Keith Schembri turns down PANA committee invite: ‘I’m not an elected official’

OPM chief of staff Keith Schembri will not be appearing before the PANA committee, currently in Malta investigating tax avoidance and money laundering in the EU following the Panama Papers revelations.

Schembri published a copy of consolidated accounts of his trust, Haast Trust. The audit was carried out by independent audit firm Crowe Horwath, with offices in Canada, Cayman Islands, United States, India, France and the United Kingdom.

In his letter to the committee, Schembri also suggested that the committee investigates Daphne Caruana Galizia for "alleged tax-based indiscretions".

“Following the conclusion of the audit process, instructions have been given for the company in question to be wound up. The winding up process shall be concluded shortly,” Schembri said in a public statement.

“It is amply evident from same audits that all the accusations that have been levelled against me have once again been proven baseless and ill-intentioned.

“After giving due consideration I have determined not to attend before the PANA Committee.”

Haast Turst • Financial statements and audit opinion

Letter to PANA committee

In his letter to committee chair Werner Langen, Schembri said that he was not an elected official, and that he holds a position of trust in service of the government: “And shall so serve while I enjoy such confidence.”

Schembri goes on to question the legality of the committee’s mandate to carry out its inquiry – the Legal Service to the Council of the European Union had released an opinion questioning whether the committee had sound legal standing to carry out its inquiry.

He goes on to argue that the committee’s terms of reference focus on the adoption and implementation of anti-money laundering and taxation Union law: “I fail to identify the reason for the personalization of the Committee’s work.”

Schembri argued that the committee had adopted a different approach in its visit to the United Kingdom last week: “Such attitude seems to be driven by reasons extraneous to the scope of inquiry and therefore I feel that my attendance would set a dangerous precedent.”

The letter to Langen goes on to state that the International Consortium for Investigative Journalists – who handled the trove of more than 11.5 million leaked files from Mossack Fonseca - did not feel it relevant to the scope of its investigative journalistic work to mention Schembri in the release of its data.

“I find it most peculiar that the Committee would champion the cause of a person driven solely by hate, to the extent of wishing my early demise and who should be herself subject to scrutiny by this Committee for alleged tax-based indiscretions,” Schembri wrote.

Caruana Galizia is contesting a Tax Compliance Unit that claims she has undeclared sales of over €560,000 since 2004 on which she has yet to pay 18% VAT.

“Surely this is not the kind of public discourse that is required to maintain a healthy democracy. Europe today suffers the effects that the legitimization of such politics brings about.

“This same vitriol has been espoused by the leader of the Opposition who, for lack of a genuine platform, has resorted to jumping on the bandwagon at every opportunity, spinning and manufacturing lies with regards to any and every exponent of the Labour movement in Malta.

“In light of this, I feel my attendance would be used by people so intentioned to cause harm and disrepute to my country which, for all its limitations, is a true and confident member of the Union.”

Haast Trust

Tillgate Inc is Schembri’s Panamanian trading company, which was activated in June 2015. Mossack Fonseca in New Zealand set up the Haast Trust, with the ownership of Tillgate transferred to the trust. Schembri said Tillgate will be dissolved.

The trust was registered with the New Zealand Tax Department on November 2015.

In its report, Crowe Horwath’s notes that trusts in New Zealand are not required to have an audit. However, the settlor has requested the trustees to prepare the special purpose financial statements.

The consolidated financial statements run from July 2015 to June 2016 and Crowe Horwath confirmed that no trading activities were undertaken and Tillgate Inc held no bank accounts.

During the Panama Papers revelations it emerged that Nexia BT was in the process of opening a bank account in Dubai, whilst FPB Bank in Panama had refused to open an account.

PN dubs Keith Schembri ‘Malta’s real Prime Minister'

In its initial reaction, the Nationalist Party said Schembri’s refusal to appear before the committee confirmed how “weak” the Prime Minister was.

“Who is Malta’s true Prime Minister?” the PN said, adding that Schembri was found to have secret companies in Panama, Cyprus, Gibraltar and the Virgin Islands.

“We today confirm that Malta’s real Prime Minister is Keith Schembri, and not Joseph Muscat,” it said, insisting that Muscat should have forced Schembri to appear before the committee.