Same sameness, different difference …

There is a certain predictability about the way all local controversies tend to fizzle out sooner or later. And it usually starts with the realisation that the people shouting ‘scandal’ the loudest, are actually the ones with their arms thrust deepest into the trough.

The Panama Papers turned out to be no different in the end. But let us briefly return to where it all began – i.e., the revelations that Energy Minister Konrad Mizzi and OPM chief of staff Keith Schembri had opened a shell company in Panama, a notorious tax haven.

Judging by the immediate reactions, you’d think countless people in this country were genuinely scandalised. And I suppose some people genuinely were. (We got an indication of approximately how many from the turnout at last Saturday’s civil society protest.)

They were perfectly right, too … for all the reasons that have been repeated endlessly in the media for the past few months. But apart from ‘shame’, ‘outrage’, ‘disillusionment’ and all that, the word ‘scandal’ also implies ‘shock’… or at the very least, ‘surprise’. You can only ever be ‘scandalised’ by something you didn’t really know was going on. And you certainly can’t be ‘scandalised’ by a practice you have resorted to yourself … and/or assisted others in doing.

Well, that’s precisely the trouble. Since Monday, the case for ‘genuine scandal’ at Mizzi and Schembri’s Panama connections has started to look a little thin. The International Consortium of Investigative Journalists has now published the full list of companies with known Panama connections … and before even going into the names that have emerged locally, just look for a moment at the number.

Seven hundred and fourteen. On an island which could fit quite comfortably in Manhattan’s Central Park, there are 714 companies which have parked their assets in tax havens such as Panama, the British Virgin Islands, etc. You know, all the stuff we’ve been swooning in horror about for weeks…

And on top of that, it turns out a further 49 Maltese legal firms also act as intermediaries for local and international companies seeking to do the same. All this has been going on uninterruptedly since the late 1970s at least.

Meanwhile, the list of associated names reads like a Who’s Who of Malta’s entire business community. Among the 49 legal firms are Malta’s most reputed (and politically well-connected) … all seeking to assist others in doing what is elsewhere described as ‘scandalous’ and ‘corrupt’. And it turns out that Nexia BT, the company handling Mizzi’s overseas interests – is by no means even the most active of the lot.

What really emerges from the Panama Papers, then, is even more scandalous than the revelations concerning Mizzi and Schembri. It seems as though the entire elite of Malta’s business and legal communities has for decades made an entire industry out of hiding assets in tax havens. They have either hid their own, or conspired to hide the assets of others. Like so many other things we pretend to be ‘shocked’ at from time to time, it turns out to be just another dirty little national secret to add to the rest. Something we all knew about, yet chose to look the other way…

Ah, but that’s not quite how it was portrayed until very recently in the press... even though, now that full implications are beginning to sink in, I have detected a small but significant shift in tone in ‘Panamagate’ reporting of late.

At first – i.e., when still only limited to Mizzi and Schembri – there was an unmistakable tone of indignation and urgency underlying all discussion on the subject. Now? Not so much… 

Consider the following extract from a Times report about the Monday leak… which just happened to also contain the name of a director of Allied Newspapers (which owns the same newspaper): 

“It is important to note that being listed on the database is not an indication of criminal activity. Intermediaries, which can include banks, law firms or accountants, serve as middle men in the process of setting up an offshore company… 

Got that, folks? Suddenly, it is “important to note” that none of this ‘scandalous’ stuff is actually illegal. How strange, though, that they felt the need to point this out… when that is precisely what Konrad Mizzi has been repeating in his defence from the very start.

In Mizzi’s case, the retort has always been the same (and always equally justified). Who cares if it’s not illegal? The entire financial arrangement was designed to make the source and size of Mizzi’s assets untraceable, thanks to the secrecy of Panamanian tax laws. That is, in fact, the only reason one would want to open a company there in the first place... 

How many times have we heard that line now – in articles, in speeches at public protests, in Facebook comments… everywhere? Well, not anymore. Now, newspapers go to extraordinary lengths to explain that… hey, not EVERYONE who uses Panama’s secretive tax jurisdiction necessarily has something to hide. Some do it just to take an occasional dip in the canal… 

Of course, you will have lost no time working out why the sudden decision to tone down the gravity of tax evasion in dodgy jurisdictions. The above quote itself leads to the answer quite nicely. The next sentence reads: “…Malta-listed intermediaries include FZD – Trustee & Fiduciary Services Limited, previously linked to Nationalist MP Francis Zammit Dimech and EMD, a financial services firm where Richard Cachia Caruana, who served as Malta's Permanent Representative to the EU in the previous legislature, is a consultant…”

And of course, the damage-limitation trolls are already out in full force. Don’t conflate issues, they tell us online. There is a difference between helping others to open a Panama account/company, and being a direct beneficiary of that same account/company yourself.

Which, I hasten to add, is perfectly true… there is a difference. It’s roughly the same difference that exists between a bank robber and his getaway driver. One robs the bank, the other helps him get away with it. There, see? Not the same thing at all…

Oh, dear. I guess it will probably take these people a while to realise how utterly ridiculous that position actually sounds. But just to hasten the process slightly: I suggest they look at their own arguments when Mizzi tried to make a similar distinction in his own defence.

If you depart from the premise (as we all rightly did in the case of Mizzi) that ‘attempting to hide one’s assets from public scrutiny’ is by definition morally wrong, regardless of whether it’s illegal or not… then the same applies to helping others do the same. The only thing that changes is the degree of involvement in the immoral (albeit legal) act. If it really were a crime, it would be the difference between ‘perpetrator’ and ‘accomplice’. Nothing more, nothing less.

The truly fascinating thing, however, is that both Francis Zammit Dimech and Richard Cachia Caruana seem to agree with me on this point. During the recent debate on the confidence motion against Mizzi (i.e., before we got to know of his own involvement) Zammit Dimech argued that: “… even if the government was doing good work, it did not justify the opening of secret companies and accounts abroad.”

Yes, indeed. No amount of ‘good work’ can justify a practice that Francis Zammi Dimech’s own law firm has made a tonne of money from in the past… even if only by helping others circumvent international fiscal scrutiny, instead of doing it themselves.

As for Cachia Caruana, he was even quicker on the draw. Long before the motion was tabled, he declared that ‘Under Eddie Fenech Adami, Mizzi and Schembri wouldn’t have lasted five minutes…”

With everything that’s coming out now, it might be worth revisiting that little claim. Another Nationalist bigwig appearing in the Panama Papers (and this time, we knew well beforehand) is Ninu Zammit: who held over three million euros in an HSBC Switzerland account he opened in 2005, and later transferred to the British Virgin Islands.

As I recall, Eddie Fenech Adami took a lot longer than five minutes to get rid of Ninu Zammit. In fact, he never got rid of him at all...

OK, fair enough. It is perfectly possible (indeed, likely) that Eddie was simply unaware of Ninu’s secret overseas holdings. But if true… what does it tell us about the real difference between the two parties on this issue?

It tells me that the only thing really setting them apart is that one party got caught, and the other didn’t. And like the difference between the bank robber and his getaway driver… it doesn’t amount to all that much, now does it?