by Carlo Bonini
He would therefore be calling a general election a year ahead of schedule, and it would be held on 3 June 2017.
The general assumption was that Muscat had called an election in reaction to Daphne’s stories. This is contradicted by evidence Daphne Caruana Galizia would later publish showing that the campaign slogans and website URLs for the 2017 campaign (in theory, the next general election was due in 2018) had been decided and registered weeks before she was in possession of the information she used to publish the Egrant scandal.
Joseph Muscat went to the polls in effect a suspect in a criminal inquiry for bribery and money laundering. His chief of staff Keith Schembri was the subject of a separate inquiry on the back of a leaked FIAU report that concluded there was a reasonable suspicion he had taken kick-backs from the sales of passports. Muscat, Schembri, and the former Energy Minister Konrad Mizzi, were appealing another court order calling for an inquiry into the findings of the Panama Papers.
Under normal circumstances, this would not have been the best setting for an electoral campaign.
High-profile people who had endorsed the Labour Party in 2013 were openly saying they were switching sides in disgust at the corruption of the ‘Panama Gang’.
At the climax of that electoral campaign, Joseph Muscat wheeled out some very famous friends who stepped up to endorse him. Italian centre-left PD leader Matteo Renzi spoke about his ‘friend’ Joseph Muscat and said ‘beyond politics there is loyalty and friendship. Joseph Muscat is a friend and I believe he will be the one to lead Malta into the future’ and former British prime minister Tony Blair recorded a video describing Muscat as ‘a great example of what a progressive politician could do in power’.
I know elections are always tough and sometimes they don’t always focus on the issues that matter, Tony Blair’s video informed the cheering crowd, but they’re a moment of great decision. And so, as Malta approaches election day, I congratulate him and wish him every luck.
What was Tony Blair doing, ten years out of power, toasting a political leader of a very small country in the middle of an election called ostensibly because of corruption allegations? To try and answer that question, we have to look at Blair’s cosy relationship with the fabulously corrupt regime of Azerbaijan’s President Ilham Aliyev.
Since stepping down from office, the former UK prime minister has set up what cruel wags call the BlairRich project. He works as a consultant for a number of big money contractors, one of the richest being a pipe-dream, literally, of President Aliyev. The president of Azerbaijan is planning the Trans Adriatic Pipeline (TAP) running gas from oil-rich Azerbaijan through Turkey, Greece, Albania, then along the seabed of the Adriatic to Italy. The pipeline is a competitor to Nord Stream 2, running from Russia to Germany. The logic behind the pipeline is simple, that it diversifies Europe’s energy sources, lessens its dependence on Russia, and helps energy poor southern Europe. Along the way, a lot of people could make a ton of money. They might include President Aliyev and Tony Blair.
The fly in the ointment is that Aliyev is a brutal dictator who fakes elections and locks up satirists. In Azerbaijan, an ex-Soviet Muslim country on the Caspian Sea, north of Iran and east of Georgia, President Aliyev’s nickname is ‘The Donkey’. When two satirists released a video with donkeys in suits, they were beaten up by thugs, then arrested and jailed for ‘hooliganism’. While they were still rotting inside, Blair rocked up in Baku in 2009 and gave a speech for a reported minimum of £90,000.
Peter Kilfoyle, then a Labour MP, said:
The very least he can do is donate his fee to a charity that works in the area of human rights. He should not be profiting from a country that flagrantly ignores human rights. There have long been questions about the Azeris and their approach to human rights.
Norman Baker, a then Liberal Democrat MP, said:
This is dirty money. It is demeaning for the former British prime minister to hawk himself around the world getting what cash he can. If he had an ounce of decency and self-respect he should now give this to an appropriate outside charity.
The father of Eynulla Fatullayev, a prominent journalist who was being held in solitary confinement at the time, said:
Why did Tony Blair come here? It was another blow to us – pure propaganda by the regime. The government was showing him off and saying: ‘Look who is with us.’ He was not here to support the Azeri people, or our democracy movement. He was here to support an authoritarian government, a dictatorship.
Blair’s spokesman said at the time:
This was a one-off speaking engagement, organised by the Washington Speakers Bureau in the usual way. It was not organised by the Government. Neither Tony Blair or Tony Blair Associates has any commercial or pro bono relationship with the president or the government of Azerbaijan.
But the bigger mystery is why did Blair bother to boost Muscat in the 2017 election? If Daphne’s journalism was right, the Aliyev ‘royal family’ were using Malta’s Pilatus Bank as a laundromat to clean up millions, maybe even billions, of dollars. For that to work, the Aliyevs needed the Muscat government to turn a blind eye.
The 2017 election posed a (slight) risk to that strategy, so, one possibility is, that to keep in with his fabulously rich friend, President Aliyev, Blair spent a little of his political capital on Joseph Muscat when most democratic leaders were supping with him using a long spoon.
A second possibility is that Blair liked Muscat because he grinned a lot.
Come 3 June 2017, Joseph Muscat would be re-elected prime minister with a consolidated majority.
Along the bumpy road of Panama scandals and Egrant troubles, Joseph Muscat lost the support of some high-profile switchers who had voted PL for the first time in 2013 because they had seen in him a great white hope. Corruption lost the PL some votes. But it also won the PL some others. The willingness to bend the rules is an attractive proposition for voters who want the rules bent for them. Corruption is, theoretically, a vote loser. But June 2017 proved it can be a vote winner as well.
Joseph Muscat’s charisma had not yet worn off. The PL core vote was still infatuated with its leader. A wider circle, a majority, thought it should give the prime minister the benefit of the doubt. In any case, the political cycle still favoured him.
On top of that, the economy was pumping. The low points of the international crisis of 2008 and the oil crisis that followed were in the past. Fair winds favoured Joseph Muscat. Add to that a construction boom caused by the relaxation of planning rules and a bullish demand for properties by a growing foreign population and you have ‘an economic miracle’. Hardly the atmosphere for the electorate to try something new.
After the election, the criminal case against Maria Efimova for allegedly defrauding Pilatus Bank was due for a fresh hearing. She did not show up in court. The court ordered her arrest for the next hearing.
At that hearing, the police informed the court they were unable to find Maria Efimova. Three months previously, before the Egrant scandal had erupted, the court had returned Maria Efimova’s passport on condition that she only travelled to Spain, Germany, or the Czech Republic, the three countries where her new employer had offices.
In the EU’s Schengen area, where people travel freely across borders without any passport checks, such a ‘condition’ is practically unenforceable.
After Joseph Muscat’s election victory, Maria Efimova used her passport to leave Malta. She was not planning on coming back.
The police said they would not allow her to escape justice and had issued an international arrest warrant against Maria Efimova to be dragged back to Malta to face fraud charges and fresh charges of lying about being mistreated by the police.
An international arrest warrant over a complaint of less than €2,000 is extraordinary. The costs of such a process far exceed any possible recovery from the crime, assuming it is proven, and is very seldom used for such relatively minor crimes.
The harder the Maltese authorities looked for her, the more
scared Maria Efimova became. When she learnt of Daphne’s assassination in October, she knew she had made the right choice to leave the country. There was no reason for her not to assume Daphne’s killing was not connected to ‘the biggest lie in Maltese political history’ as prime minister Muscat described Daphne’s Egrant story. She believed she, too, was in danger.
Needless to say, her former boss Ali Sadr Hashemi Nejad, owner of Pilatus Bank, had been vehement in his denial that any wrongdoing had ever occurred at his bank. His denials were categorical. He denied banking for the Aliyevs and just about everything else Daphne Caruana Galizia had written.
The week Daphne Caruana Galizia was killed, Ali Sadr took his efforts to clear his name a notch further.
Through his attorneys he wrote to every English language news organisation in Malta with a ‘.com’ website, demanding that any story ever published about Pilatus Bank in the aftermath of Daphne’s revelations be deleted and expunged from the online record.
The legal letters from Lawrence Law Group of Wisconsin Avenue, Washington DC, were accompanied by the threat, unusual for Maltese news organisations, that if they failed to comply, the bank would open multi-million dollar lawsuits against them in the US where their .com websites were registered. Attempting to respond to such lawsuits in an US court would financially cripple the cash-strapped Maltese organisations, let alone contesting them.
Ali Sadr liked firing off letters from fancy law firms to pesky journalists. In January 2018, co-author John Sweeney, then working for BBC Newsnight, got a letter from Schillings, a very expensive London law firm specialising in libel. Its client was Pilatus Bank and the letter complained that points ‘Mr Sweeney now raises are demonstrably false, which the most cursory of online searches would have revealed …’ It goes on to refer to a previous letter which gave notice of the ‘true position’ and repeated ‘the obvious and demonstrable falsity of Mr Sweeney’s new points’.
Oh dear.
The Maltese press community had also just been introduced to SLAPP lawsuits. SLAPP is an Americanism and stands for Strategic Lawsuits Against Public Participation, in other words libel tourism where wealthy corporations look for aggressive jurisdictions where they can file ruinous defamation suits. The threat of such a lawsuit is often a sufficient deterrent to prevent a story from being published, or have it retracted.
Although several jurisdictions have legislation to protect their journalists from this corporate vindictiveness, the Maltese government refused to back a private members’ bill filed in Malta’s parliament by Nationalist MP Jason Azzopardi. The government argued that the bill would be contrary to Malta’s international obligations.
When that failed, Nationalist MEP David Casa lobbied the European Parliament to introduce legislation against SLAPP. That process continues.
But, in October 2017, Maltese newspapers faced the choice between certain bankruptcy or doing Ali Sadr’s bidding. Reluctantly, reports about Pilatus Bank were pulled, including the detailed interview Maria Efimova had placed on record, testifying to what she had witnessed at Pilatus Bank.
The sense of danger for a whistleblower increases when, after having spoken out, her message is silenced.
As it happened, Ali Sadr never threatened Daphne with legal action in the US if she did not remove her stories. Instead, without warning, he started proceedings in Arizona where the URL of her website daphnecaruanagalizia.com was registered. He demanded $40 million in damages from Daphne and the removal of her stories about him from the record.
Weirdly, Ali Sadr and Pilatus Bank did not alert Daphne to their Arizona case. She was unaware of it at the time she was murdered.
But Daphne’s execution did not stop the effort to smoke Maria Efimova out of hiding.
In a January 2018 interview with co-author Manuel Delia, Maria Efimova said her father in Russia had received visits from people enquiring whether it was true his wife had died, a claim Maria Efimova had made in her request to have her passport returned. Maria suspected that the visits were from private detectives but she did not know who they were working for. The pressure on her and on her father in Russia was all too real.
Maria Efimova’s father received a second visit, this time from Russian police claiming they were looking for his daughter at the request of the authorities in Cyprus, where Maria Efimova had been living four years earlier, before she moved to Ireland and then to Malta. She had worked for a Russian jewellery company in Cyprus and this company was now making allegations that she had defrauded the business.
On 18 January 2018 the Cyprus Business Mail reported that Cyprus had issued an international arrest warrant for Maria Efimova on a complaint that was unrelated to Malta’s original warrant.
The next day, Cyprus news websites SigmaLive.com, Offsite.com.cy, Kathimerini.com.cy, and 24sports.com.cy reported that Maria Efimova was wanted as a suspect in the killing of Daphne Caruana Galizia. That may have been the result of a chain of ghastly misunderstandings but Cypriot journalist Stelios Orphanides, then working for the Cyprus Business Mail told co-author Manuel Delia ‘some Cypriot media are owned by people with agendas, some of whom are corrupt, who are not interested in necessarily employing adequately qualified journalists’.
Stelios Orphanides filed a complaint before the media complaints commission in Cyprus. It found that claiming Maria Efimova was wanted for murder was not just a horrible mistake. The story was false and intended to discredit her as a whistleblower and reduce the significance of the evidence she had given against Malta’s prime minister.
Someone had provided fake news to the Cyprus media. And some of them had gobbled it up.
Cyprus’s arrest warrant issued in January 2018 was on the back of a complaint filed by her former Russian employer who found out, some four years after the fact, that Maria Efimova had cheated him of about €40,000. She denies this, and questions why the complaint took four years to surface. At the time of writing, the issue is still unresolved.
The fake news stories alleging that Maria was in some way responsible for Daphne’s murder suggests there was an effort to bring her out of hiding. People who had checked she was not with her father in Russia may have assumed she had returned to Cyprus, her husband’s native country.
In March 2018, it became known that Maria Efimova was in Crete.
On 21 March 2018, Maria Efimova travelled from Crete to Athens and handed herself in to the police. She was booked and eventually transferred to an Athens prison where she spent 15 days behind bars, waiting for an extradition hearing.
But, on that same day, half way around the world in Washington DC, the sound of rolling metal bars shutting rudely would ring in someone else’s ears.
Ali Sadr Hashemi Nejad was arrested at Dulles airport in DC, on his way out of the US. The attorney for the Southern District of New York charged Ali Sadr with six counts of bank fraud and busting sanctions against Iran. If convicted, Ali Sadr faces 125 years in prison.
Ali Sadr Hashemi Nejad denies any wrongdoing.
The charges themselves do not relate to Pilatus Bank but to alleged actions before he opened his Maltese-European bank.
The US public prosecutor has remarked in pre-trial proceedings that Pilatus Bank is effectively a money-laundering exercise, as it has been funded from the proceeds of other crimes.
The European Central Bank eventually shut down Pilatus Bank and withdrew its licence to operate.
But before that happened, while under administration, Pilatus Bank was found guilty by a Maltese court of employing Maria Efimova without paying her. The government-appointed administrator issued a cheque in her name to compensate her for the complaint that had started all the trouble.
Even though Pilatus Bank no longer exists, the Maltese police have kept open their request for the arrest of Maria Efimova so she can face charges that she cheated the bank of less than €2,000.
After 15 days in an Athens prison, a Greek court heard arguments for Malta’s request for Maria Efimova’s extradition. Europ
ean Union countries are treaty-bound to facilitate mutual extradition requests. It is a rare event indeed for an EU court to refuse the request for extradition from another EU country’s police force.
This would be one such rare event. The Greek court denied Malta’s request, fearing for the safety of Maria Efimova’s life should she be forced to return to Malta. The Maltese authorities insisted on an appeal, which was also turned down.
Maria Efimova, the whistleblower, and Daphne Caruana Galizia, the journalist, had brought down Pilatus Bank, the bank that cashed the dirty cheques of the Azerbaijani regime.
Joseph Muscat survived the Egrant scandal. But journalism alone had achieved what no Maltese enforcement agency would even attempt to do: challenge the viscous flow of dirty money from Baku to Malta and onwards to the rest of the world.
GAMBLING ON PANAMA
Down these mean streets a man must go who is a member of the Institute of Chartered Accountants. Our apologies to Raymond Chandler, but the image is irresistible.
Brian Tonna was the accountant who sat one office down from the prime minister in Malta. His Nexia BT firm was a minor operation before the March 2013 election. This was all set to change. His junior partner, Karl Cini, flew to Panama City in February 2013 in the thick of the electoral campaign as a guest of Mossack Fonseca. He struck up a relationship with the law firm that would help his clients organise themselves financially once they attained power.
A key issue in the electoral campaign was the cost of energy for domestic consumers. The PL sent out two messages before the election. The first and more important message was that the government-in-waiting knew just what it had to do to rejig Malta’s energy supply and therefore cut the cost of energy for consumers. The second message was that the PL was clean. It certainly did not sign back-room deals.
Malta is a small country and, although under EU rules there can be no monopoly in the generation of electricity, the inescapable reality is that in Malta there’s only space for one supplier.