Intelligence firm denies authoring ‘Russian hit-job’ theory on Caruana Galizia

A private investigative firm based in Luxembourg has denied press reports that it prepared a report suggesting that Daphne Caruana Galizia could have been assassinated in a Russian plot.

The firm, Sandstone, was engaged by British PR firm Chelgate, which in turn was engaged by the Maltese government to defend it in a fake news probe by the House of Commons.

Excerpts of the research seen by EUobserver posited that Russian President Vladimir Putin and Azerbaijan President Ilham Aliyev had conspired to assassinate Caruana Galizia, using a Chechen killer, the newspaper said.

According to the excerpts, the report would have suggested that Azerbaijan’s Ilham Aliyev – whose family and oligarchs had accounts in the now-shuttered Pilatus Bank in Malta – “had incontestable connections with Malta’s top officials, including Prime Minister Muskat [sic], and their partners on the island”, a possible reference to the Electrogas project which includes Azeri state oil company Socar as a shareholder.

But the firm has rebutted the “false and damaging” allegations, and has taken criminal and civil legal proceedings against EUobserver in Luxembourg, where Sandstone and its director Frank Schneider are based.

“The report referred to by the EUobserver does exist, but it was not prepared by Sandstone or anyone working for Sandstone,” Schneider said in a statement reacting to the report.

“Sandstone was not commissioned by Chelgate or any other third party to prepare this report. Chelgate has never commissioned Sandstone to prepare any other report of this type. Nor did Chelgate commission this report to be prepared by any other body. Neither the report nor the contents of the report were provided to Chelgate by Sandstone or any other third party,” Schneider said.

“Until the publication of the EU Observer article, Chelgate had no knowledge of the existence of the report. It therefore follows that neither the report nor any of the theories, allegations or suppositions contained in the report were used by Chelgate or Sandstone in any briefings.”

Schneider said that Sandstone had confirmed that the report in question was among the material received by them from a variety of sources while researching the background to the controversies affecting Malta during 2018.

“Sandstone took the view that the report was weak and unconvincing, and chose to make no use of it. It was never forwarded in any form to Chelgate Ltd, nor to any representative of the government of Malta, nor to any other third party. It therefore formed no part of any media briefings,” Schneider said.

“The fact that this weak and inaccurate report was provided to the EUObserver, with false indications as to its usage, suggests an act of deliberate misinformation by a third party which by now has been identified by Sandstone and provided to the state prosecutor in support of the criminal investigation.”

Schneider said that while this information was provided to the EUObserver, no attempt to correct or withdraw its damaging and misleading article.

Chelgate was tasked to fight claims that the Labour government ever had dealings with Strategic Communications Laboratories (SCL), a British firm accused of election meddling.

The House of Commons’ culture committee had accused Muscat’s party of SCL, to which Chelgate replied with a letter to British MPs denying statements in the interim report that the Malta Labour Party had had dealings with the SCL group.

Chelgate’s full letter to the House of Commons committee remains confidential. The government is no longer a client of the firm, and Chelgate signed a non-disclosure agreement.

Malta had petitioned the House of Commons committee, saying MPs had listened to “unnamed sources” claiming SCL had given services to Muscat’s Labour.