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12 NEWS maltatoday | SUNDAY • 21 JULY 2024 MATTHEW VELLA mvella@mediatoday.com.mt Dalligate redux: OLAF's lax probity AS in all matters dealing with John Dalli, even the evident shortcom- ings of the infamous OLAF inves- tigation – widely seen as the pre- text for Barroso to oust him from office, allegedly at the behest of Big Tobacco – often fail to give the former commissioner a clean bill of health. Like so many politicians of his time, the finance minister from Qormi balanced his considerable popularity with allegations, some whispered, others not, of impro- priety. At his apex, he made a bid for PN leader in 2004, losing to Lawrence Gonzi. A year later, the new prime minister was asking him to resign after the police re- ceived allegations that Dalli was taking kickbacks on the new na- tional hospital construction con- tract. The allegations turned out to be a fabrication by a former police officer posing as a private investigator, who would later be convicted. Just ahead of Gonzi's 2008 re-election, Dalli was 'reha- bilitated', and soon made foreign minister. Then two years later, Gonzi kicked him upstairs when the self-styled 'father confessor' to errant MPs started making moves yet again. But even in his Brussels sojourn, as in Malta, Dalli always seemed to be occupied with side-gigs that – unbeknown to all – betrayed his inability to ward off any conflicts of interest. It only became known in 2013, a year after he had resigned follow- ing the OLAF report, that he had taken a Bahamas 'holiday' to meet a group of American, Christian investors, together with his daugh- ter. The central antagonist was a con-woman, Marie Eloise Corbin Klein, who employed Dalli's cor- porate services via his two daugh- ters. Posing as a Christian mission- ary, Klein, 75, convinced a group of Americans to invest $600,000 in an African mining project. The FBI, investigating the fraud, called it a Ponzi scheme, with the cash – $600,000 – going to two Maltese companies, Tyre Ltd and Corporate Group, owned by Lou- ise Dalli and Claire Gauci Borda. Dalli himself has always denied any wrongdoing, even though his two daughters are now still facing charges of money laundering and misappropriation of funds in con- nection with the FBI investigation. Then in 2021, the ICIJ leak of secret offshore companies in the Pandora Papers revealed that Dalli had since 2006 owned a BVI com- pany, Westmead Overseas. Dalli never declared its existence to the House of Representatives or when he was appointed European Com- missioner. Dalli's daughters later took over as the company's direc- tors before it was struck off from the BVI registry in 2013. This reputation for lax probity haunts Dalli, even while having as- siduously protested his innocence in the OLAF investigation, which even back in 2012 smacked of seri- ous errors of judgement in the way it was marshalled by its chief, the Italian prosecutor Giovanni Kess- ler. Shortcomings of OLAF investigation The serious shortcomings of the four-month investigation, en- dorsed though they were by Mal- tese police who pressed charges against Zammit first in 2012, then belatedly against Dalli in 2021, to- day appear as a charade of Europe- an standards. OLAF firstly instructed its Mal- tese liaison, the Prime Minister's internal audit unit (IAID) to ques- tion Silvio Zammit, who was cor- ralled into an interrogation with an apparent lack of due process. Zammit was first given less than 24 hours' notice to attend the grill- ing, breaching OLAF's minimum 10 working days' notice as laid in EU regulations. But then Kessler suspiciously 'extended' what was an internal OLAF investigation into an ex- ternal investigation on EU funds, because OLAF rules do not allow officials to conduct interviews out- side the EU institutions. In order to fly down to Malta to personal- ly interrogate Silvio Zammit, he contrived an investigation on EU funds that concerned Zammit, then Sliema's deputy mayor, and his business. To do this, he had to convince OLAF's internal re- view unit, the ISRU, which later declared that the investigations' extension was "doubtful" and had "very limited evidence" of what fi- nancial interests were affected to justify the spot-check at Zammit's business premise. Despite the flimsy grounds, the ISRU still pro- ceeded to grant the extension, giv- ing Kessler the go-ahead to rope in the OPM's IAID. Controversially, Kessler and two aides decided to intercept Swedish Match lobbyist Gayle Kimberley during a business trip in Portu- gal for her employer, the Malta Gaming Authority. As described by Kimberley, whom Kessler later wanted police to prosecute, she was "ambushed" by Kessler and asked to be questioned in their room. "There were three of them," she said. "They said 'we are here from Brussels and if you do not cooperate you know what will happen. You are a public officer… you are being interrogated as a witness'." Questioned by Kessler without any legal assistance, Kimberley said OLAF's men showed an over- bearing demeanour, demanding to see her computer's files over the course of a six-hour meeting. And then, after his hard-nose grilling, she was taken out for an informal dinner with Kessler, where she ac- cepted some wine. When MEPs in the European Parliament learnt of the way OLAF was carrying out its investigations, calls for an audit in- to Dalligate rang out. The agency's supervisory com- mittee was tasked to analyse the investigation. It found that OLAF's requests for Maltese phone re- cords, as well as its instigation of Estoc to secretly record Silvio Zammit, had not been lawful. OLAF's own internal review unit had not carried out proper veri- fication of the legal grounds for Kessler's requests for the phone records which he used as the "unambiguous circumstantial ev- idence" of the link between John Dalli and Zammit's bribe request from Estoc. Dalli did find a phalanx of MEPs backing him: some like French Green MEP José Bove suspected a Big Tobacco conspiracy behind Barroso, a saga recently immortal- ised in a French movie released this year; others like German EPP MEP Ingeborg Graessle, rued OLAF's overweening powers. Anti-corpo- rate watchdogs believed Dalli had been entrapped over the review of the powerful Tobacco Products Directive he wanted pushed. Additionally, in a recording – this time lawful – of a conversa- tion between Bove and Swedish Match officials, it turns out that the company had been aware that Gayle Kimberley had lied to them about an alleged meeting she had had with Dalli. No, the meeting in which Dalli would have dis- cussed a request for money never happened. But then Silvio Zam- mit had already had a phone-call with Kimberley's boss in Swedish Match where he suggested a hefty €60 million bribe – and it was at that point that Swedish Match and Estoc took their complaint to the EC. And they did this by engaging a John Dalli reappears, to toast former OLAF chief Giovanni Kessler's conviction on an illegal wiretap. But Dalligate never seems to end… John Dalli