Joseph Muscat in wait-and-see game on Keith Schembri and Konrad Mizzi

Prime Minister Joseph Muscat is sticking to silence on the latest revelations on two of his closest allies in government, choosing not to answer questions put to him by MaltaToday so as not to compromise ongoing magisterial inquiries.

In an email exchange from London, where Muscat is taking part in the Commonwealth summit, a spokesperson referred to “ongoing independent investigations” when asked about the Prime Minister's chief of staff Keith Schembri and Tourism Minister Konrad Mizzi.

“The Prime Minister will not prejudice their [the inquiries'] outcome. The PM’s position has always been clear, since before the general elections. If any wrongdoing is found, the persons involved would shoulder their responsibility,” the spokesperson said.

The independent investigations are a reference to the six magisterial inquiries that are still underway and which are investigating allegations of corruption and money laundering by people in high government positions.

On Wednesday, The Daphne Project, a consortium of international journalists, revealed an email that showed how the two Panama companies set up by Schembri and Mizzi had as their target clients two Dubai-based companies – 17 Black Ltd and Mackbridge Ltd.

More significantly, 17 Black received two payments, totalling €1.3 million, including a €1.1 million transfer from a Seychelles company owned by an Azeri national.

In his reaction to the international reports, Schembri acknowledged the existence of 17 Black, adding it had been included in “a draft business plan” for his group of companies but denied ever conducting business with it. He also denied knowledge of the money transfers.

Mizzi stuck to his standard reply that his Panama company was part of a family trust set up, denying the company ever had a bank account or that it had ever traded.

But Schembri’s reply was significant because in it he indicated, for the first time, that he had knowledge of 17 Black.

The information released by The Daphne Project came from a leaked report from Malta’s anti-money laundering agency, the FIAU. When the first reports on 17 Black and the possible use of the company to transfer kickbacks from the gas power plant project to Schembri and Mizzi emerged during the electoral campaign, both had dismissed the information.

At the time, the only proof available were excerpts of the FIAU report that did not contain the relevant email that was outed this week.

The pending inquiries

Magistrate Aaron Bugeja is leading an inquiry into the allegations made on Daphne Caruana Galizia’s blog that the Prime Minister’s wife owned the Panamanian company Egrant.  This was requested by the Prime Minister.

Magistrate Doreen Clarke is probing the leaks of compliance reports from the Financial Intelligence Analysis Unit about Pilatus Bank, requested by the anti-money laundering agency.

Former Opposition leader Simon Busuttil had asked for a magisterial inquiry into kickback allegations last year

Magistrate Consuelo Scerri Herrera is leading an inquiry into the leak of a preliminary FIAU report on Pilatus Bank to then Police Commissioner Michael Cassar in April 2016. This was requested by Pilatus Bank.

Magistrate Natasha Galea Sciberras is leading an inquiry into Keith Schembri and Brian Tonna of Nexia BT, over kickback allegations on the passport sale scheme. This was requested by then Opposition leader Simon Busuttil.

Busuttil also requested an inquiry into allegations of money laundering by Schembri and former Allied Newspapers managing director Adrian Hillman through Pilatus Bank. This is being led by Magistrate Josette Demicoli.

The last inquiry into the financial dealings of Schembri, Mizzi, Hillman and Nexia’s Brian Tonna, as revealed by the Panama Papers, was requested by Busuttil after the June 2017 election. Magistrate Ian Farrugia had ruled there were enough grounds for the inquiry to start but the process has stalled after the people indicted in the proceedings, including the Prime Minister, appealed the ruling.

The questions sent to the Prime Minister and which remained unanswered

In relation to Keith Schembri:

1. Keith Schembri has admitted knowledge of 17 Black, saying this was included in a draft business plan for his companies. This is something he has said publicly for the first time. According to an email by Nexia BT, 17 Black and Mackbridge, both based in Dubai, were to be the target clients of Schembri’s Panama company. In view of this, I would like to know when the Prime Minister got to know that 17 Black did have a direct link with his chief of staff (it was included in a business plan)?

2. Did Schembri ever inform the Prime Minister of this linkage and if so, when?

3. Last year, when the original story on 17 Black broke, Schembri had failed to acknowledge the company. Did Schembri lie to the Prime Minister?

4. Is the Prime Minister satisfied with Schembri’s explanation to the latest revelations?

5. Will the Prime Minister sack Schembri?

In relation to Konrad Mizzi:

The email revealed this week clearly shows that 17 Black and Mackbridge were the target clients of both Schembri’s and Mizzi’s Panama companies. Mizzi has stuck to his previous reply that his trust set up, including the Panama company, were intended solely for family wealth planning services.

1. Is the Prime Minister satisfied with Mizzi’s explanation to the latest revelations?

2. Given the apparent contradiction between the explanation given by Schembri and Mizzi, does the Prime Minister feel he has been lied to?

3. Will the Prime Minister sack Mizzi?

Read also:

What we know so far from The Daphne Project