On a lovely day back in January 2014, Prime Minister Joseph Muscat cut the ribbon of a small bank within the grand, luxurious White Hall mansions in Ta’ Xbiex. When the white flag with an image of a lion sculpture went up, no one really raised an eyebrow.
Pilatus Bank, as it was called, was a quick-set-up affair. After the March 2013 elections, Pilatus Bank chairman Ali Sadr filed an application at the Malta Financial Services Authority to open shop here, personally providing €8 million in capital.
The job of the MFSA is to carry out a due diligence before issuing licences to make sure that there is nothing dodgy about the operation or the owners. Did it ask where those millions came from? Did it ask why Mr Sadr was at the time under investigation by the FBI? Because he was.
We do not know what they asked. What we know – according to a leaked report – is that the Prime Minister’s Chief of Staff, Keith Schembri, appeared to be on a “high level of familiarity” with the Mr Sadr and “he took a personal interest in the licensing process”. A case of “Joe, irranġalu ’il dan”?
For two years we were totally oblivious of this bank. But the bank was not oblivious to shady people – who flocked to open an account there. We’re talking, among others, family members of the Azerbaijani President. You might remember Azerbaijan from the 2012 Eurovision – they killed all dogs in the city so as not to leave any furry eyesores; or from the 2013 Organised Crime and Corruption ‘Person of the Year’ award given to their President, Ilham Aliyev .
We started emerging from our oblivion at Eastertime in 2016, when journalist Daphne Caruana Galizia uncovered the Maltese link to the Panama scandal. She revealed that star Cabinet minister Konrad Mizzi and chief of staff Keith-irranġalu-Schembri, the Prime Minister’s most trusted person, both had secret companies in Panama. There were another two secret companies belonging to Maltese people: one was Brian Tonna’s, the Nexia BT auditor who had his own desk in the Prime Minister’s office, and the other belonged to a certain mysterious ‘Egrant’.
Secret companies? Could it be that these people were obtaining money from illegal activities, and trying to hide it in secret companies? Could it be money laundering? As our Finance Minister, Edward Scicluna would say, “U ejja!”
Enter the scene the FIAU, the Financial Intelligence Analysis Unit, the government’s independent anti-money laundering agency. On the direction of its no-nonsense head, Manfred Galdes, the FIAU started digging deep. And he discovered rot. What sort of rot we did not yet know, but the FIAU sent a damning report to Pilatus Bank in May 2016 condemning it for, more or less, ignoring every rule in the money laundering book.
“The Bank concentrates on accommodating clients who value their secrecy above everything else,” said the report. Were the Pilatus people flustered? Not in the least; the lion flag kept flying. The report was, obviously, also sent to the MFSA – which, remember, is the entity responsible for keeping the country safe from dodgy investors. Surely the MFSA would take action, especially as the report specifically said: “[Pilatus Bank] exposes the jurisdiction [Malta] as a whole to a high level of risk” But time passed and nothing happened, except that Galdes resigned – perhaps he could not live with a money laundering bank under his watch.
The minute he resigned, the FIAU suddenly adopted a positive mantra and miraculously issued a clean bill of health for Pilatus Bank. “Thumbs up dude! Keep it up! You’re beautiful inside and out.” And that was that. Something was not right – but what?
We had to wait almost a year. On April 20, 2017, Daphne Caruana Galizia claimed that the mysterious secret Panama company Egrant was owned by the wife of Prime Minister Joseph Muscat. Both the Prime Minister and Ms Muscat rejected the allegations – but they would wouldn’t they? Caruana Galizia based her claims on the evidence of Maria Efimova, a former employee at Pilatus bank.
Lawrence Cutajar went for a lad’s night out
She revealed that she saw papers at the bank which allegedly clearly stated that Egrant belonged to Michelle Muscat and was in the process of receiving a transfer of some one million euros in its bank account in Dubai. That same night that Daphne Caruana Galizia revealed these allegations, NET news sent a crew to Pilatus Bank. And lo and behold they find Mr Sadr sneaking out of the emergency exit. He walked to his car wearing a silly smile and carrying a bag and a suitcase, and then drove off to the airport.
You would think that with news like that, the Police Commissioner would be roaring commands and sending half his fleet to seal the area, take fingerprints and what not. No, sir. Police Commissioner Lawrence Cutajar, a weak puppet of the government, went for a lad’s night out eating traditional rabbit. Chased by cameras, he said he had nothing to say or do.
From then on things went downhill for the credibility of Malta’s financial sector. The FIAU reports were leaked and it transpired that a bank account of Keith-irranġalu-Schembri was traced at Pilatus Bank. According to the reports, the Prime Minister’s chief of staff had received the bulk sum of €50,000, not once, but twice, from his buddy in Castille, Brian Tonna – potentially kickbacks to briberies in the (very fishy) selling of passports scheme.
The reports also claimed that Keith-irranġalu-Schembri had some sort of dealings – we’re talking €650,000 – with the then Allied Newspapers managing director Adrian Hillman, who also had a bank account at Pilatus.
And that Cheng Chen chap with whom Keith-irranġalu-Schembri and Konrad Mizzi struck a €320 million Enemalta deal, also had an account at Pilatus. So cosy it’s almost claustrophobic.
With all this cringing information, any other government in any other EU country would have said: “Whoa! What’s going on? We don’t want a money laundering reputation for our country. We must take action. MFSA wake up and smell the coffee!”
But the government stayed mum and so did the MFSA. Clearly the bank’s operations were being protected. From then on whistleblower Maria Efimova was constantly harassed, threatened and denigrated. She testified in front of the Magisterial Inquiry about the ownership of Egrant and the government turned her into an enemy of the state.
The election came and went, and shortly afterwards one commendable police inspector, Jonathan Ferris, was sacked from the FIAU. He had been investigating reports on the Egrant claims, was willing to speak out but to date, he fears for his life because he has not been given whistleblower protection status.
On October 16, Daphne Caruana Galizia was assassinated. Soon after, Efimova, in fear for her family’s safety, understandably, fled Malta for Greece. When she did not attend court hearings about a criminal complaint filed against her by Pilatus Bank, macho Maltese authorities said “Tsk, tsk,” and promptly issued a European arrest warrant to drag Efimova back here.
She lived in Crete for months until this Tuesday when she voluntarily surrendered to Greek authorities. Athens police sources said Greece is likely to grant her asylum to prevent her extradition to Malta. Halleluiah for Greek sanity.
Then the stars aligned some more on Wednesday, the day after she handed herself in. Her former boss Ali Sadr was arrested in the US on money laundering charges and stands the chance of being incarcerated for 125 years.
Ali Sadr was forced to step down but Pilatus has not yet been stripped of its licence. We wonder what needs to happen for the MFSA to do so. But most of all by now we stopped wondering who is pocketing money to keep closing an eye, and whose money is being laundered.
Meanwhile, in front of Whitehall Mansions, a real washing machine was placed on top of a mock plaque commemorating the opening of Pilatus Bank in Malta.
We’d laugh if we were not crying.
krischetcuti@gmail.com
twitter: @krischetcuti