There is a sense that the country will be holding its breath tomorrow as a sizeable delegation of MEPs is in Valletta for a day-long series of meetings with top government officials, politicians, journalists and representatives of private entities in relation to the Panama Papers.
The MEPs are members of the European Parliament committee of inquiry set up in the wake of the Panama Papers leaks, which have so dominated the local political landscape over the past year. Malta is one of four countries to receive fact-finding missions.
The committee is investigating the way EU law may have been contravened or badly administered in relation to money laundering, tax avoidance and tax evasion. Committee members regard as unacceptable the levels of secrecy in offshore practices exposed by the leaks, because this allows tax authorities to be defrauded, corruption to be facilitated and proceeds from illegal activities to be laundered. The MEPs are attempting to examine these practices and will come up with recommendations to combat them more effectively in a report they will present to the Parliament later this year.
What the committee will not do is act as a board of investigation into specific cases involving offshore companies – such as those set up by Konrad Mizzi and Keith Schembri. Crucially, however, the MEPs still want to look into a few of these cases to better understand the hidden mechanisms behind the financial malpractices they want to curb.
This is why Dr Mizzi and Mr Schembri have been invited to appear, as have representatives of the Maltese audit firm responsible for setting up their secret financial arrangements.
However, in the dock tomorrow will be more than these individuals, at least those who turn up. The spotlight will be on the institutions entrusted with enforcing financial laws. Among them will be two crucial players in the Mizzi/Schembri affair: the Financial Intelligence Analysis Unit and the police force.
Their representatives, the unit’s director and the Police Commissioner, as well as others invited to the meetings, will have some tough questions to field.
It is likely, for example, that the committee members want to know what legal loopholes were exploited or regulations breached in this case and how easy it was to do so. They will be very interested in what happened to the investigation carried out by the FIAU and whether the police took any action as a result of it. Crucial to their work will be gaining an idea of what obstacles stood in the way of carrying out an effective follow-up.
From day one, the government has evaded legitimate questions about Mizzi, Schembri, their Panama companies and the apparent lack of action taken in their regard. It now falls to an EU institution, representing the people of Europe no less, to try to get to the bottom of our own institutions’ failures.
Clear replies to the MEPs’ questions will greatly assist them in drawing their conclusions. The question is, will all the participants cooperate? Some may face legal confidentiality constraints. One hopes they would not invoke them without a solid basis for doing so.
The committee’s ultimate aim is to help stem the moral decline and social injustice inherent in the sort of financial wrongdoings under scrutiny. The participants have a moral obligation, and a responsibility to the country, to help the committee achieve that aim, within the confines of the law.
The country is watching.