‘Facebook post was aimed at explaining how money laundering works,’ Matthew Caruana Galizia tells court

Matthew Caruana Galizia takes witness stand in libel proceedings filed by former Prime Minister Joseph Muscat against his mother

Son of assassinated journalist, Matthew Caruana Galizia, has continuously criticised the Prime Minister for not dropping libel proceedings against his mother
Son of assassinated journalist, Matthew Caruana Galizia, has continuously criticised the Prime Minister for not dropping libel proceedings against his mother

Matthew Caruana Galizia has explained that a social media post he published had been aimed at explaining the practical aspects of money laundering and related investigations, as well as the role played by offshore companies and the risks associated with opaque corporate structures.

Caruana Galizia took the witness stand in libel proceedings that had been filed by former prime minister Joseph Muscat against his mother, Daphne Caruana Galizia. Muscat had sued for libel over a story Daphne Caruana Galizia had published just months before her murder, in which the slain journalist had alleged that Egrant, a company set up in the secretive jurisdiction of Panama, belonged to Muscat’s wife, Michelle.

Caruana Galizia’s story had largely been based on information provided by Maria Efimova, a former Pilatus Bank official.

An inquiry conducted by then magistrate Aaron Bugeja had subsequently concluded that the inquiry had seen no evidence that Egrant was owned by Michelle Muscat and had ordered that Efimova be charged with calumny. 

Muscat had also filed separate libel cases against one of Daphne Caruana Galizia’s sons, Matthew, over a Facebook post, as well as against Karl Gouder and Mario Frendo, former NET TV editor and journalist respectively, over news reports concerning the Egrant saga.

Taking the witness stand on Monday afternoon, Caruana Galizia explained that his Facebook post dealt with a hypothetical case and had been intended to offer an explanation on money laundering investigations and how money laundering works in practice. The post had also sought to shine a light onto the workings of opaque offshore company structures and to highlight the risks of having politicians involved in high-risk sectors.

“Without transparency, we stand a great risk of having politicians being involved in organised crime and corruption,” Caruana Galizia told the court this afternoon.

An inquiry with a very limited scope

Presiding magistrate Victor Axiak asked the witness whether he had discussed the Egrant magisterial inquiry with his mother.

“A journalistic investigation is extremely different from one conducted by a magistrate,” Caruana Galizia replied, pointing out that a magistrate has far greater resources at their disposal in comparison to those available to journalists. “They can also order evidence to be seized while journalists must depend on their sources and what they are able to get out of conversations.”

Answering the magistrate’s question, Caruana Galizia pointed out that the scope of the Egrant inquiry had been “extremely narrow” and that he had discussed this with his mother.

The Egrant inquiry had been requested after Muscat filed a formal complaint through lawyers Pawlu Lia and Edward Gatt.

The terms of reference of the inquiry limited it to investigating only two things: whether there was any evidence that the shares in Egrant, a Panamanian company established in 2013 through the services of Mossack Fonseca and Nexia BT, were owned by Michelle Muscat or were otherwise attributable to her or her husband the former Prime Minister Joseph Muscat; and secondly whether there was any evidence that the Prime Minister and wife, Keith Schembri, Konrad Mizzi or John Dalli had engaged in any illicit dealings through bank accounts at Pilatus Bank with Politically Exposed Persons (PEPs) from Azerbaijan.

On this point, Caruana Galizia pointed to the terms of reference, explaining that in the field of investigative journalism, journalists would not focus solely on one single offshore company, but would look at the wider network of offshore companies and associated bank accounts.

Making reference to information available in the public domain, Caruana Galizia said that Pilatus Bank “had a lot of unusual activity and there was a high probability of illegalities going on. The bank has been described to me as a laundromat.”

“When people are trying to launder money or obscure its origins, they tend to use more than one company, bank or frontman. Investigating such a network requires a huge effort. A single judicial investigator or police would struggle with such an investigation, let alone a single journalist.”

Magistrate Victor Axiak referred to Caruana Galizia’s Facebook post, and asked whether it was a generic example or specific facts concerning Muscat, disgraced former minister Konrad Mizzi and former OPM chief of staff Keith Schembri.

“In any investigation you do not pull things out of thin air,” Caruana Galizia said, telling the court that the corporate structure that had been set up by officials, accountants and lawyers was likely intended to obscure the origin of funds.

“Brian Tonna had a company in Malta that was acting for the sale of passports and visas, and a company in the British Virgin Islands billing the Maltese company for services. Essentially, Brian Tonna billing Brian Tonna. Why would he do this?” the journalist asked.

Caruana Galizia added that it would have been (and remains) impossible to obtain any information from the authorities in the British Virgin Islands, highlighting the fact that Maltese tax authorities had only got to know about these offshore structures as a result of the Panama Papers leak.

Caruana Galizia also told the court that he would usually get to know about his mother’s investigations after she would have published it.

“Her sources, especially during her last years of life, were high level officials who would contact her,” he said.

“I didn’t have any interaction with sources or evidence. What I would know is from what I observe and sometimes I would assist her in minor work.”

“Her sense of ethics was very strong. She would not publish anything without solid evidence. She had a strong sense of ethics,” Caruana Galizia said, and added that what he learnt about journalism was from her.

The first time that Daphne Caruana Galizia had asked him a direct question about Macbridge and 17 Black had been in 2016, he said.

Replying to a question from the lawyers, Matthew Caruana Galizia told the court that it was “almost impossible” for him to defend his mother’s case, “unless I am in church and a box of evidence falls from heaven.”

He added that as a defendant, he was suffering prejudice because he did and could not know what his mother knew, saw and what went on in her mind.

The case was adjourned to 19 June at noon.

Lawyer Pawlu Lia assisted Muscat.

Lawyers Peter Caruana Galizia and Joe Zammit Maempel assisted the respondents.