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maltatoday WEDNESDAY 2 MAY 2018 Analysis 6 Five new things we have learned The Daphne Project JAMES DEBONO delves into the implications of five new things we have learned thanks to the Daphne Project – an international collaboration of 45 journalists and 18 news organisations Prime Minister Joseph Mus- cat has dismissed the Daphne Project revelations as a series of "recycled stories". Probably he is banking on the information overload prior to the 2017 general election. Since all these ingredi- ents had featured in last year's news cycle, any further revela- tions linked to 17 Black, Keith Schembri's and Konrad Mizzi's Panama companies, Azeri inter- ests in Malta and suspicious ac- tivities involving PEPs in Pilatus Bank can easily be perceived by Maltese readers as yesterday's news. However, the Daphne Project's stories had to be packaged, con- textualised and explained to an international audience, which is not familiar with the Maltese news cycle. Many Maltese tend to forget that these stories are being written for a global and not for a Maltese audience. In the absence of background information these stories would be incomprehensi- ble for the international reader. This explains why most stories include a great deal of "recycled" information. Even for the Mal- tese reader any new information, especially that related to offshore companies, only makes sense when put into a context of previ- ously published stories. Yet there have been five sig- nificant new facts which we did not know before and which have emerged thanks to this interna- tional project. Fact 1 Fact 2 Fact 3 17 Black was a target client of Schembri and Mizzi Brian Tonna was on LNG selection board Malta is buying electricity from Socar at €9.40 per unit 17 Black – a Dubai-registered company – was named as a "tar- get client" of the Panama compa- nies set up for Keith Schembri and Konrad Mizzi. Leaked extracts from a Financial Intelligence Analysis Unit (FIAU) report had previously established the trans- fer of money from a company connected to Armada Floating Gas Services Malta, owners of the LNG tanker berthed in Mar- saxlokk, to 17 Black. The implications This latest revelation from the Daphne Project was not a simple rehash of the stories regarding the mysterious Dubai company 17 Black, whose existence was first revealed in one of Caruana Galizia's most cryptic posts and which was mentioned again days before the 2017 election cam- paign when extracts of the FIAU report were leaked. The latest story amounts to a confirma- tion, in black on white, that the company was going to be a cli- ent of Konrad Mizzi and Keith Schembri's Panama companies. But more revealing was Schem- bri's reaction to the story. His immediate confirmation that 17 Black had been included in "a draft business plan" for his Pan- ama company contrasted with the impression previously given that he knew nothing about 17 Black. Back in 2017, while de- nying the kickback allegations, Schembri had not acknowledged the existence of 17 Black de- scribing the whole matter as a "fabrication" which "is nothing short of criminal." The new information on 17 Black establishes a link between the company engaged in suspi- cious payments involving the owners of the LNG tanker and Konrad Mizzi and Keith Schem- bri. The PM's line of defence so far has been that he does not com- ment on 17 Black not to preju- dice pending magisterial inquir- ies, which were only commenced following reports by former PN leader Simon Busuttil. Muscat was far less concerned with prejudicing the only in- quiry called by himself, the one investigating Egrant allegations, which he has described as the "greatest political lie in history". This suggests a two weight, two measures approach in the PM's reaction. A freedom of information request by the Times of Malta on behalf of the Daphne Project, revealed that Nexia BT managing partner Brian Tonna sat on the Enemalta selec- tion committee handling the new project, along with three other staff members from the same financial services firm. The government had previously refused to reveal the names of the selection board. The implications Brian Tonna's role in adjudicating an international call for the selection of a power plant confirms the clout this company enjoys in government circles. The fact that a firm engaged by Mizzi and Schembri on a personal level to set up their Panama companies also had a say in major pub- lic decisions is indicative of how blurred the lines between public and personal interests have become under Muscat's government. Nexia BT literally had a finger in the pie in too many projects ranging from a direct order for a study on public conveniences and its role in assessing the social impact of Sadeen Group's American University of Malta. The fact that it had a role in choosing the preferred energy bidder suggests that this role was not merely advisory but also one which impinged directly on decision making. The Daphne Project, which has access to over 680,000 leaked documents, also estab- lished that the price at which Enemalta and Electrogas buy gas from Socar is fixed at €9.40 per unit for five years, until April 2022. This information had been blacked out when the contract was tabled in parlia- ment. The implications The story suggests that Azeri owned SOCAR made a €40 million profit by buying gas from Shell and selling to gov- ernment at a higher price did raise concern of international energy experts. But as the Guardian report confirms at the time when signing the agreement, Malta could not have foreseen the sustained oil and gas price crash that has made its deal with Socar look like poor val- ue. What may have been most awkward in this case is the failure on the government's part to seek a price cut from its supplier in the same way as Lithuania did with its LNG provider Statoil. Moreover the €9.4 cents per unit price was not entirely surprising. Before the general election Labour had already announced that its energy plan hinged on a plan to reduce the price of electricity from 18 cents per unit to €9.6 cents. The fact that opinion sur- veys show that energy tariffs are no longer a major concern as was the case before 2013, also makes it difficult for the revelations to trigger popular anger. While pre-2013 corruption revelations related to Enemal- ta came in a context of rising prices, the "convoluted chain" which sees Socar profiting as an intermediary came in the context of decreased tariffs.