Americans told Scicluna of concerns about Russian cash in Satabank

American intelligence could have been well aware of financial transactions possibly used by criminal rings before Satabank closed shop

Edward Scicluna and Marshall Billingslea
Edward Scicluna and Marshall Billingslea

Staff at the finance ministry believe American intelligence could have already been aware of suspicious financial transactions inside the now-shuttered bank Satabank, widely believed to have been used by criminal rings to receive millions in cash transfers.

Sources who spoke to MaltaToday insist that staff at Edward Scicluna’s ministry emerged from a meeting with Marshall Billingslea – the United States’ Department of Treasury’s assistant secretary for terrorist financing – “convinced” that the US had prior information of the bank being used by elements of the Russian government for covert payments.

“Without being prompted, Billingslea made special mention of Darren and Gordon Debono, as well as of lawyer Arthur Azzopardi, making clear the Americans’ interest in the case of the fuel smugglers,” the source said.

“All this was being said in the context of a discussion on Satabank, but also the potential use of the bank by Russia to transfer funds to accounts in the bank.

“Remarkably, Billingslea appeared to be privy to sensitive banking transactions at the bank,” the source said, referring to a period where the bank had already been taken under controllership and each transaction and deposit at the bank was being analysed by the independent audit firm EY.

At the meeting, the US assistant secretary was also said to have expressed American concern over Russia’s role in the financing of Maltese operations involved in fuel smuggling, especially over possible indications that the fuel was being sold for an eventual destination to blacklisted Syrian forces, or to Khalifa Haftar’s army.

“Fuel smuggling was at the top of Billingslea’s concerns. He even indicated that he would be visiting Hurd’s bank,” the source said, referring to the shallow offshore bank located to the east of Malta.

The area – a veritable Wild West for transshipment on the high seas – is said to be the site of significant transfers of oil products through an informal ship-to-ship network. According to Lloyds List, chemical or product tankers have been tracked undertaking ship-to-ship transfers in waters off Malta, before sailing on to Venezuela, the Latin American country whose government is also actively supported by the Russians.

Hurds Bank is outside territorial waters and not under the direct jurisdiction of Malta.

Yet it is believed that it was on this very pretext that Malta was ‘pushed’ to make its first ever representations to the United Nations Security Council, for sanctions against Darren Debono and Gordon Debono.

“There was active American encouragement for the sanctions,” the same source said, “because UNSC sanctions provide a solid basis for the boarding of ships – but Russian opposition to the sanctions have only highlighted the concerns about these informal shipping networks and the role they play in the smuggling trade in the Mediterranean.”

The Americans are lawfully allowed to board Malta-registered ships under the Proliferation Security Initiative bilateral treaty, if authorised by the Maltese authorities.

The only communication issued by the government following the Billingslea meeting with Scicluna in late June was a mere two sentences about talks between the two sides on combating terrorist financing and financial crime.

Sanctions designated against Darren and Gordon Debono (no relation to each other), who were arrested in September 2017 by Italian police and are now out on bail, were foiled by a last-minute suspension from the Russian government at the United Nations Security Council.

The Maltese government has argued that the two men had “consistently attempted to undermine the peace, stability, and security of Libya” with their involvement in the oil smuggling crime ring.

Both Debonos have filed court action to prevent Malta from designating sanctions against them.

Russia had blocked the Maltese sanctions with a last-minute veto on a Security Council designation. In August, Maltese foreign minister Carmelo Abela met his Russian counterpart Sergei Lavrov in Moscow. Russia has now sent Malta’s sanctions monitoring committee a series of questions requesting clarifications on Malta’s proposed sanctions against the Debonos.

“The Russian government is clearly aware of the role Debono has played in the Libyan smuggling operation – the name cropped up during the talks with Abela – which raises questions over where their interests lie,” a highly-placed government source, privy to the Abela meeting, told MaltaToday back in August.

Abela was also questioned as to why the Maltese government had only launched its sanctions bid a full year after the extent of the smuggling operation was revealed.

The oil smuggling suspects are accused of being at the centre of a €30 million fuel smuggling ring with Libya and Italian Mafia associates at its heart. The two men are already under a US sanctions list designated by the Office of Foreign Asset Control, a Treasury Department office.

Darren Debono has also revealed having held meetings with a naval attaché from the United States embassy in Malta, who asked him to offer up information on the smuggling trade in the Mediterranean, as a precondition to have the OFAC sanctions lifted.

In court, Debono’s lawyer also claimed the US embassy official requested information on Prime Minister Joseph Muscat and his chief of staff Keith Schembri, in connection with the provision of fuel to Russian ships. “Do you remember those two Russian ships that wanted to dock in Malta and that Malta didn’t allow to refuel? They told him to confirm whether the Prime Minister and the government took them outside territorial waters and whether he gave them fuel himself. They insisted on being given information and asked for information about the Prime Minister and Keith Schembri. He said, ‘no because he is my Prime Minister and I am not a spy’,” lawyer Victor Bugeja said.

Debono is currently fending off restrictive measures on his ships, as well as from Maltese banks, which have prevented him to access various savings accounts and pension funds due to the American sanctions.

In an affidavit to a Maltese court, Debono said a US naval attaché requested that he reveal influential drug trafficking syndicates, whom they sell their cargo to, how they paid their crews to transport drugs and other illicit cargo, as well as to identify businesses owned by such people like Paul Attard – a Maltese shipper wanted by Italian police for extradition to face charges of drug trafficking.

“I informed him that I had no information on what he was asking of me and I feel I am being used and blackmailed,” Debono wrote in his affidavit to the courts.

“These Americans have made my life hell, following me and sending out people to investigate me, but lately they have not been persistent because they are hoping that I will bring them the information they asked of me, which information I indeed do not have because I was not involved in the circles they are referring to,” Debono said.

Debono’s ADJ Trading, as well as his other companies and five fishing vessels, were hit by the OFAC blacklist in the wake of the arrests.

The American chargé d’affaires in Malta, Mark Schapiro, has been unequivocal about Russia’s objection to the Malta sanctions.

“These guys are known gangsters and known smugglers. What just happened at the United Nations is that Russia made a decision to side with known gangsters and smugglers against Malta. That’s not OK, that should not be acceptable and Malta has every right to be frustrated and disgusted by this,” he said on TVM.