Americans bar entry to US to Keith Schembri and Konrad Mizzi for ‘corrupt acts’

Unprecedented travel sanctions from US government’s OFAC on former Labour top brass

Konrad Mizzi (left) and Keith Schembri
Konrad Mizzi (left) and Keith Schembri

Keith Schembri, the former right-hand man to Joseph Muscat, has been slapped with an unprecedented travel sanction by the United States government.

Former Labour minister Konrad Mizzi was included in the latest designation from the US Department of State.

The Department of State announced the public designation of Mizzi and Schembri as having been involved in “corrupt acts that included using their political influence and official power for their personal benefit.”

Specifically, the US government said there was “credible information that Mizzi and Schembri were involved in a corrupt scheme that entailed the award of a government contract for the construction of a power plant and related services in exchange for kickbacks and bribes. Their actions undermined rule of law and the Maltese public’s faith in their government’s democratic institutions and public processes.”

The Department of State also designated Mizzi and Schembri’s immediate family members – Mizzi’s wife, Sai Mizzi Liang, and his two minor children; Schembri’s wife, Josette Schembri Vella, his daughter Juliana Schembri Vella, and his minor child. 

This action renders Mizzi and Schembri, and each of these members of their immediate families, ineligible for entry into the United States.

“This designation reaffirms the U.S. commitment to supporting the rule of law and strengthening democratic institutions in Malta.  The Department will continue to use authorities like this to promote accountability for corrupt actors in this region and globally.”

An official from the US Embassy in Malta said today's announcement sends a strong signal that the United States stands with Malta in the fight against corruption. 

"Public designations under authorities such as this allow the United States to promote accountability and to disrupt and deter future abuse.  The United States is committed to promoting accountability for those involved in significant corruption and will continue to use all tools available to combat corruption globally," the official said.

The move against Schembri and Mizzi, the latter sacked from the Labour parliamentary group in 2020 in connection with the Enemalta Mozura wind farm scandal, has taken the Maltese government by surprise.

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Never before has anyone so close to a political administration or party, been affected by such a travel sanction. Schembri – a businessman with major commercial interests – and Mizzi, both implicated in the Panama Papers in 2016, were Joseph Muscat’s closest allies.

Section 7031(c) of the Foreign Operations and Related Programs Appropriations Act, 2021, officials of foreign governments and their immediate family members “about whom the Secretary of State has credible information have been involved, directly or indirectly, in significant corruption, including corruption” shall be ineligible for entry into the United States.

Keith Schembri held high public office as the chief of staff to his friend and prime minister Joseph Muscat.

He had been a key person in Muscat’s strategy to turn Labour into a “pro-business” party, and was privy to all government workings, projects, contracts, and even sensitive national security information shared by the Security Service.

Meanwhile, Konrad Mizzi was the government’s first energy, then health and finally tourism minister. He spearheaded the Labour Party’s most controversial government projects, including the Electrogas power plant, Enemalta’s Montenegro wind farm project, and the Vitals hospitals privatisation deal.

But in 2016, Daphne Caruana Galizia Keith Schembri and Konrad Mizzi in the Panama Papers, showing they had opened offshore companies after the general election of 2013 and created trusts in New Zealand.  The companies, Tillgate Inc. and Hearnville Inc., were formally acquired by Schembri and Mizzi in the summer of 2015.

It was eventually revealed that the two Panama companies stood to receive payments from the Dubai-based company 17 Black for services that were never specified.

Reuters then revealed in 2019 that the owner of 17 Black is Tumas Group CEO Yorgen Fenech, a shareholder in Electrogas, and that the company had an account at Noor Bank.

A year later, Fenech was arrested on his yacht and identified as a “person of interest” in the Caruana Galizia murder investigation.

Earlier this year, Keith Schembri was charged on various money laundering and financial crimes. The charges stemmed from allegations that Schembri transferred €650,000 through various offshore companies and then paid out in the form of financial instruments.

Konrad Mizzi remains an independent MP after being ousted by the Labour Party parliamentary group in June 2020 when it was revealed that Yorgen Fenech’s 17 Black had profited from Enemalta’s purchase of a wind farm project in Montenegro in 2015. Back then, Mizzi was energy minister.

Malta should not be 'place of refuge' for the corrupt - Repubblika

In reaction to the designation, NGO Repubblika warned that impunity continues to reign in Malta. 

"While the American authorities are taking steps against corruption tied with the Electrogas power station prject, the Maltese authorities have done nothing. In fact, up until a few days ago, Electrogas enjoyed full-page adverts in newspapers," the NGO said. 

Repubblika urged authorities, especially the Police Commissioner and Attorney General, to take action and make sure those who abused of their power, are held accountable for their behaviour.

'A black stain on Malta' - PN

The Nationalist Party said the designation was unprecedented and puts Malta in a bad light. 

"Both the Prime Minister and his MPs continue to defend [Konrad Mizzi and Keith Schembri] strongly in Parliament, as had happened in the Public Accounts Committee," the party said in an official statement.

The PN added that the Police Commissioner and Attorney General are failing to fulfil their duties to investigate Keith Schembri and Konrad Mizzi. "The situation confirms why Malta got greylisted."

"Today we saw how corruption has a price - a price that the people will pay because of the Labour government's corruption."