Panama, revisited

For those who dislike conspiratorial theories on the malaise affecting Muscat’s administration – despite it being buoyed by economic success and far-reaching reform – there is one major root of grave concern that is universally acknowledged.

And that is the lack of a criminal investigation into the Panama Papers.

This, in itself, is at the heart of the consternation at the Labour administration that we have seen spilling out on the streets. People’s anger is justified, no matter how much others would like to see it discredited because it originates from Nationalist-friendly quarters and apologists.

In 2016, like all other tax scandals before it, Panama Papers was a matter of national outrage that warranted the resignation of energy minister Konrad Mizzi and the PM’s chief-of-staff Keith Schembri. They were retained for political reasons, but even more seriously, the police refused or were unwilling to investigate.

Several mishaps have occurred since then, much about which we learnt only this year when various leaks took place.

Perhaps unconnected to the Panama Papers, the FIAU’s compliance visit at Pilatus Bank resulted in a letter from then FIAU director Manfred Galdes to Commissioner of Police Michael Cassar to investigate an allegation of money laundering. Cassar resigned two weeks later, ostensibly unwilling to take on this onerous investigation that could touch the government. Few people often ask why such a veteran police official had balked at the straight-forward challenge.

Panama raged on in the Maltese political sphere, with Opposition leader Simon Busuttil calling on the police to investigate the case. In a country shorn of checks and balances, the PN knew only too well the kind of political stranglehold the Labour executive held on the police. A criminal complaint could have kick-started a police investigation. Even if ignored, a police challenge in the courts could have forced the Commissioner of Police to start an investigation.

The police did not investigate. The courts were not petitioned to force an investigation. Only after the snap election in June, battered in what was an unprecedented electoral outcome, did the outgoing PN leader file a request for the investigation of the Panama Papers with an inquiring magistrate.

We can blame such political ‘filibustering’ on the bi-partisan consensus out there: always capitalise on the failings of your enemy, even if it means short-changing your country in the process.

But at the end of the day, the buck stops with Labour. It is on their watch that the Maltese police did not investigate Panama Papers, and it is Muscat who did not sack those allies found with offshore companies.

That lack of investigation provoked a nightmarish sequence of events. Suffice it to say that the mystery of the ownership of Egrant, whether or not someone finds the allegation of Muscat’s ownership spurious – was itself hamstrung by the inexistence of the Panama investigation in the first place.

For how could a police commissioner who in the first place was not pursuing a criminal investigation related to tax avoidance or money laundering on the Panama Papers – for PEPs and non-PEPs alike – be expected to take note of the Egrant allegation, call the journalist in question for information, secure the Pilatus premises and inspect the alleged evidence on site?

Yes, Muscat did force the investigation with a complaint to the police. But the police force came out the loser in the process.

It is in this context that MEPs like the German member Sven Giegold, who hails from a region where tax authorities actually acquired data for the Swissleaks and Panama Papers to prosecute tax avoiders, questioned the unwillingness of Maltese police to carry out the necessary investigations.

Many people in Malta do not share the impression that the country suffers from a crisis of rule of law.

Many probably dislike the glibness of activists and politicians who report “mob rule” where there is none; many know that the political influence on the selection of the judiciary existed well before 2013 (indeed the reformed system today allows for a fairer selection of competent individuals); and many would like to see a fair appraisal and reform of Malta’s system of checks and balances, and a true and sweeping reform and professionalisation of our police corps.

But before that, a police investigation on Panama Papers in Malta is necessary.

Giegold remarked that the police and Attorney General demonstrated “an unwillingness to investigate and failed to prosecute corruption and money laundering”, despite the subsequent press reports and FIAU leaks. The Maltese can assess for themselves the state of rule of law in Malta.

But surely enough, they do not need a German MEP to explain to them that at the heart of Malta’s crisis of governance, is the lack of investigation on Panama. On this, there should be no confusion.