Motion on investigation into Schembri soundly rejected by Labour MPs

Parliament rejected a motion on whether the Prime Minister should fire his chief of staff Keith Schembri and whether MPs should be allowed to grill him.

The motion, tabled by independent MP Marlene Farrugia, had called on Muscat to insist on Schembri’s immediate resignation. However, all Labour MPs voted againstt it, and it was soundly defeated by 30 votes in favour and 35 votes against.

It also calls for the establishment of an ad hoc committee – composed of four Opposition MPs and three government MPs. The committee will investigate Schembri and any other witnesses over the chief of staff’s ownership of an offshore company, as was revealed in the Panama Papers.

Farrugia is proposing that the investigation last for no longer than two months, after which the committee will decide whether to censure Prime Minister Joseph Muscat over his declared trust in Schembri.

Farrugia had originally presented a no confidence motion against Schembri, but this was turned down by Speaker Anglu Farrugia who ruled that chiefs of staff are not answerable to parliament but to the ministers who appoint them on.

The Opposition challenged the Speaker’s ruling through a motion that was soundly defeated yesterday, with all Labour MPs voting against it. Previous no confidence motions against the entire government and against minister Konrad Mizzi - who also owns an offshore Panama company - also failed.

PN deputy leader Beppe Fenech Adami kicked off the debate by insisting that everyone in the country believes that Schembri’s position has become untenable.

“He is the strongest person inside Castille, stronger than the Prime Minister himself, and has become an albatross around the Prime Minister’s neck,” he said. “The Panama Papers scandal is damaging the government, the Labour Party, the entire country’s reputation, and the financial services industry.

“Muscat knows all of this, but he cannot do anything because he has become hostage of Schembri and Mizzi. “Mizzi and Schembri have warned Muscat that if they go down, then they’ll drag him down with them”.

Describing the Panama Papers as the “greatest corruption scandal in the history of mankind”, he noted that Mizzi and Schembri had kickstarted the process to open their offshore companies a mere five days after the 2013 election.

“What treachery to all those thousands of people who voted for Labour, to all those supporters who had waited 25 long years for their beloved party to win an election,” he said.

He noted that Panama has been described by Transparency International as “the filthiest country in which to invest,” used by dictators, money launderers, and drug barons.

“The fact that he opened a company in Panama should have been reason enough for Parliament to have voted for the removal of Mizzi and Schembri,” he said.

He accused Schembri of treating the public as imbeciles, and of lying to justify why he opened his offshore Panama company.

He recounted how Muscat had denied that appointing Schembri as chief of staff could lead to conflict of interest, by arguing that he had resigned his directorship of his Kasco company. However, he remained a shareholder.

He urged the government to illuminate the public as to the identity of the owner of the third offshore company that Nexia BT had set up.

“When all you hear is perfect silence, then doubts obviously arise.” 

He recounted how Mizzi and Schembri had tried to open bank accounts for their companies – telling different banks that they wanted to deposit money earned  through brokerage, consultancy fees, igaming and waste recycling businesses.

He added that Mizzi had declared €6.4 million in personal revenue, which he said is equivalent to 2% of the price through which Shanghai Electric partially purchased Enemalta.

He noted that Nexia BT had also opened an offshore company for Cheng Chen, who was part of the negotiating team over the Enemalta deal.

'PN capriciously using Farrugia as a tool' - Cardona

Economy minister Chris Cardona accused the Opposition of “capriciously” using Parliament and Marlene Farrugia.

“It’s a shame that she has become a tool in the Opposition’s hands,” he said, to laughs from the independent MP.

He accused Fenech Adami of irony, challenging him to conduct himself to a tax audit and suggesting that he is the true leader of the Nationalist Party.

Following off-the-mike comments, he mockingly told Busuttil to “be quiet, because I didn’t interrupt your leader”.

He rubbished Farrugia’s call for an ad hoc committee to investigate Schembri, questioning who Busuttil will nominate on it, and reeling off controversies pertaining several Opposition MPs.

“Perhaps he can sit on it himself and illuminate the public on the €1 million in consultancy fees he had received from previous administrations or the €5 million settlement to Shell,” he said.

Cardona insisted that the public doesn’t want to censure the Prime Minister, as they are convinced that he is changing the country for the better.

“The public knows that the economy didn’t grow by chance, but because of the Prime Minister’s clear and unequivocal policies, that take into account the exigencies of both business and workers. Everybody except the Opposition is celebrating this success, and I am convinced that we will leave this debate stronger and more filled with determination than ever.”

Labour MP Anthony Agius Decelis didn’t mention the Panama Papers case, but rather sang Muscat’s praises, hailing him as a promoter of social justice, who has turned Malta into a world leader on civil rights.

“Muscat doesn’t believe in division and violence, as we can do more as a united nation than as a divided one,” he said.

Opposition MP Kristy Debono warned that the Panama Papers scandal has dealt a blow to Malta’s reputation as a financial services destination.

“Unlike in political campaigns, mud in the financial sector truly sticks and time will not heal that easily,” she said. “Financial stakeholders are scared that Muscat’s nonchalance risks pushing Malta’s reputation as a safe jurisdiction to a point of no return.”

Debono claimed that the Panama Papers case will harm Malta’s bargaining power in negotiations with the EU aimed at combatting attempts at tax harmonization.

She also warned that government is “playing a dangerous game” by implicating financial service providers who assist their clients to set up offshore companies so as to score political points.

'Floating voters sick of PN repeating Panama case ad nauseum' - Labour MP Etienne Grech

Labour MP Etienne Grech said that “certain newspapers” are conducting character assassination campaigns against Mizzi and Schembri, because libel charges are too low.

“It is affordable to them to throw mud, and while I am all in favour of freedom of expression, I am against mudslinging,” he said.

Grech claimed that floating voters are sick of the Opposition’s refusal to let the Panama Papers story go.

“I’s a tragedy that the Opposition is now throwing mud instead of focusing on the positives that improve the quality of life of Maltese citizens,” he said. “While it may please the PN’s hardcore, the strategy of repeating ‘Panama this and Panama that’ ad nauseum has frustrated floaters and switchers.”

Parliamentary secretary for EU funds Ian Borg accused the Opposition of trying to get the public to foot the bill for the PN’s debt.

“When I asked [PN executive president] Ann Fenech whether the PN has accumulated €20 million in debt, she arrogantly told me that it is none of my business,” he said. “They now want the public to make good on their debts, through their corrupt Cedoli scheme and by trying to get the state to finance parties.” 

He avoids discussing the Panama Papers scandal, instead choosing to speak about his own portfolio.

'Government has lost all touch with reality' - PN MP Mifsud Bonnici

Opposition MP Paula Mifsud Bonnici claimed that the wheels of government have stopped turning, as it is using up all of its energy to firefight the Panama Papers scandal.

“If Muscat had taken action against Schembri and Mizzi, then we wouldn’t be discussing this motion, but rather ways on how wealth can be distributed more justly to the poor, elderly and vulnerable,” she said.

Citing a recent Caritas study on poor households, Mifsud Bonnici accused the government of having “lost its social conscience” and of being “completely cut off from the reality of people living in poverty”.

“The Labour Opposition was presumptuous enough to pledge to eradicate poverty, but this study shows black on white that families are still suffering while living in poverty.

“How unjust it is that Mizzi and Schembri open secret companies in Panama, while people’s lives have stagnated thanks to salaries that are stuck at low level, low pensions and high fuel prices,” she said.

Competitiveness minister Manuel Mallia warned that Farrugia’s proposed ad hoc committee cannot be expected to be impartial, as the Opposition will enjoy the majority.

“A committee can only deliver a fair hearing if its members aren’t prejudiced over the subject, as prejudice is the enemy of justice,” he said. “How can Opposition MPs be unprejudiced when they have already expressed themselves on the subject? The Opposition wants Keith Schembri’s head on a plate, and they now want to lead an investigation into him.”

He accused the Opposition and Farrugia of “wasting Parliament’s precious time”, arguing that the House has already green-lighted the Prime Minister’s decision to retain Mizzi and Schembri through a no confidence motion in the government.

“Even though they know that they cannot reverse the Prime Minister’s decision, they are still trying to find ways to oppose it,” he said. “God forbid lawyers were to adopt this attitude in court – repeatedly presenting cases that have already been lost.”

He said that people of “various political colours” have told him that “the point has been made” and that the people have grown frustrated hearing about “the Panama Leaks, Swiss Leaks and similar leaks”.

“They are tired of hearing arguments by people who want to oppose everything, who are returning to the old style of demonstrating in the streets, of giving interviews in Italy so as to harm the country, and of blogs harassing people on a personal level,” he said. “They want Malta’s political climate to be a tranquil one, and for the economy to continue to grow, and their lives to continue improving.”

'Let's not risk giving birth to anti-political movements' - Bartolo

Education minister Evarist Bartolo urged fellow MPs not to allow the public to lose faith in the political class, warning that it could pave the way for the birth of anti-political movements, such as those that rose up in Spain, Austria, France, Hungary, Germany, and Poland.

“This doesn’t mean that I think we should create a mafia between ourselves and conceal each others’ shortcomings,” he said, before recounting how he had once been invited to a dinner in which high-ranking people were present.

“There were politicians, lawyers, judges, developers all gathered around a table, and I learnt an important lesson that day, that the most important decisions aren’t made here in Parliament but behind closed doors at social gatherings.”

He expressed his pleasure that Malta has committed itself to setting up a public registry for beneficial owners of companies registered in he country, that authorities will have full access to.

He added that Malta will commit itself to open contracting data standards, and that the government will publish all major public contracts before the end of the year while taking into account commercial sensitivity.

“I hope that the local debate about the Panama Papers expands beyond whether to give Schembri or Mizzi the red card,” he said.

He also reiterated his call for the resignation of MFSA chairman Joe Bannister, arguing that 20 years is far too long a time to spend as head of a regulatory authority.

“Chairpersons of regulatory authorities should have a maximum of two five-year terms in the role, or the risk is that public authorities start resembling private companies,” he said. “If government wants to maintain Bannister’s expertise, then it can maintain him as an advisor.”

He ended his speech with a call on media outlets to keep themselves to standards of accountability.

“Just as they don’t want other people to be considered untouchable, then they too shouldn’t believe they enjoy immunity,” he said.

Opposition MP Chris Said argued that Panamanian law firm Mossack Fonseca – through Nexia BT managing partner Brian Tonna - indirectly had an office in Castille.

“Mossack Fonseca is renowned as a corrupt company, and was flagged as so in a report by the UN and the World Bank. A quick Google search will reveal how corrupt politicians and international criminals use Mossack Fonseca’s services.”

He noted that police in Brazil and El Salvador raided Mossack Fonseca’s offices following the Panama Leaks.

“In Malta, the police were busy testing Simon Busuttil’s car for possible fuel abuses,” he quipped.

He said that “genuine Labourites” realize that Muscat’s recent reshuffle was a gimmick, that only served to confirm his complicity in the whole affair.

Civil liberties minister Helena Dalli didn’t refer to Keith Schembri or the Panama Papers case in her speech. Instead, she focused on the Labour government’s pro-LGBT legislation, drawing parallels with how former PM Lawrence Gonzi had forced transgender Joanne Cassar to pass through “martyrdom” over her wish to marry her boyfriend.

Following complaints by PN MP Marthese Portelli that such comments were irrelevant to the debate, Dalli retorted that it was relevant as the Opposition are seeking to censure the same Prime Minister who allowed Cassar to marry her boyfriend.

‘PN painting a false picture of Keith Schembri’ - Deborah Schembri

Parliamentary secretary for planning Deborah Schembri accused the Opposition of painting a false image of Keith Schembri.

“Its claims that ministers require his go-ahead before doing anything or that he has threatened the Prime Minister to take him down if he gives him the sack is totally false,” she said. “The Keith Schembri I know is a person whose door is always open to ministers and parliamentary secretaries whenever they need help, a man who is completely loyal to his country and Prime Minister.

“It’s a sign that the Opposition is desperate, but this strategy is only alienating more people.”

Labour MP Silvio Schembri lashed out at a “clique” of people within the Nationalist Party, including Busuttil himself who he described as a child who stamps his feet whenever things don’t go his way.

“They include people like [blogger] Daphne Caruana Galizia, who spends her life attacking people close to Labour, [lawyer] Andrew Borg Cardona who called Ira Losco a bitch because she competed in the Eurovision while Labour was in government, and [PN deputy leader] Beppe Fenech Adami who called journalists pathetic.”

Foreign affairs minister George Vella brushed off claims that the Panama Papers case has damaged the country’s reputation, arguing that other foreign ministers have never aired their concerns to him.

“They praised Malta for the Valletta summit and the CHOGM and augur us success in the EU presidency,” he said.

Challenging the Opposition to provide proof of corruption in the Panama Papers case, he said that they would have had nothing to criticise had the case not erupted.