This could be a never ending subject thanks to, albeit sadly, what has been happening over the last four years and what is still happening daily.
However, I will restrict myself to commenting on the lack of transparency, the arrogance and lies of Joseph Muscat and Konrad Mizzi in respect of their statements and utterings on the involvement of Konrad in the Panama Papers.
In the Malta Independent of 27 February 2016 it was reported that, following a week of rampant speculation, Minister Konrad Mizzi revealed the names of and the dates on which his trust, Rototura Trust, in New Zealand and the shell company, Hearnville Inc, held by that trust in Panama were established.
Konrad Mizzi made the documentation on both the trust and the shell company available to the press in the interest of “full transparency”.
It is pertinent to highlight that when Konrad owned up, when asked by the journalists to divulge the name of the company, he replied that he could not remember it as the name was very technical and difficult to remember.
If Konrad really believed in transparency he would have divulged his Panama connection 9 months earlier and would not have waited to be virtually forced into revealing the details after a blogger broke the news of his overseas interests thanks to the International Consortium of Investigative Journalists (ICIJ) which published the Panama Papers in April 2016.
Correspondence between the Orion Trust (the trustees of the shelf company) and the directors of the shelf company in Panama, Hearnville, confirmed that Konrad Mizzi became the ultimate beneficial owner of the company on 2 June 2015, that is, 9 months before going public. It may also be appropriate to highlight that, according to the Panama Papers Konrad was the ultimate shareholder of the company, yet it was held in custody by ATC Administrators until transferred to the New Zealand Trust.
Interestingly, the document shown to the press by Konrad was signed by two ATC directors, Edilberto Reyes Gonzalez and Olga Londono. The ICIJ website document which was dated 2 July 2015, has different signatories than the document Konrad showed journalists which was dated 26 February 2016. Furthermore, the people behind ATC Administrators Inc, have a chequered past of their own according to online news reports in Costa Rica.
In another letter dated 24 February 2016 between Hearnville and the Orion Trust, it is confirmed that the Company had not yet traded to date and that it had no assets or bank accounts opened in its name up to 24 February 2016.
Konrad Mizzi said that “to ensure maximum transparency, even before the tabling of my Declaration of Assets, I have disclosed all the facts”.
He explained his choice of overseas locations for his financial affairs: “my wife is Maltese now but she was Chinese. We lived overseas, one of our properties is overseas and I am currently resident in Malta. Having a trust in New Zealand precludes me from also having foreign operations there, so we went for Panama”.
He also emphasised that he needed his secret family trust to populate it with the immovable property he had in UK and in Malta, and he needed the company to receive rental income on the UK property.
It transpired later that he could not transfer the flat he has in Malta to the Trust as this property was substantially pledged in favour of the lending bank.
I also question his mention of foreign operations and whether this was a babbling lapsus as this statement shows clearly that he intended carrying out transactions even though as a Minister he is debarred from doing so.
Also, up to the date of signature of the audit report on 21 September 2016, no property was transferred to the trust and neither the rental income of around Euro 25,000 on the London property was accounted for in the trust.
Note 2 of the consolidated financial statements (the company and the trust) prepared by the auditors, states that the accounts are presented using the United States Dollar, being the currency that reflects the economic substance of the underlying events and circumstances relevant to the group and the trust.
This is a very important statement in that international dealings in fuels are carried out in US dollars and Joseph Muscat and Konrad Mizzi have been finalising current deals and signing long term deals in fuel and energy with SOCAR, the State Oil Company of Azerbaijan.
In March 2016, Joseph Muscat said that a company was carrying out an audit on Konrad Mizzi’s company registered in Panama and that the audit company, which is an international audit firm (in fact it is a New Zealand local firm associated with an International firm Crowe Horwath, which also has a member firm in Malta represented by a certain John Abela) not based in Malta, will be named shortly. This was in fact never named. Konrad Mizzi himself spoke out loudly that he was the first ever politician to commission a tax audit on his affairs.
Konrad never mentioned a financial audit but always a tax audit and we now know that a ‘farcical’ financial audit was carried out and signed off on 21 September 2016, however we have not yet seen any results of the tax audit by the Inland Revenue Department except that he is being fined for not reporting the trust to the Inland Revenue Department as he was supposed to do in accordance with law.
I wonder why he did not follow this up by saying that he was also the one and only Minister of a Government in the European Union to be named in the Panama Papers.
He should have also mentioned that he set up a secret company to receive brokerage and management fees, at a time when he was the Minister responsible for Government’s multimillion projects which were negotiated directly by Joseph Muscat, himself and Keith Schembri, who also opened a replica secret company Tillgate Inc and a trust Haast Trust with the same objects and at the same time.
These companies were also immediately followed with the setting up of another secret company called Egrant, whose beneficial owner/s were communicated through Nexia BT via skype to ensure stricter secrecy. This beneficial owner is most likely Joseph Muscat who however, after a year of discernment and fingers pointing at him, declared that he is not the owner of Egrant (calling Simon Busuttil a liar in the process for suggesting that he was a likely candidate) and Brian Tonna in a likely cover-up fashion declared that he is the owner. My opinion on this is that I simply do not believe them and my bet is that the owner is Joseph Muscat or a close member of his family.
In the light of the declaration that the company had not yet traded and that it had not yet held any assets or bank accounts I question what audit Joseph Muscat was referring to.
I also question whether a letter of engagement was signed with the auditors and whether this letter was signed by Konrad Mizzi or Joseph Muscat. Letters of engagement are signed by the audit engagement partner on behalf of the audit firm and the legal representative of the client who is normally the director.
I do also question whether an important post audit document referred to as the Letter of Representation has been signed by Konrad Mizzi and given to the auditors. If this document has been issued, Konrad should also be transparent and publish it.
Furthermore, if Konrad is serious about transparency and wants to come clean, he should publish the trust deed and the company nominee agreement.
On 28 September, Joseph Muscat, questioned by journalists on the international audit firm and the deliverable report, replied “these things take time” and “auditors have to be sure that there is no money” and even “I have to be sure that everything is correct before I sign it off”.
In trying to take us for a long ride, Joseph Muscat should be aware that we are not talking of a multinational, but of a company which has shown in the financial statements to have no assets and to have not carried out any trade and therefore the audit should, under normal circumstances, have taken a few hours to complete.
The special purpose audit of the consolidated financial statements of Rototura Trust and Hearnville have now been published and signed off by the auditors on 21 September 2016.
This shows that Joseph Muscat was arrogantly lying on 28 September when he already knew that the audit was signed off on 21 September that is, a week earlier and also that the financial statements showed no income or assets and that the only visible transactions were the initial trust/company formation expenses and professional fees amounting to a total of around Euro 5,000. The famous Euro 92 cash repeatedly mentioned by Konrad did not even feature in the published statements.
Joseph Muscat also stated that the Director of Revenue was authorised by Konrad Mizzi to write to a large number of banks around the world to ascertain whether Konrad had any money in these banks.
It would be interesting to find out the details of these banks and whether the Director of Revenue did actually write to any banks.
In my opinion, this is another arrogant lie.
I surprise myself at the lack of knowledge and possibly deviousness with which Joseph Muscat makes such a statement.
When carrying out an audit or an investigation, the persons carrying out the audit/investigation have to be specifically and formally authorised by the client in writing to seek written information from the banks with whom they have accounts, declared or undeclared.
Furthermore, the client has to write directly to each bank authorising the giving of such information. In other words, Konrad should be able to give us a copy of these authorisation letters to his banks, if he really believes and wants to give proof of his transparency.
If Konrad has managed to open secret bank accounts, he would obviously keep these accounts secret, and we know that he has made many failed attempts to open secret bank accounts in many different countries. This we know, not as a result of his declared babblings of transparency, but because he was caught out once again, and exposed by the same blogger.
As regards Joseph Muscat’s third statement, I ask whether Joseph Muscat has actually signed off anything.
Audit reports and related reports on findings are always signed by the audit engagement partner and addressed directly to the client who, as far as we know, is not Joseph Muscat unless Konrad is acting as a front for him.
On 6 October 2016, Konrad Mizzi was testifying in Court in a libel case he instituted against the PN Deputy Leader Beppe Fenech Adami and he was asked by Beppe’s lawyer who the company carrying out the independent audit was.
Konrad refused to name the firm telling the lawyer that he should ask the Prime Minister. This is another instance of downright arrogance and a challenge to transparency in a Court of Law.
If I were the presiding Magistrate, I would have followed his refusal by asking whether the secret company and trust were owned by him or the Prime Minister, and if he continued to refuse to answer or to give a typical cynical reply, I would have sent him to confinement until he decides to respect the Court and court proceedings.
Konrad also said in Court that his company and trust had now been registered in Malta. I would like to invite Konrad to give us the names of the company and trust if he believes in transparency to defend himself, unless he cannot once again remember the names as they are too technical for a simpleton.
Personally, I do not believe him just as much as I did not believe him when he said that once the audit is completed, he will place the company in liquidation and close the trust. In fact, as at 23 March 2017, the company was still showing as active (vigente) in the Panama company registry. In fact, none of the 3 Panama companies have so far been placed in liquidation.
It would also be important for us to know the objects of the company and to have a copy of the trust deed as well as to be informed whether he has settled his UK property and the Malta property in the Trust, and also whether he has channelled the rental income on the London property to the Malta Trust.
During these proceedings, Konrad also said that he did not wish to name the international audit firm because he did not want someone to place it under undue pressure. What cheek, arrogance and deviousness in Court when he knew that the auditors had already issued the signed report.
Again, in my opinion, this was a matter for the Court to decide and not Konrad. Furthermore, if Konrad was convinced that the International audit firm is a serious and professional firm, its partners would surely not have given in to pressure.
On this issue, Joseph Muscat said that he did not know what Konrad said in Court because he was not there and also because he had not yet seen the transcripts. My reply to Joseph Muscat on this is “please stop fooling the people even if you want to keep acting the fool yourself”.
It has also been reported that, on 13 October 2016, Konrad refused to explain the proposed operations of his company in Panama which his financial advisers said would also be receiving profits from ventures in the “recycling” and “remote gaming” sectors.
He also refused to say why his financial advisers, Nexia BT, had said he did not want to inform local banks about his New Zealand Trust, and replied that the questions were “completely misleading”.
When pressed with further pertinent questions by the journalist, he replied “I am not sure whether you are working with the PN strategy campaign or, maybe, with your colleague Caroline (who has been appointed PN Campaign manager) on the matter, but essentially, I have nothing more to add”.
This was surely the typical arrogance and lack of transparency that is practiced by Konrad and his close Panama associates.
Addressing a Commonwealth Meeting on tackling corruption in London in early May, Joseph Muscat referring to the Panama Papers and Malta, said “It wasn’t nice. It led to an uproar back home, and I had to take tough political decisions that the Opposition criticises for not being tough enough. I think they were. Malta is a European financial services centre and I am here to face the music”.
This statement must have resounded in the corridors of the European Parliament which had just started discussing the Panama Papers and at which appointed Pana Committee Konrad Mizzi had to be summoned for an interview on his involvement in the setting up of the shady and secret companies and trusts in Panama and New Zealand.
It is pertinent to highlight the conclusion of the Pana Committee chair after Konrad’s interview: “Documents suggest potential money laundering, but no evidence. We will have to dig deeper.”
I would personally add that the setting up of this very secret structure with the main objective of receiving commissions together with the desperate effort made and still being made to open secret foreign bank accounts, shows clearly the real corrupt INTENT behind the structure and its promoters.
A leading British newspaper, The Guardian had pointed out the irony in Prime Minister Joseph Muscat’s upcoming speech to an anti-corruption forum. The Guardian surely hit the nail on the head.
Politico had also reported that, following the resignation of Malta’s director of the Financial Intelligence Analysis Unit, the alleged burying of a report into the saga has set alarm bells ringing among EU lawmakers worried about Malta’s ability to steer through new EU anti-money laundering legislation when it holds the rotating presidency of the EU’s Council of Ministers in the first half of next year.
In reply to this, a spokesman for Joseph Muscat had said “We are taking this issue very serious”.
No wonder that the report by Transparency International found that investor confidence in Malta’s political stability and transparency has fallen by 15% since 2015.
I ask: “what with Konrad Mizzi, the subject of Joseph’s Muscat very difficult decision, making very regular public appearances and public statements on behalf of the Energy and Health Sector, signing multi-million suspect contracts and taking an active part in Chairing the Energy Workshop during Malta’s presidency of the EU fully supported and pushed by Joseph Muscat”?
In this respect I suggest to Joseph Muscat to stop behaving like a devious fool even in international fora as this downgrades the reputation of Malta which has taken years to build up following on the dark years of a Socialist/Labour government.
This is downright Arrogance, Compulsive Lying and a living proof of a Government which has lost the meaning of Transparency not only in Malta, but also in the political world.
