[WATCH] PM sees no conflict if chief of staff’s company benefits from Crane banknote investment

PM sees no conflict if chief of staff’s company benefits from Crane investment • Video by Chris Mangion

Prime Minister Joseph Muscat has made a stunning declaration to the press, saying he would have no objection if his chief of staff Keith Schembri’s business group, bids for the supply of printing machinery for Crane Currency.

Schembri, the owner of business group Kasco, was said to have been instrumental in securing a €100 million investment from Boston banknote printers Crane Currency, to open a factory in Malta that will create some 300 jobs.

Muscat personally thanked Schembri during a press conference unveiling the investment on 21 September, a coup for his government after the scaling-down of the De La Rue operation in Malta.

“No I don’t have a clue,” Muscat said when asked whether Schembri’s company would be bidding for the supply of printing machinery to Crane Currency. Kasco Technical, a company owned by Keith Schembri, is an official distributor for Komori, one of the leading suppliers of banknote printing machines.

A spokesperson for the Kasco Group has since told MaltaToday that the company had no plans of becoming a supplier to Crane Currency.

“Why shouldn’t he?” Muscat added, when pressed on the conflict of interest Schembri would have, having played a part in facilitating the Crane Currency investment.

“If it’s a private company and wins a bid, why should it be disqualified,” he asked, referring to the Kasco Group.

“I totally disagree… had it been Schembri’s company taking over government business [would be an issue]... but if you expect a private sector company being disqualified… I think this is just an obsession people have with Schembri.

“I thanked him for his role in facilitating the investment. The negotiations and conditions were carried out between Malta Enterprise and Crane Currency. What Schembri did was to make sure things got done.”

Schembri’s Kasco Group is one of the island’s main paper merchant companies, having supplied Allied Newspapers with its state-of-the-art printing press for its company Progress Press.

Keith Schembri resigned his company directorships upon being appointed chief of staff in March 2013.

Schembri was implicated in the Panama Papers, the leak of secret documents from Panamanian law firm Mossack Fonseca, as having opened offshore firms in Panama in 2013, and before that offshore firms in the British Virgin Islands in 2010.

In a statement, the Nationalist Party called on the prime minister to clearly explain what role Schembri played in the negotiations with Crane Currency.

The Opposition said Schembri had a clear conflict of interest in this case and that the public deserved to know whether the chief of staff’s private business ventures would make any money – directly or indirectly – from Crane Currency coming to Malta.

The PN said it had been calling for Schembri’s dismissal for a long time, not only for the secret companies he set up in Panama after being appointed chief of staff, but also because of the large conflicts of interest between his role at the OPM and his private business.

In response, the Office of the Prime Minister (OPM) said that “the latest bitter political attack on a $100 million American investment which will create 300 productive, quality jobs, is nothing but another desperate attempt to foil quality jobs from coming to Malta”.

The OPM said that Crane Currency works with some 60 governments including the US Government, and chooses its own suppliers according to its commercial needs.

“Since equipment related to currency requires strict security features, Crane Currency purchases its equipment directly from the supplier and does not need agents.”

It said the Government was not aware of commercial decisions which are, or will be taken, by the company now or in the future.

“This government will remain steadfast in providing investors and entrepreneurs the right environment to invest in our countries and keep providing better jobs for the Maltese and Gozitans,” it said.