What happened to the Panama Papers investigation?

There is more than just a political dimension to the Panama Papers; and international interest is by no means limited to the European Union.

13 September 2016, 8:51am
Cartoon by Mikiel Galea
Cartoon by Mikiel Galea
As Leo Brincat’s hearing before the European Parliament made clear this week, the Panama Papers issue may have fizzled out locally… but overseas, the real issue has arguably only just begun.

Brincat found himself under pressure by the EP’s public accounts committee to defend his support for disgraced minister Konrad Mizzi. This is understandable, as the job for which Brincat was being considered (and which he got) places him on the opposite side of the fence. From part of a government deeply implicated in the scandal, he is now part of a European legislative and bureaucratic infrastructure that was designed to ward against precisely such behaviour.

Naturally, Brincat himself is not implicated, and as such cannot be held accountable for the actions of another minister. All the same, he told MEPs that he had deep personal reservations about the prime minister’s decision to retain Mizzi in the Cabinet, and that he even considered resigning as a result.

Much has been written about the wider implications of Brincat’s remarks… but even if he did resign, the fact remains that he would clearly have been the wrong person to do so. This in turn points towards the longer term implications for Malta, on account on a scandal that has been left unresolved.

Leo Brincat may have satisfied the European Parliament with regard to his own suitability for the post of member of the European Court of Auditors. But this doesn’t change the fact that nobody, to date, has suffered any form of consequence over their involvement in the scandal. Everything now suggests that the scandal will simply drop off the political radar… as tends to happen when an issue is over-publicised.

But there is more than just a political dimension to the Panama Papers; and international interest is by no means limited to the European Union.

Konrad Mizzi to date remains the only serving European minister named in the Panama Papers: yet he is but one of thousands of individuals whose name appeared on that list. Mizzi himself (and also Keith Schembri, the OPM’s chief of staff) have so far escaped censure, but an independent investigation by the Financial Intelligence Analysis Unit (FIAU) is theoretically still ongoing… not just with regard to the aforementioned, but also into all the names and business interests featured in the leaked data.

Strangely, however, we have heard nothing whatsoever about the current state of this investigation since it was launched several months ago. This week, the Finance Minister frankly admitted that it was “not within his remit” to know whether the FIAU has concluded its investigation. He added that any such investigations would fall under the Commissioner for Inland Revenue’s remit… which, as minister, he was not privy to.

“In the end, it would be up to the Commissioner to decide whether it was in the public interest to give any updates on investigations”, Prof. Scicluna said.

From a legal/procedural point of view, Scicluna may well be right. But this is hardly reassuring, given (among other things) that the head of the FIAU resigned his post abruptly in the course of the investigation… and that to date, there is no real evidence that the investigation is even ongoing.

Compared to the seriousness with which other countries are conducting their own investigations, the apparent culture of silence that reigns in Malta is almost alarming. If Scicluna is correct, the law grants far too much discretion to the Commissioner for Inland Revenue. It should not be up to the whims of a single individual to decide ‘what is in the national interest’… especially on a topic where the national interest is already manifest and self-evident.

So far we have seen the political dimension given considerable prominence in an EP hearing:  attesting to the seriousness with which this matter is viewed within European institutions. As the wider international network of investigations proceeds, however, it will only become apparent that the broader non-political implications have likewise been minimised locally.

To appreciate the laxity with which local financial and judicial institutions have taken the issue, one need only compare Malta’s situation with that of distant Australia: where the tax authorities are in the process of concluding their own investigations… resulting in several arrests and prosecutions on charges of tax evasion and money laundering.

On Tuesday, Australia’s Financial Services Minister Kelly O’Dwyer announced that the “Serious Financial Crime Taskforce” had executed search warrants and unannounced visits across about 15 properties in Victoria and Queensland, for allegedly serious offences arising from the same cache of leaked financial data.

Unlike the local scenario, which is characterised by a dearth of information, the Australian media are kept constantly updated by Tax Commissioner Chris Jordan – the equivalent of Malta’s commissioner for inland revenue.

“Having commenced the assessment of the [Panama Papers] data, we believe that some of these structures and trusts are being used to evade tax, avoid corporate responsibility, disguise and hide unexplained wealth, facilitate criminal activity and launder the proceeds of crime,” he recently said.

Compare this to the way the same matter was handled locally, and the difference becomes too conspicuous to ignore. Malta cannot expect to get away with sweeping this issue under the carpet forever.