Like the bloodstains on Lady Macbeth’s hands, the political crimes of this government will not wash away. The more the government tries to focus our attention away from the Panama Papers, from the dubious billion-dollar Vitals hospital deal and from its links to known dictators, the more these stories keep appearing like Banquo’s ghost to haunt it.
The latest in a never-ending list of scandals concerns Pilatus Bank. Seyed Ali Sadr Hasheminejad, the bank’s shareholder and chairman, is in a United States prison facing charges involving money laundering that could see him spend the rest of his life behind bars.
In its short existence since being licensed in January 2014, Pilatus Bank has become a household name in Malta for all the wrong reasons.
A 2016 report by the Financial Intelligence Analysis Unit, the agency responsible for combating money laundering, raised the concern and alarm that Hasheminejad “is subject to a criminal investigation… in a foreign jurisdiction for money laundering, illegal money transmission”.
That same FIAU report examined a series of payments made by three Russian individuals who had applied for registration under the Individual Investor Programme to an account held at Pilatus Bank by Brian Tonna and subsequent payments made by Tonna to another account at Pilatus, this time held by Keith Schembri, the Prime Minister’s chief of staff. The FIAU report noted that notwithstanding “the highly suspicious nature of these transactions and the numerous requests made by the FIAU on these bank accounts... Pilatus Bank plc has, to date, chosen not to file a suspicious transaction report with the FIAU”.
The FIAU report went on to conclude that, in the circumstances, “the information available to the FIAU is deemed to be sufficient to conclude that a reasonable suspicion of money laundering and/or the existence of proceeds of crime subsists”.
This and other FIAU reports should have resulted in full-scale investigations by the police and other authorities and the suspension of the bank’s operating licence.
The biggest disappointment in all this is, yet again, Finance Minister Edward Scicluna
However, instead of going for the culprits, the government deemed it more important to sack the FIAU officer who was investigating Pilatus Bank. And, in the process, the frustrated director of the FIAU resigned, as did the then police commissioner when landed with the FIAU report requiring his action.
Little wonder the Pana Committee of the European Parliament called on the European Banking Authority to “assess whether the MFSA [Malta Financial Services Authority] has fulfilled its obligations as national supervisory authority in view of the apparent lack of action against Pilatus Bank and Nexia BT that continue to hold a licence to provide services in the EU”.
So when Labour MP Glenn Bedingfield stood up in Parliament last Wednesday and pointed out that the serious criminal charges levied against the shareholder and chairman of Pilatus Bank in the United States are not related to activities carried out in Malta, I, for one, was not impressed.
His statement is an indictment of our police, our regulatory authorities and our government. Our police and regulatory authorities repeatedly failed to take action against the bank, despite being fully aware of what was going on behind the clean facade of Whitehall Mansions.
I am even less impressed by what the Prime Minister said. He tried to shift the blame to the civil servants who processed the bank’s application. Joseph Muscat has made it abundantly clear how he intends to defend himself against accusations of impropriety. He is going to deflect the charges onto public servants. “It wasn’t me. It was the government officials.”
I urge public officers to keep this in mind when political pressure is put on them to bend or even break the rules.
The biggest disappointment in all this, however, is, yet again, Finance Minister Edward Scicluna. He has again rendered himself an accomplice by his inaction.
He stood by, not lifting a finger to stop the damage being caused to Malta’s reputation by the Prime Minister’s inner circle. He stood by and did nothing when Manfred Galdes, then head of the FIAU, which falls under Scicluna’s ministerial responsibility, felt he had no option but to resign in frustration. Scicluna remained silent too when Jonathan Ferris was sacked from the FIAU and denied whistleblower protection.
He stood numb as report after report showed the MFSA, which until recently fell under his political responsibility, was failing to take action against Pilatus Bank.
In the meantime, Malta’s name is being dragged through the mud. Scicluna has both the academic and professional background to understand exactly what was happening under his watch and what needed to be done to stop the rot. Few in Malta are better placed to know and comprehend the extent of what was going on.
We all expected better of him. Yet, he continues to defend his Cabinet colleagues at the expense of his countrymen.
His betrayal of Malta’s interests is the unkindest cut of all.
Mario de Marco is the Opposition spokesman on finance.