Schembri were to make clear, before Brincat’s hearing, that he would be appearing before the EP, Brincat should be able to survive.
If not, it’s a toss-up. The EP might grab this early chance to hold Malta accountable and Brincat, a man who’s been loyal to the Labour Party for over four decades, will take the bullet for men who expect Labour to be loyal to them.
Brincat’s hearing comes very early in the inquiry’s mandate, so Mizzi and Schembri can probably leave open the question of their attendance, running out the clock till his hearing is over. But they cannot run out the clock all the way through June, when the inquiry comes to an end. Especially not if Mossack Fonseca agrees to the EP’s request to send a representative to meet the committee.
Rest assured the avoidance itself will make the news. The EP will see to that. But the press will need no bidding. A cold war between a member State, in charge of the presidency, and the EP? When the member State is John Dalli’s? The press lobby knows a tasty bone when it smells one.
The next people thrown under the bus will be every Maltese representative whose press conference is hijacked by the issue.
The EU presidency isn’t just about being the MC for six months. It’s coveted – as well as daunting – because it’s a rare opportunity to push matters of particular national interest further up Europe’s crowded list of priorities. If our government’s behaviour alienates our partners, we will have wasted an opportunity that comes once in a generation.
It gets worse. Being seen to have not taken serious action following Panamagate – I wouldn’t want to be the Maltese representative who tells the press that Mizzi did, after all, apologise and promise to work harder for the nation, despite having a global family – means that we lose any moral authority to defend our financial services industry as best we can.
Ultimately, it will be the entire country that’s thrown under the bus. With luck, it will be a Maltese bus, stuck in log-jam traffic, so we can just crawl out, dust ourselves as best we can, draw the right lessons and live another day.
ranierfsadni@europe.com