The government has submitted a 44-page reply to a rule of law report compiled by MEPs. The report called for the immediate removal of politicians implicated in corruption. Jacob Borg fact checks some of the claims made in the reply.
An excerpt from a transcribed FIAU report about the €100,000 payment between Mr Tonna and Mr Schembri.Claim: “The government does not interfere with the work of the police, and is not privy to its detailed reasoning in respect of individual decisions as to whether or not to prosecute.
“It can only infer that on police consideration of the FIAU reports there was simply not enough in the way of evidence to launch a full criminal investigation against the individuals in question”.
Fact: A police investigator’s job is to gather evidence. FIAU analytical reports are meant to be the starting point for the evidence gathering process.
FIAU reports are sent to the police when the agency has a reasonable suspicion that a person is involved in money laundering. This is a crime which carries a maximum prison sentence of 18 years.
The FIAU gave the police evidence of a €100,000 ‘loan’ payment to the Prime Minister’s chief of staff Keith Schembri by his friend and accountant Brian Tonna.
The FIAU suspected that the ‘loan’ may in fact have been a kickback on passport sales. There was no evidence of the original €100,000 ‘loan’ payment from Mr Schembri to Mr Tonna. It said the exact facts surrounding this payment could only be determined conclusively by a law enforcement body. But no such investigation into the evidence ever took place.
In a separate report, the FIAU presented evidence of offshore payments amounting to €650,000 from Mr Schembri to Allied Newspaper’s former managing director Adrian Hillman.
A list of all the transactions was given to the police. No investigation ever took place.
Both the Police Commissioner and Attorney General were aware of FIAU investigations into top government officials.Claim: “An investigation order [by the Attorney General] is for the collection of material evidence; it is not an order to request the police to initiate an investigation. A police investigation would ordinarily be in progress before an investigation order is requested’
“Investigation orders are highly intrusive and it is for that reason that they are only granted by the court and only in circumstances where the threshold of reasonable cause has been met.
“Therefore, the Attorney General will only make a request for an investigation order on the basis of a dossier of evidence, and not mere media reports”.
Fact: There is no doubt that a police investigation would “ordinarily” be in progress before an investigation order is requested.
The point of contention is the fact that the Attorney General did not act in light of the police’s unwillingness to investigate two top government officials.
Attorney General Peter Grech, who is also chairman of the FIAU, was aware the agency was investigating government officials. Although he may not have been privy to the contents of the FIAU reports, he would also have been aware of the lack of police investigations.
Given this, an investigation order to ensure the courts collect “material evidence” would have been within his powers.
The relevance of the government citing an investigation order as being “highly intrusive” is hard to understand, given that we are talking about a crime that carries an 18-year jail term.
An e-mail from Mr Schembri and Dr Mizzi’s financial advisers Nexia BT indicates they were aware of the attempts to open $1 million accounts for their Panama companies. The codes in the subject line tally with the internal Mossack Fonseca client codes for their companies.Claim: “Not all analytical reports by the FIAU will necessarily lead to a criminal investigation. The FIAU is an intelligence agency; it does not conduct criminal investigations, as those are a matter for the police…the evidence gathered by the police to support a conviction needs to stand up to the scrutiny of the court process”.
Fact: This statement is factually correct. The FIAU does not conduct criminal investigations. Its role is to pass on reports to the police to conduct criminal investigations into suspected money laundering cases.
No attempt appears to have been made to gather evidence
The police were first requested by the FIAU to investigate Keith Schembri and Konrad Mizzi in April 2016, shortly after the Panama Papers leak. Among other things, the leak showed Mr Schembri and Dr Mizzi’s attempts to open up bank accounts requiring annual deposits of close to $1 million.
Their secret offshore structures were not declared to the tax authorities. The police never sought to investigate why the companies were set up to conceal Mr Schembri’s and Dr Mizzi’s ownership. Neither did they investigate how they intended to finance the $1 million in annual deposits.
According to the police, there was no reasonable suspicion of a crime having been committed by the two men. This conclusion was reached without any sort of police investigation.
No attempt appears to have been made to gather evidence, let alone put it up to court scrutiny.
Claim: “The mission report questions why the prosecution of the Russian whistleblower Ms Maria Efimova moved fast, whilst investigations concerning senior govern-ment officials named in the Panama Papers and under suspicion based on the leaked FIAU reports are said to be moving slowly.
“The answer is simple: the allegations against Ms Efimova were of a straightforward nature (an illegitimate expense claim) and the evidence was unequivocal.
“In contrast, the allegations of money laundering and corruption are complex and the evidence is nuanced.
“If challenging investigations are rushed then mistakes will be made and the police would no doubt be criticised more.”
Fact: This government statement appears designed to attempt to smear the Egrant whistleblower.
Government officials, including the Prime Minister, generally refuse to comment about court cases which are sub judice.
Yet in the government’s reply to MEPs, it has already been decided that the evidence against Ms Efimova was “unequivocal”.
No such statements have been made about the unequivocal evidence found in the Panama Papers.
By saying that the allegations of money laundering and corruption are complex and the evidence is nuanced, the government is only reinforcing MEPs’ arguments that Dr Mizzi and Mr Schembri should be removed from office and properly investigated.
As the government correctly pointed out, complex money laundering investigations take time.
This begs the question why the police have wasted close to two years without even trying to actively collect evidence.
In July 2017, the German authorities announced they had obtained the Panama Papers data and were willing to share it with other authorities. Yet no request for the data was filed by the police.
This led the German Federal Police, on their own initiative, to offer the local authorities the data they have about Dr Mizzi and Mr Schembri.