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Alfred Mifsud accuses ex-partner of trying to sell Mid Med bribery story to Politico

Former Central Bank deputy governor tells court his estranged partner went to Daphne Caruana Galizia after failing to sell story to Brussels-based Politico

matthew_agius
Matthew Agius
12 October 2017, 12:20pm
The Former Deputy Governor of the Central Bank has told a court that corruption allegations published about him on an online blog were motivated by a personal vendetta on the part of his estranged partner, who had already tried and failed to sell the story to influential international political journalism publication, Politico.

Alfred Mifsud testified this morning in a libel suit he filed against blogger Daphne Caruana Galizia, over an online blog post published on her website in June, 2016, which alleged that he had received a Lm150,000 backhander from businessman Ronnie Demajo in the late 1990s, in return for replacing Mid-Med Bank's bank management software system with Eastpoint – a system for which Demajo was an agent.

Mifsud told magistrate Francesco Depasquale that the source of Caruana Galizia’s story was his ex-partner Anna Zelbst, his relationship with whom had ended acrimoniously in February, 2016.

“When I started my relationship with Zelbst, she knew him [Demajo] more than I and he had invited us to his house,” said Mifsud today. He explained that he hadn’t known that Demajo had been aware of his involvement with the software procurement. “The decision about the software was in the hands of the Board of Directors, ” he added.

He said he was “almost offended” at Demajo being referred to as the “fixer” for Endpoint. “‘Representative’ or ‘agent’ would have been more fitting. I discovered who the agents were when I went to sign the contract. There was no contact with him beforehand.”

The headline and timing of the story had been intended to cause maximum damage, he said. “It came out by coincidence three weeks before my appointment. I had a meeting with the Prime Minister on the same day. “


“It’s easy to throw mud. At first I wanted to leave the post because I didn’t want to damage the Central Bank, but I was almost constrained to stay. Had I gone then, it would have given the impression that the opposition has a power that even government doesn’t have - to remove me from the position, so I decided to stay on for at least a year.”

“I discovered that the same allegations that Zelbst had made to Caruana Galizia, she had made to the police in 2006. They had done nothing, but after the allegations were made public, they sent for me a number of times.”

He said he had “lost count” of the times he had gone to the CID offices this summer. Mifsud said he had provided the police with all the relevant documentation and had detailed the procurement process used by Mid Med bank in buying the software.”

Nothing happened after that, he said.

Malta’s Central Bank is a member of the  European System of Central Banks, continued Mifsud.

“They have strong code of ethics and would insist on the governor of the Central Bank of Malta to show them evidence of whether the police had prosecuted or planned to. The police were resisting this as they had found nothing incriminating, but the pressure was so strong that in my case the police had eventually stated that there was nothing.”

Mifsud said he was in no doubt that the story was calculated to damage his career prospects. “I’ve been in the industry for 47 years, this is the first time that somebody has made such an allegation about me. It was intended to make me lose my chance… the governorship is like a train that passes every five years. If you’re not on the platform you’ll miss it. I don’t have many five years left,” testified the former banker.

He explained that shortly after he had asked the Prime Minister not to consider him for the position of Governor because of the article, the opposition had called for his resignation, saying his position was untenable.

The title of the story was a statement of fact, he said. “‘Central Bank Governor-designate laundered portion of cash-bribes through third-party bank account,’ this is stated as a fact, although the police had investigated and nothing was found.”

The allegation was serious enough in itself, he said, but was made worse by the fact that he was in a position that was meant to ensure that this type of corruption doesn’t happen.

From the witness stand, Mifsud accused Caruana Galizia of not evaluating her sources properly. “When I spoke to Caruana Galizia, he said ‘you must appreciate that she is accusing me of things that happened 20 years ago. If she is so genuine, how is her conscience pricking her now?’ Someone with common sense can see this.”

Zelbst’s intention was to make maximum damage, he said, adding that she had first tried to sell her story to the influential American political magazine Politico. “But Politico is not Daphne Caruana Galizia, they asked her for evidence and there was none.”

The case continues in November.

Lawyer Pawlu Lia is appearing for Mifsud. Lawyer Joe Zammit Maempel is defence counsel to Caruana Galizia.

matthew_agius
Court reporter Matthew Agius is a Legal Procurator and Commissioner for Oaths. Prior to re...