Murder on the Malta Express

by Carlo Bonini

Joseph Muscat started moving away from his leader’s coat tails after the referendum. He contested the first European Parliament elections, winning resounding support from Labour followers of his TV appearances.

  Aged 33, Muscat was becoming Labour’s most prominent politician. He married Alfred Sant’s personal secretary, Michelle Tanti. Putting love aside, observers noted the marriage was also strategic, if not dynastic in the classical sense. He used his time in Brussels to make friends on the scene and sat on the European Parliament’s joint commission with the Azerbaijan government developing a keen interest in the affairs of the fabulously corrupt Caucasus republic.

  Above all, he lay low, fully expecting Alfred Sant to lose yet another election in 2008, his third electoral loss in a row. Alfred Sant was close to winning that election and lost by fewer than 2,000 votes, the narrowest gap between winners and losers in a Maltese election.

  Alfred Sant had got close, but not close enough. His overdue departure from the leadership of the PL was now universally accepted, even by him.

  It was time for Joseph Muscat, TV star extraordinaire, to fly back to Malta from Brussels and save the PL from its losing streak.

  Five years later he would be prime minister.

  ‘JOHNNY CASH’

  Silvio Zammit asked for the bung on the eve of Valentine’s Day 2012. Swedish Match, a tobacco company, had been trying to overturn a European Union (EU) ban on snus, a smokeless tobacco held in the mouth between the gum and the upper lip. It was popular in Sweden but banned in the rest of the EU. Silvio Zammit was a small-time bit player. In Malta he owned a waterside burger joint called Peppi’s Kiosk. In Brussels he was of no consequence.

  But the man who was then European Health Commissioner, John Dalli, was also Maltese and he and Zammit were good friends. Dalli had the power to overturn the ban. So when Zammit met Johan Gabrielsson, the director of public affairs at Swedish Match, at Peppi’s Kiosk, he told him that Dalli might be able to intervene in the snus matter but such ‘an operation would [have] a cost’.

  The price tag? €60 million.

  The Swede said it was not his call to make but thought his company would not go for it. He was right. Swedish Match instructed Gabrielsson to cut contact with Zammit.

  Zammit did not give up that easily. The following week he made contact with the lobby group ESTOC, the European Smokeless Tobacco Council. The following is a transcript (edited for clarity by the authors) of a telephone conversation which took place on 29 March 2012 between Zammit and Inge Delfosse, Secretary General of ESTOC. Delfosse recorded the call and eventually handed over the recording to OLAF, the EU’s anti-fraud squad:

  Delfosse: Hi, Silvio.

  Zammit: Now. Ah, listen, Inge. What is the best thing that I can offer you … a package of lobbying services, right?

  Delfosse: Yeah.

  Zammit: What I can guarantee … proposal to lift the ban.

  Delfosse: You can guarantee a lift of the ban. Is that what you said?

  Zammit: The proposal.

  Delfosse: Aha.

  Zammit: OK? Er and what I can make you as well … high-level meetings…

  Delfosse: Aha.

  Zammit: Aah, to end the rumours, sort rumours. And … obviously, aah, this is as soon as I give you the guarantee that lifting can be proposed, OK?

  Delfosse: OK …

  Zammit: Aah, regarding the price. For sure, it will start after the first, high-level, meeting …

  Delfosse: Yeah …

  Zammit: Once your boss and my boss are together, obviously, they will be discussing the issue to how you finalise or further materialise this, this issue. You understand?

  Delfosse: Yeah.

  Zammit: So for after that, after that meeting, to carry on after, first payment of ten million.

  Delfosse: Ten million?

  Zammit: Yeah.

  Delfosse: I am sorry, ah. I’m a poor blonde, aah, I’m a bit shocked here.

  Zammit: Well, are you sitting down?

  Delfosse: Yeah, I am almost lying down now …

  The phone recordings and a mass of other evidence were set out in a leaked report by OLAF into John Dalli. The investigation was headed by Giovanni Kessler, OLAF’s then head and a former Italian anti-mafia investigator in Sicily. Critical to OLAF’s findings were a series of meetings, phone calls, texts, and emails between the Swedish tobacco lobbyists, Zammit, and a Maltese lawyer called Gayle Kimberley.

  OLAF had hard evidence of meetings and phone calls between Dalli and Zammit and also a handwritten note of a conversation between Dalli and Zammit made by Zammit himself. The note said Dalli was ‘ready to meet the chief executive’ of Swedish Match and that Dalli’s response to the big question was ‘suggest to no ban’. Zammit told OLAF investigators that his notes were ‘meaningless scribbles on a piece of paper’. OLAF said this explanation ‘[could not] be considered credible’.

  Both Swedish Match and ESTOC behaved entirely properly by telling OLAF what the Maltese fixer was suggesting. OLAF’s investigation led to a prickly meeting on 16 October 2012 at 3pm, when the then head of the EU Commission, José Manuel Barroso, all but fired John Dalli.

  By an extraordinarily strange coincidence, five years later, on the same day at the same time, Daphne Caruana Galizia was assassinated.

  John Dalli hated and still hates Daphne with a passion, calling her a ‘terrorist’, ‘a poison pen’, a ‘megalomaniac who brainwashes the people’ and so on. Daphne thought Dalli was a crook, a liar, and a conman. The difference between them was that she had a mass of evidence to back up her claims. So did OLAF. Dalli had nothing to show for his description of Daphne as a ‘terrorist’, never mind the rest.

  In May 2015, Daphne gave an interview to two Danish journalists, Mads Brugger and Mikael Bertelsen, for a documentary called ‘The Great European Cigarette Mystery’. It was shown as part of the BBC’s Storyville strand in July 2017, three months before Daphne was assassinated. The camera shows a stone patio, then the inside of her beautiful home in Malta, a black Staffordshire bull terrier called Tony barking a few friendly woof-woofs and then Daphne speaks. She is considered, mesmerising, lethal.

  John Dalli, Daphne told the Danes, was originally quite a well-respected politician. I’m talking way back in 1987. He won the respect of a lot of people because he took decisive action at a time when Malta’s economy was a real mess. And then slowly there began to be whisperings, private conversations, about how corrupt he is. He was the minister responsible for the privatisation of state entities in Malta, including the banks, the airport and there were undercurrents about his involvement, about his maybe taking a cut. The Opposition at the time, the Labour Party, used to call him Johnny Cash because he had such a reputation for going after money.

  Brugger asked: ‘But there was no smoking gun?’

  No, she agreed, there was no smoking gun. Eventually the Nationalist prime minister made what I and many people considered to be a fatal error, which was to nominate him as Malta’s candidate for the European Commission, to get him off his own back and off the island. He exported the problem and inflicted it on a European-wide level.

  Dalli lost his job in Brussels because he had been caught red-handed in one of the biggest corruption scandals ever to dog the European Union. Officially, he resigned. Unofficially he was told that if he did not, he would be fired.

  Barroso had never liked his underling. Dalli had been the nominee of Malta’s prime minister Lawrence Gonzi (PN) when Barroso was forming his Commission after the 2009 elections. Dalli was moody, uncooperative, and clearly not committed to his job. He would fly out of Brussels without warning, going AWOL often to Malta, sometimes to odd destinations in the Caribbean. There was always a feeling that he was up to something. Word in Brussels at the time was that Dalli was bound to blow up.

  What had also been worrying Barroso was that, while the people of Libya were doing their utmost to overthrow the four-decade long rule of the Botox tyrant Mu’ammar Ghaddafi, his Commission included some
one with a long history of supping with that particular devil.

  The articulated policy of the EU was that they were happy to see the back of Ghaddafi. He had been a cruel tyrant, had gone through trigger-happy phases and was a kleptomaniac of the first order, syphoning wealth that properly belonged to the Libyan state but which under his regime became indistinguishable from his person.

  Dalli, however, had reasons to regret the downfall of the old colonel or ‘brother leader’ as Ghaddafi preferred to be known. And he gave voice using his platform of Health Commissioner, departing from the line set by Barroso. While Barroso declared that it was time for Ghaddafi to go, Dalli insisted Ghaddafi should ‘make his own decisions’.

  In 2004 Dalli had set up a consultancy firm advising businesses that wanted to set up in Libya. He offered access to the Libyan regime, some of which he secured during his tenure as a government minister in Malta. Between 1987 and 1996 and 1998 and 2004, as a government minister, he sat on the Libya-Malta joint commission, securing contacts with decision-makers in Ghaddafi’s regime.

  He was also director of Azizia Glass Manufacturing Company (AGMC), a multi-million-euro factory in Libya.

  In a 2007 speech in Valletta John Dalli said:

  Malta had served as a gateway between Libya and the outside world during the days of international sanctions … Business with Libya means business in Libya and face-to-face contact is essential.

  For years he had been that face, and his legacy was falling apart while he was ‘serving a sentence’ – that is how he described his Brussels job, as some sort of punishment in exile inflicted on him by Gonzi. If Ghaddafi fell, Dalli knew he would be unlikely to see his house in Tripoli for some time. Nor would he have access to his money-making schemes in Libya.

  Barroso complained to Gonzi about Dalli but there was nothing much either man could do. Frankly, Gonzi thought that by nominating Dalli to the Commission, he would be rid of a major problem back home.

  That would prove to be short-sighted.

  OLAF completed their report on 15 October 2012 and

  found that the Maltese entrepreneur [Zammit] had approached the company using his contacts with Mr Dalli and sought to gain financial advantages in exchange for influence over a possible future legislative proposal on snus. No transaction was concluded between the company and the entrepreneur and no payment was made.

  One last piece of the puzzle was the role of Gayle Kimberley, the second figure who tried to broker a deal between the tobacco lobby and Dalli. In 2012, Daphne drew attention to a report in The Times of Malta which quoted a police officer giving evidence before a Maltese court. The officer claimed Kimberley had been blackmailed by her then lover, Iosif Galea, over what to say in court. When OLAF interviewed Kimberley in Portugal that year, Galea was with her. OLAF asked her not to tell anyone about their investigation. OLAF discovered that Galea phoned Dalli from Portugal and met him on his return to Malta. Daphne had previously published a photograph of three men holidaying in Italy: Dalli, Zammit, and Galea. Daphne told the Danish journalists: ‘Gayle Kimberley’s involvement is tangential. Later she was subject to blackmail. OLAF would not have known that she was sleeping with Galea.’

  When the Danes asked Dalli about his friendship with Galea, he dismissed the issue. When Brugger tried to talk to Kimberley, she ended the call quickly. Brugger told Dalli that she sounded afraid. Zammit showed the Danes his bulging file of evidence. The Great European Cigarette Mystery documentary shows Brugger leafing through the file and coming across a nude photo of a woman.

  “What is that?” asks Brugger.

  “You’re not going to… er… do not… er…” stammers Zammit.

  “It’s a naked woman,” says Brugger.

  “It is she,” says Zammit.

  “It’s Gayle Kimberley?” asks Brugger.

  “What was that?” asks Bertelsen, who was sitting on the other side of the table and could not see the photo.

  ‘It’s a nude photograph of Gayle Kimberley,’ says Brugger to Bertelsen in Danish.

  ‘Don’t say nothing,’ says Zammit ‘… it’s illegal… it’s my evidence for the court.’

  One can only conclude from watching this extraordinarily powerful film, which itself stands on the shoulders of Daphne’s journalism, that the rule of law in Malta is as good as dead.

  The OLAF report did not find conclusive evidence of the direct participation of Mr Dalli but concluded that ‘he was aware of these events.’ OLAF does not have policing powers. The EU Commission could fire its employees for wrongdoing, but it could not put them in handcuffs.

  ‘The final OLAF report and its recommendations are being sent by OLAF to the Attorney General of Malta. It will now be for the Maltese judiciary to decide how to follow up,’ said a Commission statement at the time.

  That must have given Dalli some comfort. He had been suspected of corruption in Malta before, but it had never come to handcuffs. But he needed to be smart. Malta’s police chief, John Rizzo, was notoriously effective in fighting corruption. He cracked fake boating licence rackets and prosecuted public officers for soliciting bribes for services. The episodes caused considerable embarrassment to his political bosses.

  But his greatest feat was nabbing two Maltese judges for accepting bribes to reduce a drug lord’s jail sentence on appeal.

  When Rizzo, an appointee of then prime minister Eddie Fenech Adami (PN), arrested Chief Justice Noel Arrigo in 2002, also a Fenech Adami appointee, the glaring weakness of Malta’s institutional design did not prevent justice from taking its course. The chief justice was prosecuted, convicted in 2009, and served his sentence in disgrace. Rizzo had done his job and there was no fear that the prime minister of the time would use his powers to fire the police commissioner to avoid the political embarrassment of having appointed a crook to the bench.

  Everyone took it on the chin. The show went on.

  Dalli could not afford to risk Rizzo’s determination to get to the bottom of things. Neither could he count on Gonzi to look after him.

  Eight years earlier, in 2004, Gonzi and Dalli had been the final two PN candidates competing to replace Fenech Adami who had been party leader since 1977 and a hard act to follow. In 1981 he won the popular vote for the PN and finally became prime minister in 1987. He then went on to win every subsequent election but one, right up to 2003 when he secured his main objective: EU membership for Malta.

  Dalli came up the ranks in the Fenech Adami administration, serving as finance minister for 10 years and earning himself the moniker ‘Johnny Cash’. He was a favourite target of the PL, not least because as finance minister he often had to be the harbinger of bad news – new taxes, higher costs, currency devaluation. But he also presided over the transformation of Malta’s economy from a controlled Soviet-style state-owned protectionist model to an open economy based on services and aligned with EU laws and standards. That was no mean feat.

  But finance minister is never the best job to nurture the grassroots support one needs to make prime minister. Dalli found his aspirations frustrated by Gonzi, a suave lawyer who became Fenech Adami’s anointed heir.

  The party’s grassroots took their cue and voted Gonzi over Dalli two to one. Dalli did not hide his bitterness at the outcome. Gonzi made Dalli a government minister but scandals would emerge that forced his dismissal. Dalli had barely survived allegations circulated by a businessman in the late 1990s that he had hidden money offshore. But in 2004 a fresh scandal led to his resignation. His daughter had set up a travel agency and, not only had his ministry switched its business to her firm, but he had also persuaded a state-owned Iranian shipping company to take their business away from their local agents and use his daughter’s firm.

  Dalli, in other words, stank of dead fish.

  He resigned, protesting his innocence and claiming his downfall was the result of a conspiracy between his enemies within the PN and some journalists, chief among them, Daphne.

  Daphne had certainly reported in detail on th
e scandals that had consumed Dalli. Until then her entire writing career had been under PN administrations, save for a two-year blip between 1996 and 1998 when Alfred Sant (PL) was prime minister. She openly took sides, condemning Labour’s core policy against EU membership which dominated the politics of the period. She was also particularly suspicious of Labour politicians from the Mintoff (PL) and Mifsud Bonnici (PL) eras, before 1987, when successive Labour governments were marked by their Iron Curtain politics and institutionalised corruption.

  But, Daphne being Daphne, she would not ‘close an eye’ to the misdeeds of the PN. She was just as outspoken in her criticism, unusually so in the Maltese context as each party buried their scandals, fearing giving the other undue advantage.

  Dalli made his anger and bitterness personal. His remarks verged on the unhinged, and with time he would only become worse.

  While supposedly directing the European Union’s policy on health, John Dalli had been busy with other things. He approached Gonzi’s government with plans for an energy project that would use liquid natural gas (LNG) fired up on an onshore power station to provide part of the energy supply for the country.

  Dalli’s proposals, grouping together an undefined consortium of private interests he was somehow representing, came at a time when the Maltese government needed to take some strategic decisions on upgrading its electricity infrastructure.

  Demand had grown but what had really rubbed salt into the wounds was the 2008 oil crisis when Malta’s complete reliance on imported fuel oil for its electricity had exposed a huge economic vulnerability. Most of Malta’s fresh water supply came from desalinated seawater, using a great volume of electricity, all of it then powered by oil.

  Malta’s competitiveness in industry and tourism was hamstrung by electricity rates several times those charged in competing European countries. Producers for the domestic market, but also retailers and distributors, passed the inflationary impact on to customers. The same end-users were forced during the longer, hotter summers to use power-hungry air-conditioning and found that their electricity bills had become objects of constant anxiety.