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Disbelief as inquiry hears how Keith Schembri and Konrad Mizzi were never summoned by police
Judge in Caruana Galizia public inquiry chides former head of police economic crimes unit for not summoning Keith Schembri, Konrad Mizzi: ‘We seem to be living in a parallel universe’
1 July 2020, 9:21am
Matthew Agius
Matthew Agius
3 min read
Two large banners in Bidnija mark the exact spot in a field, where Daphne Caruana Galizia's burning car stopped
A judge expressed disbelief that Keith Schembri and Konrad Mizzi were never summoned by police for questioning despite being linked to various cases of alleged money laundering.
Judge Abigail Lofaro, a member on the public inquiry board looking into the murder of Daphne Caruana Galizia, had a go at Assistant Police Commissioner Ian Abdilla when he took the witness this morning.
Abdilla headed the Economic Crimes Unit until last week when he was replaced by the new police commissioner.
Testifying in the inquiry, Abdilla said he never sent for Schembri, resting on the fact that the former chief of staff to prime minister Joseph Muscat had been summoned to testify in the Egrant magisterial inquiry.
Abdilla was being questioned about the police investigation into Pilatus Bank and the fact that Schembri had an account there.
But Lofaro would have nothing of his testimony: “Did a magistrate tell you not to summon Keith Schembri? Yes or no?”
Abdilla replied in the negative, insisting that because of the rules of disclosure, the instructions he always gave were for people not to be summoned for questioning unless there was enough evidence.
At another point in his testimony, while answering about police investigations into 17 Black and the fact that the media had arrived at certain facts before the police, Abdilla said the police had to follow protocols and procedures.
He was again asked by Lofaro why he hadn't sent for Schembri and Mizzi, whose Panama companies had 17 Black listed as a target client.
The judge shook her head and the following exchange happened:
Judge: “We seem to be living in a parallel universe.”
Abdilla: “Ma tifhimx sinjura… (You don’t understand, madam)”
Judge: “Ma nifhimx... imma m’inix injoranta u m’intix ser tgħallimni int. (I don’t understand… but I am not ignorant and you are not going to teach me things).”
Karl Cini investigation almost concluded
Abdilla testified that an investigation for perjury against Nexia BT’s Karl Cini, requested by Magistrate Aaron Bugeja, who led the Egrant inquiry, was almost concluded.
He also testified that investigations into the allegation that money from Azerbaijan had passed through Pilatus Bank for Egrant were never proven.
“The Egrant inquiry involved, among other things, gathering all the journalist's writings on the issue. We didn't find the transaction and couldn't trace it at all... there was nothing that was close to this allegation. At the time, Azerbaijan did not even have a functional FIAU. We tried to investigate any truth in that report and analysed everything. But we found nothing at all,” Abdilla said.
The public inquiry into the murder of Daphne Caruana Galizia is tasked, among other things, with determining whether the State did all it could to prevent the murder from happening.
In the last sitting Inspector Kurt Zahra, who formed part of the murder investigation, testified that during his arrest at police depot, suspect Yorgen Fenech had said he knew about the June 2017 election seven months earlier.
In the sitting before that, a technical analysis of the geolocation data for Chris Cardona's mobile phone could not conclude with precision whether the former minister was at a conference or a brothel, while in Germany in January 2017.
The expert only had information from one cell tower which was close to the German city of Essen, where the conference had taken place.
The inquiry is led by retired judge Michael Mallia, former chief justice Joseph Said Pullicino and Judge Abigail Lofaro.
11:38 This live blog will end here. Thank you for following.
Kurt Sansone
11:28 The sitting will continue behind closed doors.
Kurt Sansone
11:28 Asked whether he had been instructed to close an eye to this, Abdilla replies: “Absolutely not.”
Kurt Sansone
11:28 Abdilla: “Not ignore, you must be aware of this. But you'd have to be following it [the blog] all the time.”
Kurt Sansone
11:27 Azzopardi: “One of the largest stories of Daphne Caruana Galizia in 2017 was that of the contraband cigarettes, which required an organised criminal network. That you have a journalist in our country who repeatedly mention names and that one had gone abroad with a tax official. Do the police ignore this?”
Kurt Sansone
11:26 Abdilla: “You have to walk in my shoes... elderly pensioners being defrauded, sometimes I get PQs on why investigations are closed.”
Kurt Sansone
11:25 Judge Lofaro says the explanation didn't wash with her.
Kurt Sansone
11:25 Abdilla: “In 2016 we had much bigger cases which hadn't emerged in the media... like that involving Portman Consultants. They passed nearly €520 million through banks, including €120 million through Pilatus Bank. The Swedish pension scheme case took nearly three months. We have nearly 100 cases every three months.”
Kurt Sansone
11:23 Abdilla says that for many years he wasn't happy with the resources the ECU had to meet the demands on it. “It was this last year that everyone started to appreciate and listen,” he adds.
Kurt Sansone
11:17 Abdilla: “Normally, when there is something not administrative in nature, the auditor always refers it through the Commissioner of Police... in this case it didn't. In my job I cannot follow every report.”
Kurt Sansone
11:16 Abdilla: “Normally, the report would specify if the police needed to take steps. I don't believe this happened.”
Kurt Sansone
11:16 Azzopardi: “Had the police felt the need to investigate what was in the Auditor General's report on the ITS deal?”
Kurt Sansone
11:15 Abdilla: “To be honest, I wasn't aware of this. DB group qatt ma stajt naqbad art.”
Kurt Sansone
11:14 Azzopardi makes a final question to Abdilla: “Daphne Caruana Galizia wrote several posts and scrutinised the takeover of the former ITS site by the DB group and made reference to contraband activities by the owner. Debono had gone abroad to buy a Maserati and had taken a high ranking official of the customs department with him, she had said.”
Kurt Sansone
11:13 Abdilla says he does not know how Valletta knew that Yorgen was not there on the day that he was going to question him.
Kurt Sansone
11:12 Abdilla: “I never knew Fenech personally. I never spoke to him or exchanged phone calls or messages. The relationship between Valletta and Yorgen, we heard it on recordings shortly before it came out on the media.”
Kurt Sansone
11:11 Abdilla is asked who took the decision not to interview Fenech at the depot. “It is possibly his... Valletta's,” he replies.
Kurt Sansone
11:10 Abdilla says that Valletta had called him up to tell him that Yorgen Fenech was not there. “I had discussed the visit with Valletta as my direct superior,” he adds.
Kurt Sansone
11:09 He is asked again about the visit to Portomaso. Abdilla says it happened the “Sunday or two Sundays” after the Times of Malta revealed 17 Black belonged to Fenech. Comodini Cachia interjects, suggesting it happened between the 9 and 14 of the month.
Kurt Sansone
11:08 He is asked whether he formed part of the task force investigating the Caruana Galizia homicide. “Yes, but I was actively involved last August when working on the Melvin Theuma money laundering investigation. Before the Degiorgios and Muscat arraignments in December 2017, the Economic Crimes Unit was not involved,” Abdilla says.
Kurt Sansone
11:05 Abdilla: “It was 18 March [2018] for sure because the FIAU report told me.”
Kurt Sansone
11:04 Abdilla is asked about a visit to Yorgen Fenech at Portomaso with then deputy police commissioner Silvio Valletta. He is also asked when he got to know about the involvement of Fenech in 17 Black.
Kurt Sansone
11:02 Abdilla: “Normally, the correspondent bank would have the Swift message... to date we want the full picture of Yorgen Fenech and all his interests in Dubai.” He insists on answering the question in private.
Kurt Sansone
11:01 Abdilla wants to answer in private.
Kurt Sansone
11:00 Comodini Cachia: “Had you asked any American correspondent banks about the transactions?”
Kurt Sansone
11:00 Abdilla: “Yes.”
Kurt Sansone
11:00 Comodini Cachia: “Doesn't this always require an American correspondent bank?”
Kurt Sansone
10:59 Comodini Cachia asks about 17 Black and Dubai. She queries whether the police information indicated that the transactions were mostly in dollars. “Yes, mostly,” Abdilla replies.
Kurt Sansone
10:58 Abdilla: “The Egrant inquiry involved, among other things, gathering all the journalist's writings on the issue. We didn't find the transaction and couldn't trace it at all... there was nothing that was close to this allegation. At the time, Azerbaijan did not even have a functional FIAU. We tried to investigate any truth in that report and analysed everything. But we found nothing at all.”
Kurt Sansone
10:56 Azzopardi: "Why?"
Kurt Sansone
10:56 Azzopardi says there are Pilatus directors in Malta. He continues that Caruana Galizia had mentioned on 19 April 2017 a link between the daughter of the Azerbaijani leader, Alijeva, and Egrant but the police waited 24 hours to investigate.
Kurt Sansone
10:54 The board stop the question, saying that he would have to ask it to the MFSA.
Kurt Sansone
10:54 Azzopardi expresses surprise that the Pilatus director Armin Eckerman, who gave the advice to sue Daphne Caruana Galizia, and who was required to approve all prospective clients, was a director of Finanzia Malta Ltd, a company based in Malta. “We have a director of a money laundering machine, who has ruined our reputation and we will all suffer for it, being declared fit and proper by the MFSA. How did the MFSA declare him fit and proper?”
Kurt Sansone
10:52 Abdilla says that it had been confirmed but it wasn't criminal. “You have the core banking system and a swift banking system, which are not the same.”
Kurt Sansone
10:50 Azzopardi reads from an interview in a financial crime blog with a Pilatus executive. “Did he have a double accounting procedure?”
Kurt Sansone
10:49 Abdilla says the US authorities hadn't answered a rogatory letter and had given reasons. But the rest is to be discussed behind closed doors, he adds.
Kurt Sansone
10:48 Azzopardi: “Have the Maltese authorities asked for the extradition of Ali Sadr from the US?”
Kurt Sansone
10:47 Abdilla: “I don't remember.”
Kurt Sansone
10:47 Azzopardi: “So, whether it was a crossword puzzle or a declaration regarding ownership of a secret company you don’t know?”
Kurt Sansone
10:47 Abdilla: “I don't remember.”
Kurt Sansone
10:46 Azzopardi asks about CCTV footage of Pilatus Bank owner Ali Sadr being handed a paper and putting it in his briefcase. It is important, he says.
Kurt Sansone
10:46 Abdilla explains that not even the magistrate had sent letters rogatory to Montenegro. Letters rogatory had been sent to France though, he confirms.
Kurt Sansone
10:45 Azzopardi asks Abdilla why he had told his subalterns not to send the letters rogatory to Montenegro until the end of summer.
Kurt Sansone
10:44 Azzopardi asks more questions, this time about Interpol and Europol cooperation in cross-border investigations involving Latvia, Dubai and Montenegro.
Kurt Sansone
10:43 Lofaro: “Ma nifhimx... imma m’inix injoranta u m’intix ser tgħallimni int.”
Kurt Sansone
10:42 Abdilla: “Ma tifhimx sinjura…”
Kurt Sansone
10:42 Judge Lofaro asks why he hadn't sent for Keith Schembri and Konrad Mizzi. She shakes her head and adds: “We seem to be living in a parallel universe.”
Kurt Sansone
10:40 Abdilla protests that the police are bound by procedure and protocol. “The police cannot just up and do things like this… I was hurt by the fact that the media had been more successful than the police on this issue,” he adds.
Kurt Sansone
10:38 Azzopardi: “Do you know that a journalist and the son of the victim went to Dubai and obtained this information? Why can't the Maltese police not do this?”
Kurt Sansone
10:36 Abdilla says that in the last sitting he had said that the Dubai authorities were cooperating, but insists that today he is taking that back.
Kurt Sansone
10:36 Abdilla is unhappy that the media are reporting that Dubai had cooperated in the investigation. “The police are being led by the nose by the Dubai authorities,” he says.
Kurt Sansone
10:34 Abdilla: “No. the investigation is part of the 17 Black investigation. There was just one transaction involving Cifidex... where necessary we are sending letters rogatory. Dubai hasn't bothered replying. The Cifidex report in its conclusive state hadn’t arrived from the FIAU. All we have is a draft report. The investigation into Cifidex was given a boost with the arrest of Yorgen Fenech.”
Kurt Sansone
10:33 Azzopardi asks whether the police had sent for any of the directors of Enemalta over the Cifidex and Montenegro investigation. Reference is to a wind farm project purchased by Enemalta from Cifidex in Montenegro in 2015. A recent news investigation by Reuters and Times of Malta revealed how Cifidex had only just bought the shares in the project before selling them at more than triple the price to Enemalta. Yorgen Fenech’s 17 Black ended up pocketing a “profit share” from the Cifidex sale.
Kurt Sansone
10:30 Abdilla: “The case is almost concluded... the person doing it is a good man... and it might not even be perjury.”
Kurt Sansone
10:29 Azzopardi points out that in July 2018, Magistrate Aaron Bugeja who led the Egrant inquiry had demanded that Karl Cini from Nexia BT be investigated for perjury.
Kurt Sansone
10:28 Lawyer Jason Azzopardi asks how many inspectors are in his team. “Currently four,” he replies, but at the time he only had two.
Kurt Sansone
10:27 Abdilla: “Today with the rules of disclosure, the instructions I give on all my cases is that unless you have enough evidence you don't send for people… No request for international cooperation had been made at the beginning.”
Kurt Sansone
10:26 Judge Lofaro cannot believe that he had not spoken to Schembri or Mizzi or other high profile subject persons.
Kurt Sansone
10:22 Abdilla: “No.”
Kurt Sansone
10:22 Judge Abigail Lofaro interjects and with a loud voice asks: “Did a magistrate tell you not to summon Keith Schembri? Yes or no?”
Kurt Sansone
10:21 Abdilla: “In many of our cases, the police don't work independently of the magistrate. We need the experts of the magistrate...”
Kurt Sansone
10:20 Abdilla: “At first, we assume that the bank works with normal due diligence. Due diligence indicated Keith Schembri. I hadn't sent for him at the time but Keith Shembri was later summoned in the [Egrant] magisterial inquiry.”
Kurt Sansone
10:19 Comodini Cachia points out that the bank’s computers were seized a year after the first report was filed.
Kurt Sansone
10:19 Abdilla: “People out there might think that we did nothing. But Malta had one of the largest investigations. The FIAU investigated. Foreign experts were involved - we had the best experts involved. The bank was analysed from scratch, it cost us millions. Malta never had an investigation like this before.”
Kurt Sansone
10:16 Abdilla says that Michelle Muscat was first mentioned on the night that the Egrant story broke on Caruana Galizia’s blog.
Kurt Sansone
10:16 Abdilla continues that he would use Daphne Caruana Galizia’s blog as a source for his investigations. It was probable that he had used it for the bank investigation, he adds.
Kurt Sansone
10:15 One of the judges interjects: “This is good but in order for this to happen a journalist had to be murdered.”
Kurt Sansone
10:14 Abdilla says he wants to talk about the Pilatus investigation and gives a long explanation of how this was done. “Hopefully in the coming months we will have arraignments,” he adds.
Kurt Sansone
10:12 Abdilla says he doesn't remember what the documents which were taken out of the bank were. “I'm sorry, I didn't come prepared for that,” he says.
Kurt Sansone
10:11 Comodini Cachia says the allegation is that Michelle Muscat, the wife of former prime minister Joseph Muscat, had her name linked to Egrant, a Panama company with a bank account at Pilatus Bank.
Kurt Sansone
10:09 Lawyer Ian Refalo points out that it would be a crime to do otherwise.
Kurt Sansone
10:09 Abdilla: “The only people we tell of the outcome of an investigation is the FIAU itself.”
Kurt Sansone
10:09 Abdilla says he had been investigating former European Commissioner John Dalli and former OPM chief of staff Keith Schembri, but hadn't contacted them about it.
Kurt Sansone
10:08 QUICK REMINDER: The inquiry board is hearing the testimony of Assistant Police Commissioner Ian Abdilla. He headed the police Economic Crimes Unit until last week, when he was replaced by the incoming Police Commissioner Angelo Gafà. Abdilla has faced flak for failing to carry out proper investigations into numerous allegations of money laundering by people close to power. He is largely being questioned on a number of investigations in his remit that were linked to stories written by Daphne Caruana Galizia and people connected to her murder.
Kurt Sansone
10:04 Abdilla: “Until the issue exploded, Pilatus was one of the banks which we would contact for information in investigations.”
Kurt Sansone
10:04 Judge Mallia points out that this was a complaint made by a bank.
Kurt Sansone
10:04 Abdilla: “I know they sent a complaint but I cannot remember the specifics. I didn't enter into this issue, I assigned it... I can't remember all the complaints.”
Kurt Sansone
10:03 The lawyer says that in 2016, Pilatus Bank issued a PR announcing it was aware of misappropriation of information and filed a criminal complaint about leaks in its regard.
Kurt Sansone
10:01 Abdilla: “We didn't take any steps as... God forbid that every time we receive a report we take steps. Every bank has these reports.”
Kurt Sansone
10:00 Abdilla is then asked about account holders at Pilatus Bank. “There was only Keith Schembri... as far as I know, Konrad Mizzi doesn't have an account there.”
Kurt Sansone
10:00 The lawyer presses on: “The reports on dubious transactions were in July 2016 and the other in November 2016.”
Kurt Sansone
09:59 Abdilla: “What happened was that we were working on the Egrant case...”
Kurt Sansone
09:59 Comodini Cachia asks: “So as liaison officer for the FIAU you had no report on Pilatus bank before?”
Kurt Sansone
09:57 Lawyer Therese Comodini Cachia, representing the Caruana Galizia family, asks for the date of the bank's closure. “28 April 2017,” Abdilla answers. He adds that the FIAU report on the bank was received in 15 October 2018.
Kurt Sansone
09:55 The board press Abdilla on the issue. “The bank was closed immediately and spent months under lock and key... Even if we had been on the scene immediately after the broadcast there would have been nothing because it was all recorded,” Abdilla replies.
Kurt Sansone
09:53 Abdilla says that the matter was the subject of a long discussion with the Attorney General as to under what law the police could stop the owner of a bank from carrying documents. “He wasn't stealing them,” he says.
Kurt Sansone
09:52 Mallia admonishes him. “Don't you think it is irresponsible, leaving him alone for hours despite the suspicion?”
Kurt Sansone
09:50 Abdilla says he wasn't aware at the time the footage was being aired. "Shortly afterwards I received a call from the Police Commissioner asking me to come to depot at around 9pm. The issue of the suitcase was subject of the Egrant inquiry. The bank was entirely covered with CCTV. There is uninterrupted footage from the moment that Sadr left his taxi and entered the bank."
Kurt Sansone
09:49 On the Pilatus Bank investigation, the judges ask about the time period when the bank was allowed to operate despite the live broadcast of its owner leaving the premises at the dead of night. The reference is to live footage taken by a NET TV camera crew that filmed Pilatus Bank owner Ali Sadr Hasheminejad and a top bank official leaving the Ta’ Xbiex premises at night. Hasheminejad was carrying with him a travel bag.
Kurt Sansone
09:47 Mallia narrows down his question to investigations on the Panama Papers, Pilatus Bank, the Enemalta Montenegro deal and other related ones.
Kurt Sansone
09:46 Abdilla: "The cases are very varied. There are hundreds not one or two..."
Kurt Sansone
09:46 Michael Mallia, the retired judge heading the inquiry, asks Abdilla about his many money laundering investigations.
Kurt Sansone
09:44 Abdilla is administered the oath.
Kurt Sansone
09:44 Lawyer Prof. Ian Refalo asks whether the sitting is going to be behind closed doors. The judges say it is not going to be a closed sitting a priori.
Kurt Sansone
09:43 The three judges heading the inquiry file in and Abdilla takes the stand.
Kurt Sansone
09:39 In his earlier testimony, Abdilla had recounted how once he had arranged to question Yorgen Fenech at his Portomaso office but while on his way, then deputy police commissioner Silvio Valletta called him and told him to put off the visit because Fenech was sick. It has been shown that Valletta and Fenech were close friends, having also gone abroad together to watch a football match. Abdilla could not explain why Fenech was not summoned at the police depot to be questioned.
Kurt Sansone
09:36 Abdilla had already testified in the public inquiry earlier this year. Last week, Abdilla was replaced as head of the police's Economic Crimes Unit in one of the first major decisions taken by new Police Commissioner Angelo Gafà.
Kurt Sansone
09:35 Lawyers and journalists start to fill the hall. Assistant Commissioner Ian Abdilla has been waiting outside the courtroom since 9am. He is expected to testify.
Kurt Sansone
09:34 Good morning.
Kurt Sansone
Matthew Agius was Senior Reporter on Law and Court Affairs at MaltaToday from 2014 to 2024...
