Former Economic Crimes chief insists police had no evidence to seize Nexia BT servers after Panama Papers
Ian Abdilla testifies in the Caruana Galizia public inquiry: 'It would have been too difficult to challenge individuals with just an FIAU report. You are analysing the decision with hindsight. It is easy to say that now when we know everything."
8 July 2020, 9:27am
Karl Azzopardi
Karl Azzopardi
3 min read
The former head of the police Economic Crime Unit has defended his decision in 2016 not to seize the servers of accountancy firm Nexia BT when the Panama Papers scandal erupted.
Ian Abdilla told the public inquiry into the murder of journalist Daphne Caruana Galizia on Wednesday that the police feared they would be sued if they seized the servers of a company with no proof of wrongdoing.
Nexia BT is the accountancy firm that opened the Panama companies and New Zealand trusts for then minister Konrad Mizzi and OPM chief of staff Keith Schembri. Nexia was the representative in Malta of Panama firm Mossack Fonseca, which experienced a massive data leak that led to the Panama Papers.
Abdilla also defended the decision back then not to call in Konrad Mizzi and Keith Schembri for questioning when their Panama companies were outed. The Financial Intelligence Analysis Unit had compiled a report, which it passed on to the police for further investigation over suspicion of money laundering.
But Abdilla insisted under questioning that it would have been too difficult to challenge individuals with just an FIAU report. “You are analysing the decision with hindsight. It is easy to say that now when we know everything... Maybe I would have taken a different decision, but it is easy to say that now when we know everything.”
Abdilla, who was removed from chief of the Economic Crimes Unit by incoming Police Commissioner Angelo Gafà, insisted that if Keith Schembri and Konrad Mizzi were interviewed by the police, the pair would have declared that they have the Panama structures, which are not illegal in their own right. “It would have stopped there,” Abdilla says.
Abdilla added: “We wanted to follow the money and prove there was money laundering.”
His assertion was challenged by lawyer Jason Azzopardi, who said the intention to launder money was already illegal.
In the last sitting of the public inquiry, Vince Muscat’s former defence lawyer Arthur Azzopardi said that a request for a presidential pardon by his client (Muscat), had been dismissed by Lawrence Cutajar on the grounds that the testimony was “hearsay” evidence.
Asked by inquiry board member Judge Abigail Lofaro why Muscat’s presidential pardon hadn’t been granted, Azzopardi said former police chief Cutajar had told him that the word from “the top” was that Muscat’s testimony was hearsay.
READ ALSO: Police chief dismissed Vince Muscat pardon over ‘hearsay’ evidence, former defence lawyer says
12:14 That's it for today. Thank you for following.
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12:14 The inquiry will continue on Friday at 9:30am.
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12:11 Inquiry chair Michael Mallia says he has more questions but suggests the testimony continue on another day. The other board members agree and the judges leave the courtroom.
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12:10 Abdilla replies “no”.
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12:09 Judge Lofaro interrupts: “That was not the question.”
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12:09 Abdilla thinks about it for a minute. “I have my theories on why she was killed, but I'm not prepared to talk about it in open court.”
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12:08 Azzopardi asks Abdilla whether, over the past four years, he ever felt that the Panama Papers and Daphne Caruana Galizia's death were related.
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12:06 Azzopardi jumps in, stating that having the structures was already illegal. “The intention to launder money is already illegal,” the lawyer insists.
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12:05 Abdilla: “We wanted to follow the money and prove there was money laundering.”
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12:05 Abdilla reiterates that if Keith Schembri and Konrad Mizzi were interviewed by the police, the pair would have declared that they have the Panama structures, which are not illegal in their own right. “It would have stopped there,” Abdilla says.
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11:59 Lofaro jumps in, “but you knew the servers might have been cleaned”.
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11:59 Abdilla: “Maybe I would have taken a different decision, but it is easy to say that now when we know everything.”
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11:58 Abdilla replies by stating it would have been too difficult to challenge individuals with just an FIAU report. “You are analysing the decision with hindsight. It is easy to say that now when we know everything,” Abdilla says.
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11:55 Azzopardi replies by telling him that he took the decision not to seize the servers, and now he is trying to work backwords in justifying the decision.
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11:55 Abdilla disagrees, stating his squad had been sued once.
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11:54 Azzopardi asks Abdilla whether the police had ever been sued for damages. He answers the question himself: "They never were."
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11:43 Judge Lofaro agrees with Azzopardi. “Were it myself I would have seized them at that moment,” she tells Abdilla.
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11:43 Azzopardi: “And yet you didn't seize the servers?”
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11:42 Azzopardi continues: “All this and no suspect arose in your mind that a criminal act might have been carried out, might be carried out presently or is being planned?”
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11:42 Azzopardi: “The FIAU has the powers to investigate terrorism financing, there were the Panama Papers revelations around the world, you had the reasonable suspicions, you can easily find the minister's assets, and yet you did nothing?”
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11:41 Abdilla agrees the facts led to a number of suspicions.
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11:40 Azzopardi quotes an FIAU report which cited a number of suspicions on the structures owned by Konrad Mizzi and Keith Schembri, including structures being too expansive and a number of properties in England deemed too suspicious.
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11:31 Lawyer Jason Azzopardi replaces Comodini Cachia.
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11:23 Abdilla remains silent.
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11:23 Judge Michael Mallia: “My conclusion is that you knew full-well the evidence would be compromised, and you still waited a year.”
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11:17 Abdilla: "It was the decision we took at the time."
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11:17 Comodini Cachia asks why the police had waited more than a year to seize the servers, knowing full well that it would have given ample time for information to be deleted from them.
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11:15 Comodini Cachia then asks Abdilla if the Nexia BT servers were seized by the police. He replies that these were lifted during the Egrant inquiry, which took place more than a year after Panama Papers scandal emerged.
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11:13 In his report, Abdilla had pointed out that seizing the servers might leave the police exposed to legal action by Nexia BT as the information "might not be there, might have been deleted or encrypted".
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11:13 Comodini Cachia asks Abdilla who he met before taking the decision not to seize Nexia BT's servers. Nexia BT was the financial services firm that acted as the accountant for Konrad Mizzi and Keith Schembri, handling the opening of their Panama companies.
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11:07 Comodini Cachia shows him documentation proving her statement. Abdilla says that information might have slipped his mind.
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11:06 Bank of Valletta didn't, Comodini Cachia says.
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11:06 Abdilla replies that to his knowledge all banks got back to him.
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11:05 Comodini Cachia: “When you asked the banks for information, did they all get back to you? Or was there a certain bank which didn't?”
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10:56 Mallia exclaims that he never saw the police working in such a manner.
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10:56 Lofaro: “Wasn’t the reason why the accounts were opened not contributory to whether there were illegalities or not?”
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10:50 Abdilla says it would have been useless to ask Keith Schembri and Konrad Mizzi why they opened their Panama companies. “We needed to find proof of money laundering and illegality.”
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10:45 Lofaro: “How much did the AG's suggestion affect your decision? It affected you a lot didn't it?”
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10:44 Mallia: “So, the FIAU shows you enough evidence to investigate the persons, but you do nothing
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10:42 He also explains that sometimes the police use the FIAU to obtain information. "The FIAU sometimes is much faster in getting information. Months faster, sometimes," Abdilla tells the judges.
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10:41 “These are decisions that are taken on the ground,” Abdilla says, without getting into much detail. He says that, for example, from devices lifted from Yorgen Fenech at least 11 investigations have been started.
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10:37 An angered Michael Mallia tells Abdilla: “How can you expect the FIAU to continue investigating the case, when in a report given to you by them there was a clear case of criminality?”
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10:37 Abdilla: “We need to know whether money had been funnelled through 17 Black to Hearnville and Tillgate.”
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10:36 On money laundering, Abdilla says the focus was not to identify the structures in Panama, but whether money had been laundered and through which companies.
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10:32 Asked why the police did not investigate the Panama Papers, Abdilla says that he was assured by the tax authorises that if criminality arises, they would be informing the police.
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10:32 Abdilla: "Panama doesn't automatically mean money laundering."
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10:31 Lofaro says that for a politically exposed person it is, to which Abdilla says it is not.
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10:30 Asked on his view on the Panama Papers, Abdilla says that Panama Papers is not just about Konrad Mizzi and Keith Schembri. “I also want to say that not every Panama structure is illegal.”
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10:26 The judges ask why the investigations were not carried out in tandem, to which Abdilla says there weren't any resources.
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10:25 Abdilla rebuts that once an entity starts an investigation, it is up to them to finish it. "If the FIAU starts an investigation, you can't expect a branch of the police to take over."
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10:24 Said Pullicino interjects, saying that it was Abdilla's duty to investigate such information and extract it.
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10:24 Abdilla says the first report had little to no information on Hearnville and Tillgate, the Panama companies opened by Konrad Mizzi and Keith Schembri, respectively.
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10:20 Michael Mallia states that the AG sat on the FIAU's board.
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10:20 Judge Lofaro asks whether then deputy police commissioner Silvio Valletta was with them at the AG's meeting. Abdilla says he cannot recall.
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10:19 Abdilla says that after the meeting with Manfred Galdes, he had prepared a report on what had been discussed. “We then we went to the AG,” he adds.
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10:18 Said Pullicino clarifies they are speaking about the Panama Papers.
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10:18 Abdilla tells the judges that the suggestion was made on the first letter sent by then FIAU chief Manfred Galdes to then police commissioner Michael Cassar.
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10:17 The FIAU report in question is most likely the one concerning Konrad Mizzi in the wake of the Panama Papers revelations in 2016.
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10:16 Judge Michael Mallia asks Abdilla: “You had meetings with the Attorney General. What was your reaction when you had the FIAU report indicating otherwise?”
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10:16 Abdilla: "I replied to the question I was asked."
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10:15 Lofaro: "Had we not had the file, we wouldn't have known the whole truth. You didn't say the truth, we want the whole truth."
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10:12 Judge Lofaro starts by asking Abdilla why he didn't tell the whole truth during the last sitting.
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10:11 Abdilla had already testified last week when he admitted that Konrad Mizzi and Keith Schembri were never called in for questioning by his unit in the wake of the Panama Papers scandal and other allegations of money laundering and corruption.
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10:10 Ian Abdilla, the former head of the police Economic Crimes Unit, is called to testify.
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10:08 Azzopardi steps down from the witness stand.
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10:08 Azzopardi: “The plays I wrote are aimed at expressing how politics has overrun the Maltese soul, numbing it into having a polarised mentality.”
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10:03 Lofaro points out that Caruana Galizia had written several articles in her blog against Azzopardi. "And she lied as well," he reacts.
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10:02 Lofaro now turns to Azzopardi's relationship with Caruana Galizia. She asks him what relationship he had with her, to which he answers "no relationship whatsoever".
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10:01 "She wasn't a politician," Lofaro exclaims, to which Azzopardi answers that a writer has to have the freedom to write on what he wishes to write.
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10:00 Judge Abigail Lofaro debates the inclusion of an independent journalist in a play with Azzopardi.
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09:56 Azzopardi says at the time, Caruana Galizia was a very influential person and heavily involved in politics. “This is why the production was relevant at the time it was proposed,” he adds.
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09:52 Former chief justice Joseph Said Pullicino asks whether Azzopardi wrote the play, to which he says he was just a producer.
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09:52 "This production inspired me to write the play," he says.
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09:51 Azzopardi says it was purely satirical and compares it to a foreign production called Who Killed Margaret Thatcher?
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09:50 The play had been proposed a year-and-a-half before Caruana Galizia’s murder.
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09:50 Judge Michael Mallia asks Azzopardi about his play Min Qatel lil Daphne? (Who Killed Daphne?)
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09:49 TV and theatre director and script writer Mario Philip Azzopardi is summoned to the witness stand.
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09:47 Caruana Galizia family lawyer Therese Comodini Cachia submits to the inquiry board, the National Audit Office report on the Vitals hospitals contract. The NAO report was tabled in parliament yesterday and contains damning conclusions on how the contract was awarded.
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09:46 The judges have entered the court room.
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09:42 We are waiting for the judges to take their place.
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09:38 The inquiry is being conducted by a three-member panel - retired judge Michael Mallia, former chief justice Joseph Said Pullicino and Judge Abigail Lofaro. Mallia chairs the inquiry.
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09:30 We are here in court to follow another session of the Daphne Caruana Galizia murder public inquiry.
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09:29 Good morning.
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The inquiry is tasked, among other things, with determining whether the State did all it could to prevent the murder from happening.
Caruana Galizia was murdered in a car bomb just outside her Bidnija house on 16 October 2017. Three men, George Degiorgio, Alfred Degiorgio and Vince Muscat, have been charged with carrying out the assassination, while Yorgen Fenech is charged with masterminding the murder.
Melvin Theuma, who acted as a middleman between Fenech and the three killers, was granted a presidential pardon last year to tell all.
Karl Azzopardi is Online Editor and an IGM press awards (Human Stories) winner of 2019
