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MaltaToday 4 June 2017

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maltatoday, SUNDAY, 4 JUNE 2017 17 News started in Panama Nexia BT started the paperwork on the companies then…), and looking for an international bank account, the intention could have been to deposit monies from these types of transactions, with Dubai as the possible centre of finance, Panama hiding the true owner- ship, and the New Zealand trust collecting the monies. This theory is perhaps reinforced by another FIAU report in which Schembri, a long-time supplier of newsprint to Allied Newspapers, was found depositing consider- able sums of cash – commissions, consultancy fees, whatever… – to an investment account in the name of Allied Group's Adrian Hillman. Opposition leader Simon Busut- til, who took this FIAU report to a magistrate, claimed Schembri was paying money into investment ac- counts to launder what was effec- tively a series of bribes. It was already known in 2016 through the Panama Papers, that Schembri, Hillman and another contractor who worked on Allied Group's new Progress Press head- quarters, had created three Cypriot companies connected to a British Virgin Islands offshore company. Those revelations led to the res- ignation of Hillman from manag- ing director of the Allied Group, and then an internal inquiry by the company, whose findings were never published. Hillman said both sides reached an out-of-court set- tlement. But it is clear that passing money through a Byzantine network of offshore companies, had been a modus operandi of the protagonists of this sordid story. Added to that were the other al- legations that Brian Tonna would have passed on a €100,000 payment into Schembri's Pilatus Bank ac- count from his own BVI company Willerby Trade: a company which he was actually using to receive fees from successful applicants for the Individual Investor Programme, so that the money flows out of the country. Why did Tonna's Willerby Trade pay Schembri €100,000 soon after having collected fees from three successful Russian appli- cants? Schembri says he was being paid back for a 2012 loan he made to Tonna, at the time undergo- ing separation proceedings. A loan agreement was supplied, but the FIAU seemed convinced this could have been a bogus loan. In any case, it asked the police to investigate. The FIAU reports became in- strumental in understanding why Schembri was using offshore com- panies and a private bank, allowing him to conduct business in a way that could keep him below the radar of other domestic banks. Schembri has always denied any accusation of wrongdoing, opening multiple libel suits against his accusers, and de- claring himself ready to cooperate with the magisterial inquiries that the FIAU reports had precipitated. But ultimately, the narrative had already been built. The FIAU, itself bound by secrecy with its opera- tions not even made known to its trustees, the Attorney General him- self, had actually carried out its job and supplied its report to the po- lice. After Michael Cassar's resigna- tion in June 2016, ostensibly a week after the first FIAU report landed on his lap, did police carry out an investigation? Acting Commis- sioner of Police Lawrence Cutajar, widely derided as a Labour stooge, has steadfastly refused to confirm what action the police has taken. Within this institutional stroke however, it turned out that Mal- ta's judiciary would take centre- stage, ironically by the hand of the most unverified and clamor- ous of allegations and on request of the accused himself, the Prime Minister. It came with the allegation by La- bour bête noire Daphne Caruana Galizia that a third, mysterious off- shore company, Egrant, belonged to Joseph Muscat's wife Michelle. She also claimed that the daugh- ter of Azerbaijani ruler Ilham Ali- yev had wired $1 million to some Dubai account for the Muscats, through Pilatus Bank. The bank denied that the Muscats were cli- ents. The PM filed a complaint to the Commissioner of Police so that a magisterial inquiry takes place. The inquiry is still ongoing, but up until going to print, an alleged dec- laration of trust that was supposed to show Michelle Muscat was the beneficial owner of Egrant, has never been published. The Egrant allegation led to Bu- suttil calling his party to protest in the streets against corruption. Muscat then tied his political fate to the outcome of the inquiry, but Busuttil refused to commit himself to resign if the alleged 'calumny' turned out to have been just that. As soon as Muscat called the snap election, Busuttil took ownership of new, damning revelations in the FIAU reports that targeted Pilatus Bank, the €100,000 passport kick- back, and the payments Schembri paid to Hillman's MFSP invest- ment accounts. The Malta Independent fired the last shot with excerpts of what is supposed to be an unconcluded FIAU investigation that would link Mizzi's and Schembri's Panama companies to a transaction carried out by Orion Engineering, whose owner is also company secretary of Armada Gas Floating Services. But Mario Pullicino, the owner, has de- nied the allegation. By keeping his beleaguered chief of staff by his side, Joseph Muscat proved that Keith Schembri (first left) was more important than any other consideration on good governance. But at the same time, Muscat and his wife Michelle were fighting another clamorous allegation which, at the time of going to print, had been left unverified by those who accused him Throughout 2016, Panama became a taut affair which brought into question the entire Labour government's future

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