Two images will remain seared in people’s minds from the latest crisis of confidence that has engulfed Prime Minister Joseph Muscat. One is of a man and a woman, owner and risk manager, respectively, of a shady bank, leaving the bank’s offices carrying bulging travel bags by a circuitous route late at night. The other is of Police Commissioner Lawrence Cutajar standing outside a rabbit restaurant in Mġarr repeatedly telling a Net TV reporter that he has no comment to make on whether the police are investigating the allegations made by journalist Daphne Caruana Galizia.

The most damaging of the allegations are that the Prime Minister’s wife, Michelle Muscat, owned Panama-registered company Egrant and that this company received a million-dollar transfer from an account held in the bank by the daughter of the President of Azerbaijan.

The allegations are highly alarming, to say the least. They are also potentially very damaging for Malta’s reputation as a financial services centre and come at an embarrassing time for the country while it holds the EU presidency. If true, this has the potential to be the biggest, most harmful political scandal in Malta’s history.

Joseph Muscat has vehemently denied that he or any member of his family are in any way connected to Egrant and will be suing for libel. Yet his reputation precedes him. Given Caruana Galizia’s track record in exposing the secret financial structures of leading members of government, and the Prime Minister’s refusal to tackle those revelations satisfactorily, it is no wonder that so many people are scandalised and outraged.

That outrage extends to the way the police appear to have dealt with the matter so far, with all the time in the world allowed for any incriminating documents to be taken away from the bank – as symbolised by those bags being carried away by the owner of Pilatus Bank, whether or not they contained anything of value to a police investigation.

It was only late on Thursday night – hours after the travel bags incident – that a government statement informed us  Muscat had asked his lawyers to contact the Police Commissioner and request him to “inform a duty magistrate tonight to investigate allegations published by Daphne Caruana Galizia, preserve all evidence and give instructions to the Attorney General and Police Commissioner to take all necessary steps”.

While the police are prevented by law from divulging what action they have taken in regard to a complaint or allegation, the seriousness of the situation demanded that the Police Commissioner, standing outside that rabbit restaurant, at least declare that an investigation was under way. That this was not done – and a ‘raid’ on the bank was carried out only the following morning – fills people with suspicion and dread.

These sentiments are, most unfortunately, wholly justified given the past failure of the police to act on a report by the Financial Intelligence Analysis Unit in the wake of the Panama Papers, which revealed Konrad Mizzi and Keith Schembri owned companies Panama.

The whole episode has continued to cast a shadow on the police and other institutions charged to protect us from crime and corruption. Those institutions include the Malta Financial Services Authority, which gave Pilatus Bank its licence to operate. 

As an EU Member State, the rule of law, transparency and good governance should be the norm. Under this government, those principles are under threat. Our institutions need to prove themselves all over again, and the only way faith in them can start to be restored is for a thorough, no-holds-barred investigation to be carried out, and to be seen to be carried out. This paper reiterates the call made by our sister newspaper yesterday for the Prime Minister to free all his financial advisers of their obligation to client confidentiality.

However, with the Prime Minister still in office, these State institutions cannot function with the serenity they require because he is involved – directly or indirectly – in their appointments. Effectively, the police, on whose evidence the magisterial inquiry now under way depends, are investigating their own boss. The police fall under the executive branch of government, headed by the Prime Minister. This is nothing less than a constitutional crisis and should present to Muscat a crisis of conscience. 

Given this situation, he really has no other option but to stand aside and appoint an acting Prime Minister until all the institutions conclude their investigations. He would then act accordingly.  

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