17 Black | Konrad Mizzi and Keith Schembri must go

Mizzi and Schembri have both admitted to owning the Panama companies, but denied ever receiving any cash payments, or that there was any connection with the multi-million tender awarded to Electrogas for a new, gas-fired power station in Delimara.

Even without the latest revelations, there was already more than enough grounds to both remove those two officials from their positions, and also to investigate the matter as a potential case of corruption. But while inquiries were initiated – some of which are still underway – the truth is that neither of those things really happened. Perhaps buoyed by his own extraordinary popularity ratings, Muscat evidently felt he could weather the storm long enough for this episode to eventually be forgotten.

There were, however, some factors that Muscat did not include in his calculations. He evidently underestimated the extent of the international interest in this case, at both media and political levels: possibly under the impression that his own unassailability at the polls would be enough to legitimize his decision to retain those two officials in the eyes of the rest of the world.

Secondly, his standard formulaic response – ‘I will await the outcome of ongoing inquiries’ – did not take into consideration the widespread international scepticism (justified or otherwise) in Malta’s investigative institutions.

It was a classic case of judging the international political context by the local yardstick. Muscat resorted to the same time-honoured tactics that have hitherto always worked well in the local context. Uncharacteristically (for such an otherwise astute politician) he seemed oblivious to the fact that those dynamics only hold good for Malta – conditioned, as it undeniably is, by blind partisan loyalty – but cannot be expected to absolve his government of suspicion in the eyes of Europe.

Muscat must surely be aware of how unorthodox his dealings with this matter must have appeared (and still appear today) to European politicians, including his own allies in the European Parliament, but also a good deal of Maltese voters.

Perhaps his biggest blunder, however, was that his own consistent defence and protection of Mizzi and Schembri would eventually extend the web of suspicion to himself. Even if the Egrant allegations have been revealed to be false, it was inevitable that people would assume Muscat’s involvement in what increasingly looks like a complex web of (intended) graft.

Now, the latest revelations have added vital pieces to the jigsaw puzzle. Media reports have named the owner of 17 Black – previously named as a target client for the two Panama companies set up by Nexia BT for Mizzi and Schembri shortly after the 2013 election – as Yorgen Fenech, CEO of the Tumas Group: one of the shareholders in Electrogas, alongside Azeri energy company Socar and Siemens.

Schembri himself had earlier confirmed that 17 Black and Macbridge, two Dubai-based companies, were listed as target clients in business plans drawn up for his Panama company Tillgate, when the news was broken by the Daphne Project earlier this year.

An excerpt from a leaked FIAU report meanwhile revealed that 17 Black had received at least two payments at its bank account in the United Arab Emirates.

One of the payments was a $1.4 million transfer from a Latvian bank through a Seychelles-based company called Mayor-Trans, belonging to an Azeri national.

The other payment to 17 Black was for $200,000 from Mario Pullicino of Orion Engineering Group, which is the local agent for the LNG tanker fuelling the power station.

At this stage, it becomes an academic point whether Mizzi and Schembri ever succeeded in opening bank accounts for either Hearnsville or Tillgate. There is ample evidence that they tried to do so, and failed; and it could be argued that the premature announcement of the impending Panama Papers story – revealed on Daphne’s blog in February 2016, two months before the news officially broke – gave them both time to discontinue their efforts.

What the latest information strongly suggests, however, is that the operation was indeed planned, if never properly actuated. This may make a significant difference in the event of any criminal prosecution in connection with this case; but from a political perspective – and all along, the decision to retain Mizzi and Schembri was political in nature– it makes little difference at all.

Konrad Mizzi and Keith Schembri’s positions are clearly untenable; partly because there is now evidence that they at least intended to commit corrupt acts, and partly also because of their own, consistent denial of facts which are now openly visible. They must be investigated.

Prime Minister Muscat would be lucky enough to avoid further implication for himself at this late stage; but that, too, may become impossible… unless he does what he should have done two years ago, and sack Mizzi and Schembri.