Muscat insists he and Schembri ‘have no obligations towards each other’

Joseph Muscat insists any evidence to back up Egrant reports will be electronically recorded, but Simon Busuttil warns that evidence could have been 'smuggled' out of bank

Prime Minister Joseph Muscat insisted he has no obligations towards his chief of staff Keith Schembri (centre)
Prime Minister Joseph Muscat insisted he has no obligations towards his chief of staff Keith Schembri (centre)

Prime Minister Joseph Muscat insisted that he and his chief of staff Keith Schembri “have no obligations towards each other”, although the two are close friends and were both instrumental in securing Labour’s historic 2013 victory.

Interviewed on TVM’s Dissett, Muscat said Schembri will have to shoulder responsibility if an ongoing magisterial inquiry implicates him in taking kickbacks from Brian Tonna on the sale of Maltese passports, but shied away from pledging to resign himself if such a situation arises. 

When TVM head of news Reno Bugeja noted that he had stood by Schembri ever since the Panama Papers scandal broke last year, Muscat countered by saying that PN leader Simon Busuttil had similarly stood by his deputy Beppe Fenech Adami through the CapitalOne case

“My focus right now is purely on the upcoming election, and I will take the necessary decisions if the people entrust me to take them. Keith Schembri and I are friends, but we have no obligations towards each other.”

Nuscat reiterated that he will resign if the magisterial inquiry verifies reports that his wife owns the offshore Panama company Egrant, and challenged Busuttil to pledge to do the same if the inquiry fails to find any such evidence.

“If the allegations prove to be false, then Busuttil should resign from any office he is holding at the time – be it Prime Minister, Opposition leader, or MP – and deliver a public apology.”

He dismissed Busuttil’s warnings that Pilatus Bank could have discarded any evidence before the inquiry had started, arguing that any evidence will be available in a digital format. “We live in a world where bank transactions are carried out electronically and I don’t think it’s credible to say that the bank took out the evidence in a suitcase,” he said.

“For heavens’ sake, we don’t live in a 60s movie but in a digital world, and I’m convinced that the inquiry will prove that Busuttil has a weak character and that he tried to take advantage of a cowardly lie.”

In an earlier interview, Busuttil insisted that Muscat must resign if the inquiry reveals that Keith Schembri had taken kickbacks from the sale-of-citizenship scheme, allegations that he said are backed up by proof he has handed to magistrate Aaron Bugeja. 

“I have no doubt that the magisterial inquiry will reveal that Schembri took kickbacks, as I provided the proof myself. This will mean that Muscat will have to resign as he and Schembri are one and the same.

“Muscat had known for at least a year that Schembri owned a Panama company in which he planned to deposit millions earned through commisions, and he has constantly defended him which means that he has assumed responsibility for his chief of staff’s actions.”

Busuttil said that he has faith in Aaron Bugeja but not in the inquiry itself, arguing that Pilatus Bank had smuggled out evidence from the bank in a suitcase on the night the Egrant story broke.

“It is possible that the magistrate will not find proof [that Michelle Muscat owns Egrant], but if so that would mean that the evidence had been removed earlier,” he said. “If, for arguments’ sake, the inquiry doesnt find proof then the situation would still have been of Muscat’s own making because suspicion [that he owns Egrant] had crept into people’s minds a long time ago.”

During the interview, Muscat pledged to resign as Labour leader if he loses the election. Busuttil refused to even entertain such an eventuality, arguing that “Malta will definitely win the election”.

Muscat said that his first move if he is re-elected Prime Minister will be to enter discussion with social partners on the introduction of bank holidays, and to kickstart reforms in the housing sector. Busuttil said that his first decision would be to order an independent investigation into the Panama Papers scandal and to sack police commissioner Laurence Cutajar.

Muscat refused to confirm or deny whether Konrad Mizzi will be in his next Cabinet or not, insisting that he will not commit himself to such decisions before the election. He admited that he would have probably gained political points had he sacked Mizzi as minister when the Panama Papers scandal broke last year, but said he decided to retain him as a minister without portfolio as he was convinced that he was the best person to spearhead the LNG power station project.

He said he has no problem with leading possibly the most neoliberal government in Malta’s history, arguing that economic growth has allowed the government to introduce social measures such as a rise in the minimum wage and the planned tax cuts. 

Busuttil was non-committal when asked whether he will scrap the sale-of-citizenship scheme, the American University of Malta contract and DB’s contract to develop the ITS land - three deals that he has criticised harshly. 

Instead, he said that he will try and clean up the IIP scheme, urge Sadeen not to build part of its university at Zonqor Point, and respect the decision of an ongoing NAO inquiry into the ITS deal. 

He didn’t deny that the PN had asked Sandro Chetcuti to contest the election, but did confirm that he had sat down with the Malta Developers Association boss in an attempt to build bridges between the PN and the MDA.

“Some people had tried to make it it out as though I had something against Sandro Chetcuti and developers. I won’t delve into what was said between us, but I did tell them that a future PN government would help sustainable developers by launching several regeneration projects for Malta’s dilapidated towns. That was the sense of the relationship that I started building with Sandro Chetcuti.”