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17 Black: the only way out is to leave

Keith Schembri and Konrad Mizzi have nowhere to hide following the Daphne Project’s revelation that the company 17 Black, named in a leaked e-mail as the intended source of massive payments to their Panama companies, is owned by Electrogas director Yorgen Fenech.

The two men’s puny protestations of innocence, and the Prime Minister’s weak insistence on waiting for an ongoing judicial inquiry before taking any action, are crushed by the weight of this singular fact. And by the inevitable conclusion that many among the public have drawn from it: that Schembri and Mizzi stood to make huge personal gain from the multi-million euro power supply contracts signed by the new Labour government in 2013.

Besides, it is disingenuous in the extreme for Joseph Muscat to say he will depend on the conclusions of a judicial process when the inquiry has not yet started because he himself, along with Schembri and Mizzi, is trying to block it.

Fenech has not denied he owns 17 Black but has rejected the suggestion of any business links with politically exposed persons. Mizzi has insisted he has no connection with the Dubai-registered company while Schembri had spoken of having a draft business plan with 17 Black – and yet, incredibly, he has denied knowing who owned it.

The political implications of this story are enormous. In a court of law, one is innocent until proven guilty. In the world of politics, the principle of accountability demands that when the evidence screams guilt, the onus is on the accused to prove their innocence.

Faced with what verges on a smoking gun, and given the lack of explanations that might point to a more innocent scenario, the only option for Schembri and Mizzi is to resign or be suspended by the Prime Minister in order to clear their names. A trustworthy government cannot harbour members with such a dark shadow of suspicion hanging over them. Instead of fobbing off reporters with the excuse of “ongoing judicial inquiries”, what the Prime Minister should have told them is that he has demanded an explanation and failing a satisfactory one, he will be asking the two to step down for the good of the country.

Knowing how close Muscat is to Schembri, it is hard to believe he has not already been thoroughly briefed on the affair. He most certainly does not need a judicial inquiry to come to his conclusions. This begs justifiable questions with far-reaching implications: What does he know? What is keeping him from taking action? Does this scandal involve him too? Is he afraid of being brought down with the other two?

Given that the Prime Minister refuses to act and the police have known about the ownership of 17 Black for several months, there is another way forward: to set up an independent public inquiry to establish the truth.

It would report back within a set timeframe of, say, three months, and publish its report along with any documentation that backs up its conclusions. The inquiry board should be made up of persons of unimpeachable integrity, preferably hailing from among the ranks of retired judges, senior bankers and top police officers. 

Meanwhile, to salvage their already battered reputation the police must be seen to be taking decisive steps to investigate. The closeness of the Police Commissioner to the government does not augur well for a speedy and just conclusion of its investigation.

It is also of great concern that Brian Tonna and other officials of Nexia BT were in clear conflict of interest when they sat on the selection board for the award of the power station project, as they also acted as advisers to Schembri and Mizzi. The fact that the project was not awarded after a tendering process meant that scrutiny was removed from the Ministry of Finance. This fact raises more suspicions as to the governance of the award of public contracts and points to the need for an investigation by the European Commission. It is also a facet that the National Audit Office will surely take into consideration in its own probe of the contract.

Competing bidders for the power station project have every right to be given an explanation as to why money was meant to flow from the account owned by a director of Electrogas to the accounts held by Schembri and Mizzi.

There are too many indications of abuse of political power for Muscat to continue to ignore. This is an albatross around his neck and no amount of good economic news and electoral endorsement will relieve him from the moral responsibility to remove those who are implicated in this saga. Malta’s reputation as a respectable country that fights corruption and holds its politicians to account is once again being knocked by the Prime Minister’s refusal to clean the stables of his government that reek of corrupt practices. The consequences of this damaged reputation will eventually affect investment.

Most importantly, Malta’s citizens – many of whom will have confirmed their belief that crooks operate from the heart of government – demand answers. Given that this is a democracy, it is inconceivable that they should remain without answers for much longer.

This is a Times of Malta print editorial

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