Prime Minister orders independent inquiry into CapitalOne police investigation

Prime Minister orders inquiry following MaltaToday revelations that police had failed to pursue a money laundering investigation

Prime Minister Joseph Muscat
Prime Minister Joseph Muscat

Prime Minister Joseph Muscat has ordered an inquiry into revelations by MaltaToday that the Maltese police had failed to pursue a money laundering investigation into CapitalOne Investment Group, whose ultimate beneficial owner was a Dutchman investigated by the Dutch police following a drug bust.

PN deputy leader Beppe Fenech Adami was one of the directors of a fiduciary services company that handled the financial transactions of CapitalOne Investment Group.

Addressing a political activity in Balzan, Muscat said the inquiry will be led by a retired judge who will have all the freedom to investigate without any political pressure. 

"Many of you might have expected me to pass a political comment on this matter, but my primary duty is that of a Prime Minister and not of a party leader," he told the crowd. "I don't want to say anything here that might in any way prejudicate the inquiry."

MaltaToday reported today that the Maltese police had in early 2013 failed to act on revelations that Fenech Adami was a director of a fiduciary company that had handled the financial transactions of a company used by a Dutch poker player who had been arrested in a drug bust. 

When Dutch police raided Robert Sooglea's apartment, they found thousands in cash, drugs, and papers showing that he was the owner of Senoblea Trading, a company holding 250,000 shares in CapitalOne and of a BOV visa card. 

CapitalOne was used to receive millions of euro, some of which were then deposited in a Valletta Fund Management account and used to pay off Soogea's expenses and purchase shares in several Greek companies, most of which are now defunct. 

Further investigations by Maltese police revelaed that CapitalOne was owned by a nominee company Baltimore Fiduciary, whose two directors included Beppe Fenech Adami - then a parliamentary secretary for home affairs.

However, sources close to the Dutch investigations told MaltaToday that the Maltese police had failed to pass on large chunks of evidence, mainly banking transactions that showed the suspicious movement of large amounts of money.  

Although Maltese police ordered an asset freeze, both Fenech Adami and fellow Valtimore director Robert Abdilla Castillo claim that they have no knowledge of the police investigations. 

Also, although such an asset freeze carried out by the Maltese police would have required a court order, the order does not appear in the public registry of the Financial Intelligence Analysis Unit, the state's anti money laundering agency.

Police investigators on 13 January pieced together a report for assistant commissioner [and future commissioner] Michael Cassar, in which they noted that one of Baltimore's directors [Fenech Adami] was a poltically exposed person and recommended that the case be referred to Europol. However, the CapitalOne file was marked "BU - 3 months" (bring up in three months' time), during which time the Dutch police dropped charges against Sooglea due to a lack of evidence. In December that year, the Maltese police marked the file as 'PU' (put away), and Fenech Adami resigned as director of Baltimore a month later. 

The Nationalist Party has dismissed the story as a deviation tactic from Castille to deflect public attention from the LNG tanker that is set to be berthed in Marsaxlokk Bay as part of Labour's flagship power station project. 

'Not even extreme US Republicans share Busuttil's stance on heavy fuel oil' 

In his speech, Muscat also hit out at the Opposition's severe criticism of the LNG tanker, which he said is a crucial step towards the closure of the Delimara power station, which he described as a "cancer factory". 

"Every modern country realizes that gas is more environmentally friendly than heavy-fuel oil. Not even the most extreme of Republicans who support Donald Trump are in favour of the continued usage of heavy-fuel oil as Simon Busuttil is," he said. 

Moreover, he argued that gas tankers are renowned to be safer than oil tankers and that the EU has ordered that all cruise liners shift their fuel operations from oil to gas. 

"With Busuttil's puerile logic, people who holiday on cruise liners are travelling on gas bombs," he quipped.

He added that the tanker will only be a temporary measure pending the installation of a gas pipeline between Malta and Italy. 

"When the previous PN administration had received an offer for a pipeline, they had turned it down because they were comfortable with the heavy-fuel oil system that used to grant some of them significant commissions."

He lambasted the PN's recent pre-budget document, accusing the party of lacking a plan and of calling for cuts in the public sector workforce and for the privatisation of some government services. 

"Who does the PN want us to fire from the public service? Teachers, LSAs or street-cleaners?" he questioned. "Also, they kicked up a storm when we had partially privatized Enemalta, but now they want to sell of parts of government to the private sector themselves."

Similarly, he dismissed the Opposition's long-standing call for fuel and utility prices to be reduced further due to drops in the market price of oil. 

"Oil prices are now on the rise, which means that we would have to increase tariffs now if the PN had their way. Malta's energy market no longer hinges on flucuations in the oil market and electricity prices will therefore remain cheap."

More in National