Schembri: bribery suggestions ‘malicious’

The Prime Minister’s chief of staff, Keith Schembri, issued an emphatic rebuttal of suggestions put to him by MaltaToday that an offshore Panamanian firm he owns was opening him up to suggestions that such a vehicle could be used to receive income from undisclosed sources, such as bribes.

Schembri confirmed the existence of the offshore company in Panama, as well as a trust in New Zealand, but has declined from furnishing any details on the offshore set-up.

Schembri had a long career in his family’s private business group Kasco, before joining Joseph Muscat to manage Labour’s electoral campaign and finally becoming chief of staff in March 2013 – one of the most important positions in the government.

But as the man who has the prime minister’s ear, Schembri shot down suggestions by this newspaper that his offshore vehicle also gave rise to questions on Muscat himself.

“There is a marked difference between speculation and facts, and your insinuations are malicious and untruthful,” Schembri told MaltaToday.

Energy and Health minister Konrad Mizzi has declared he will close down an offshore company in Panama, Hearnville Inc., which was set up for him by a firm related to Mossack Fonseca, a legal firm in Panama that has attracted notoriety for clients associated with money laundering and dirty cash.

Panama was until recently on a European Commission blacklist for tax havens, since 1927 having amassed a redoubtable collection of banking secrecy laws that give company owners confidentiality, hiding behind complex business structures and nominee directors.

Mizzi’s Panamanian firm is owned by another company, Orion Trust Ltd, which acts as the trustee for his New Zealand trust, Rotorua. The minister has said he will submit his Panamanian firm to an audit before dissolving it.

But Keith Schembri rejected suggestions that such a vehicle opened him up to speculation that it could be used to receive funds that remain undisclosed to the authorities.

“I don’t see any relevance between my business group’s foreign companies, which have been part of the group for a number of years, and my role as chief of staff. Your insinuations are completely unfounded and malicious.

“I have already stated that I will present a statement from the trustees of the New Zealand trust, and that the trust has no other assets other than an empty company in Panama. But the group and its companies have been audited according to Maltese law since inception.”

On Sunday, Schembri admitted holding a New Zealand trust, as well as an attached company that was opened “as a contingency upon advice from my financial advisors” over the possibility of local banks changing their business model or transferring their trust business to third parties.

Schembri was referring to HSBC’s and Bank of Valletta’s decision to move out of the trust business and transfer their divisions to legal and financial services firms.

“After taking up my current job, I stepped down from directorships on my companies and consolidated my structures by opening a family trust both locally and abroad,” Schembri said. “Over these two decades my interests have always been fully audited. I own and have interests in a number of businesses, both locally and abroad. The group and my family also own real estate.”

The Nationalist Party has criticised Schembri for not saying when he set up the company, whether it was on the same day that Konrad Mizzi set up his and whether it was “at the same time when together with the Prime Minister, they had gone to Azerbaijan behind the people’s back.”

Opposition leader Simon Busuttil will lead an “anti-corruption protest” organised by his party at Castille Place on Sunday.