by Carlo Bonini
The safe in the kitchen at Pilatus Bank also contains the documents that answer the question which the whole of Malta has been asking this past year: who owns Egrant Inc, the third company Brian Tonna set up in Panama, for somebody so important that the name had to be given over Skype, rather than in an email as it was for Konrad Mizzi and Keith Schembri.
Those documents in the Pilatus Bank kitchen-safe are declarations of trust which show that shares in Egrant Inc are held by Mossack Fonseca nominees for ‘Mrs Michelle Muscat’.
The declarations of trust were provided to the bank by Brian Tonna, as a prerequisite for opening an account for Egrant Inc, for which the identity of the ultimate beneficial owner is required. Mrs Muscat’s name is also given on another document held in the bank’s safe: the account opening form for Egrant Inc.
These documents have been scanned and uploaded to the cloud, for security purposes, by third parties so that they cannot be destroyed by the bank.
The scanned and uploaded documents were never published.
Daphne did reveal transcripts of the documents but said that publishing scans of the documents themselves could reveal the identity of her sources which she was duty bound to protect.
When Daphne published this post, the country had already been waiting with bated breath. She had a knack for building up anticipation by putting up curtain raisers on the days leading up to her biggest revelations.
The day before, she had published the following:
A company owned by Leyla Aliyeva, one of the two daughters of Ilham Aliyev, ruler of Azerbaijan, transferred very large sums of money, described as ‘loan payments’, to Hearnville Inc, Tillgate Inc, and Egrant Inc last year.
The company, which is incorporated in Dubai’s free zone, is called Al Sahra FZCO, and Ms Aliyeva is the ultimate beneficial owner.
The payments were made through Al Sahra FZCO’s account at Pilatus Bank.
More about this tomorrow.
Eventually Daphne would report that Leyla Aliyeva’s company paid over €1 million into the Panama company belonging to the prime minister’s wife.
On Friday 21 April 2017, another bombshell:
Ali Sadr Hasheminejad has a sister, Negarin Sadr Hasheminejad – known by the shorter form of Negarin Sadr – who has a fashion business called Negarin London. Both siblings live between London and the US.
In March last year, Pilatus Bank received urgent instructions to open an account for Negarin Sadr, the chairman’s sister. It was late in the evening, but bank officials were told that it couldn’t wait until the next day.
The account had to be opened immediately and a loan of US$1 million granted there and then to Negarin Sadr for her fashion business.
Then another instruction came in: as soon as the loan was processed, a significant proportion of it – approximately US$400,000 – was to be paid out from Negarin Sadr’s loan account to a bank account held by ‘a Maltese woman who lives in New York and has a jewellery business called Buttardi’.
The Maltese woman was Michelle Buttigieg – no relation to Pete Buttigieg the US Democratic contender for the presidency who has Maltese ancestry. Buttigieg is a common name in Malta. Michelle Buttigieg was in New York because the government had appointed her as ‘tourism representative’ ostensibly to promote Malta as a holiday destination to American tourists. Buttigieg was also Michelle Muscat’s business partner; they had started a jewellery business called Buttardi in 2002.
On 8 April 2015 Michelle Buttigieg and her husband William bought Unit 1E, a single residential unit in 402 East 74th Street, New York, for $790,000. The purchase was registered in September 2015 and was secured by a mortgage granted to Michelle Buttigieg and her husband by JP Morgan Chase Bank.
In April 2017 Daphne reported that Michelle Buttigieg had a year earlier, in March 2016, received a considerable sum of money from the sister of the owner of Pilatus Bank.
On 13 April 2016 JP Morgan Chase Bank informed the New York public registry it no longer held security on the property as it was no longer owed any money on the mortgage it had granted to Michelle Buttigieg just the previous March (2015).
The sudden settlement of such a large mortgage was never explained.
19 to 21 April 2017 were very dramatic days in Malta. As Daphne posted her series of exclusives about Egrant and Pilatus Bank, the entire political edifice of the country was under incredible strain.
The Panama Papers had already led to the removal of two prime ministers in Iceland and Pakistan. One of them was on trial and facing many years in prison. Joseph Muscat seemed immune to the revelations about his underlings but it was reasonable to expect that if a company owned by his wife had taken bribes from the Azerbaijani regime and the family of an Iranian banker, he would not be able to get away with it.
But Joseph Muscat had other plans.
Speaking to the press, he said:
This is the biggest political lie ever told in this country, he told a press conference. In front of the Maltese public, I swear, I categorically deny I had, or have, any type of undeclared account or company in Malta or overseas. We never signed any type of document which transfers shares of a company. I have never signed, never been offered to sign …
That was around 7pm on Wednesday 19 April.
Malta’s news reporters were in a frenzy. They ran around, microphones and cameras in hand, looking for quotes. A camera crew tracked down Michelle Muscat coming out of the official town residence of the prime minister in the central village of Ħal Lija with her children and a band of guards and hangers-on.
She gave a short comment to the press which, considering her record on previous occasions, was remarkably well put:
This is a vicious lie against my husband and me. We’ll continue working serenely for the good of the country.
Another camera crew found the police chief Lawrence Cutajar on a boys’ night out, eating the traditional meal of fried rabbit and chips. Was he going to do anything about Daphne’s claims that the prime minister’s wife took bribes and laundered them through an off-shore company, he was asked. He batted them away and said he saw no reason for any urgent action. The lot of a chief of police, not even allowed to eat his rabbit in peace.
But the evening was not over. Reporters at Net TV, the station owned by the PN, were tipped off that the lights were on at Pilatus Bank. It was after 9pm and a lot could be happening inside those offices bearing in mind the day’s revelations.
At around 9.30pm, the lights inside the bank went out and a man and a woman came out of a rear exit carrying two suitcases. A Net TV reporter and camera operator chased the couple down the 300 metres from the bank to their car, asking them repeatedly in Maltese who they were and what they were taking out of Pilatus Bank so late at night.
All this was captured on camera. The man and the woman marched steadily, ignoring the reporter’s questions. It was only when they got to the car that the man spoke, claiming he did not understand Maltese. The reporter, stunned, apologised and repeated the simple question in English. ‘Who are you and what are you doing here?’ But by then they had driven off.
Net TV aired the footage that evening without a clue who the two were. Daphne Caruana Galizia enlightened them. The woman was a manager at Pilatus Bank and the man was Ali Sadr Hashemi Nejad.
The night would have more surprises in store.
After footage aired of Ali Sadr taking two bags out of the bank, the government issued a statement through the official Department of Information in the middle of the night.
The significance of this was that the prime minister had already addressed the allegations in a hurriedly-called press conference at 7pm. He had denied the allegations and said there was no call for any investigation, let alone resignation. Minutes later, the police chief echoed his view.
But in the middle of the night, the prime minister changed tack. By 6am, online portals were reporting that the prime minister had instructed his personal lawyers to request a magisterial inquiry to determine
whether he or his wife really did own Egrant and really did use it to launder proceeds from bribes.
Meanwhile, plane watchers reported seeing a private jet taking off from Malta on Thursday 20 April at 4am without any passengers on board. It landed in Baku in Azerbaijan, then flew on to Dubai.
The private jet was operated by the leasing company Vistajet, a plane-chartering business that operates a taxi service for the ultra-wealthy. The company is based in Malta but operates no scheduled flights and, given its stratospheric fees, does not carry holiday-makers. Nine days later, Vistajet would be paid €1 million, a sizeable chunk of Malta’s entire tourism marketing budget, to carry adverts on its inflight magazine.
At about 8am, the police led by Inquiring Magistrate Aaron Bugeja fell upon the offices of Pilatus Bank in Ta’ Xbiex, sealing it and collecting evidence. Justice would be served. Or would it? What if the evidence had somehow been spirited away in the 15 hours which had passed since Daphne’s report had been published? What if it had been placed in suitcases and flown to Baku in a private jet?
Over the next 10 days, a political crisis ensued. ‘Crisis’ suggests that the government was unstable or the prime minister’s fate uncertain. That would be misleading. Absolutely no one in Joseph Muscat’s parliamentary party was of a mind to express even the slightest doubt about his side of the story.
But there clearly was a feeling in the country that this could prove complicated for a prime minister who had overcome many other obstacles previously. None had been quite like this.
Daphne’s stories were invariably flatly denied by the government. But time and time again, her journalism stood up to scrutiny. No police action followed any of her reports before Egrant. More libel suits were fired at Daphne, giving PL supporters all the proof they needed to believe their political heroes had been wronged.
The demonisation of Daphne Caruana Galizia was in full swing. Regimented armies of trolls went online, harnessing the vocabulary used to describe her over decades: she was a witch, a traitor, a hater, a liar. And, of course, she was serving the interests of the PN.
No one was going to take into account Daphne’s work on the case of John Dalli, a veteran PN politician, for example. In a dual system of politics, Daphne belonged to the ‘enemy’, the Nationalists, those who would invent any sort of lie to secure power.
In the frenzy, there were other twisters going about. One of them was the witch-hunt for Daphne’s source at Pilatus Bank. Ironically, even as they sought to discredit Daphne’s reporting, an online lynch-mob was looking for her source. Of course, if the source was somehow lying about Joseph Muscat, then Daphne might have been the innocent victim of a hoax. But logic is rarely the strong point of the online troll.
The term ‘magisterial inquiry’, as we have seen, can be a little misleading to anyone unfamiliar with criminal proceedings in Malta. It functions more like an inquest than any form of proper investigation. A magistrate’s job is not to determine whether a crime has occurred, or to find the perpetrator. It is to collect the evidence and present it with a recommendation to the attorney general, who then takes a decision whether to instruct the police to prosecute.
Although the limitations of a magistrate’s powers in this case are clearly known to people working in criminal law, an ongoing magisterial inquiry is often a useful political tool to enable the false claim that a proper investigation is underway. If an inquiry draws a blank, politicians are quick to use that fact alone as an acquittal, which it is not.
The prime minister’s supporters may have hoped Magistrate Aaron Bugeja would wrap up his inquiry in a matter of days. He summoned Daphne Caruana Galizia to answer questions in his courtroom and – the assumption was – since there would be nothing to back up her claims, the matter would end fairly quickly.
Maria Efimova was reading the newspapers, perhaps not entirely comprehending the enormous political storm her conversations with Daphne had unleashed. She had grown to admire the journalist. She liked her determination to get to the bottom of things but also her indomitable courage in the face of a regime Maria knew could be corrupt and could turn rough. She had learnt that from her dealings at Pilatus Bank and her experience with the local police.
In an interview with co-author Carlo Bonini after Daphne’s death, Maria Efimova says she brought up with Daphne the possibility of physical danger. She had been on a bus in Msida one sunny morning when she found herself stuck in a traffic jam, by no means a rare occurrence on the island, and later learnt it had been caused by a fatal car bomb up the road.
Maria Efimova asked Daphne if she should not be more careful, but Daphne dismissed her fears and replied: ‘What are they going to do to me, blow me up in a bomb?’
It wasn’t such an unrealistic prospect. Daphne had seen one of her dogs poisoned, another’s throat slit. The door of her house had been set on fire, its glass panes shattering and the flames licking sleeping quarters, while she and her family slept, only waking up and escaping death in the nick of time.
As Maria read what was being said about Daphne, she felt responsible. Blowing the whistle on Pilatus Bank was grounded in how badly that bank had treated her, firing her without pay. But the reason the bank had fired her in the first place was that she had repeatedly spoken up against her employer’s bad practices. That had been a principled stand. It felt far less principled for the whistleblower to hide behind the journalist.
On 28 April 2017 Maria Efimova showed up at the law courts and asked to speak to Magistrate Aaron Bugeja. She was unceremoniously turned away. As magistrates who conduct inquiries also act as judges in other cases, they do not hold office hours for the public. On the contrary, it is considered unacceptable for a magistrate or a judge to be seen speaking to interested parties outside the formal confines of the courtroom.
Moreover, magisterial inquiries are conducted behind closed doors. Witnesses are warned not to repeat what is said inside, and not even confirm they have testified.
Frustrated, Maria Efimova called Daphne and said she wanted to give evidence. Daphne called the court registry and, after hushed exchanges, Maria Efimova was brought in front of Magistrate Aaron Bugeja to speak of what she knew.
She outed herself to the magistrate of her own free will.
Consequently and unwittingly, she outed herself to the entire population of Malta and the world. Despite all the theoretical secrecy of inquiries, her identity was leaked to Malta Today, one of the local newspapers, who published the identity of the whistleblower everyone had wanted to know.
The lifetime experience of Daphne Caruana Galizia testifies to the pathological collective misogyny in Maltese culture. Although it can be argued that the mockery, the vicious attacks and the threats she suffered were in proportion to the seriousness of her revelations, incomparable with the work of any other journalist working in Malta, the fact that she was a woman amplified the attacks many times over.
Because she was a woman, it was easier for people who did not want to believe her to dismiss her work.
Maria Efimova’s experience became another example of the pervasive misogyny present in Maltese society. Young, blonde Eastern European women are branded ‘strippers’ or ‘prostitutes’ in the Maltese context. And, for some, it was more convenient to view Maria Efimova as a honey-trapping troublemaker, than to accept that she was a public-spirited whistleblower keen to stand up to wrongdoing.
Joseph Muscat exploited that prejudice.
Days after the name Maria Efimova became publicly known, a report on specialist website Intelligence Online claimed ‘the MI6 and the CIA are highly concerned by what the Russian couple has been up to in Malta. Some officials perceive it as a move to destabilise Malta’s pro-western Prime Minister coming from the Kremlin, especially because it occurred at a time when Muscat was openly opposed to Moscow.’ The article itself goes on to claim that MI6 and the CIA were concerned about possible Russian interference in the next Maltese election.
The term ‘Russian couple’ was an e
rror as Maria Efimova’s husband is Cypriot. The MI6 and the CIA, if this reporting was accurate, were being unusually sloppy on the details.
Asked to comment on the online report, the prime minister said he was informed by two allied security services that the Egrant story was invented to pay him back for not allowing a Russian ship to enter Malta for refuelling on its way to the Syria conflict. However, he did not have evidence that the people inventing the Egrant story were connected to the Russian secret services.
The prime minister made another claim. At the time Malta held the EU Presidency. One policy pushed by Malta was to speed up the waiving of EU visas for Ukrainians after the 2014 Russian invasion of eastern Ukraine. That policy had, the prime minister claimed, irritated ‘certain people’ and there was going to be ‘some form of retaliation’.
Maria Efimova was, of course, Russian. So Muscat’s supporters could have been tempted to think that if the government was being got at by the Russian state, then Efimova could well be a Russian intelligence agent.
The Russian authorities denied any intelligence connection with Maria Efimova. In subsequent interviews, Maria said the Russian embassy had asked her to keep a low profile and avoid public appearances or engagements with the press. She had given one interview to The Malta Independent, for whom Daphne wrote a regular column, basically restating what Daphne had already reported, and confirming herself as the source.
After the warning from the government of her native country, Maria Efimova clammed up.
By then, however, Joseph Muscat had created the impression that he was the innocent victim of an international conspiracy in which Daphne was a central player, though not necessarily the mastermind.
On 1 May 2017, at a massive PL gathering right outside his office, Joseph Muscat said Daphne, her allies in the PN, and anyone else whose nefarious interests were served by the instability of his government, had brought the country to a crisis it did not need.