17 Black: From Daphne’s cryptic post to criminal charges

Next month marks eight years since Daphne Caruana Galizia put up a cryptic message on her blog flagging, for the first time, 17 Black. 

The February 2017 blogpost consisted of a title, ‘17 Black – the name of a company incorporated in Dubai’, and a photo montage of Keith Schembri, John Dalli, Joseph Muscat and Konrad Mizzi with the words ’17 Black – Dubai’ emblazoned beneath them. 

It was later in the comments section of the same blog post that Caruana Galizia also mentioned Yorgen Fenech when replying to an observation made by one of her readers. 

Today, the comment that triggered Caruana Galizia to mention Fenech is no longer available since it was deleted. What we are left with is her reply: “A couple of the owners of their magic new corruption power station: and it’s Yorgen Fenech. So thanks for this, because it really figures.” 

When Caruana Galizia put up that blogpost, she ostensibly did not have the full picture of what 17 Black really was and its purpose. But five days later she described 17 Black as “the company which those crooks use to move money in and out of Dubai”. 

She also said that the Financial Intelligence Analysis Unit (FIAU) and the Police Commissioner “know all about 17 Black”. 

A fuller picture emerged three months later when The Malta Independent revealed that an investigation by the FIAU had found that 17 Black was created for the purpose of transferring money to the Panama companies of Konrad Mizzi and Keith Schembri called Hearnville and Tillgate respectively. 

The FIAU investigation, which was not yet completed, had also uncovered money transfers from a company linked to the agent of the floating LNG storage tanker at Delimara, Mario Pullicino, to 17 Black. 

The TMI story, which came out a week before the 2017 general election, was eclipsed by the allegations made by Caruana Galizia that Egrant, another Panama company, belonged to Michelle Muscat, the wife of then prime minister Joseph Muscat. 

With the Labour Party going on to win the election in spectacular fashion, 17 Black then faded into obscurity. 

Caruana Galizia was murdered in October 2017 and it was after her death that a consortium of investigative journalists preserved her work and started looking into several leads she had been working on. 

Roll forward to April 2018 and Keith Schembri, in a rare public statement issued by the Department of Information, reacted to revelations that his Panama company had listed 17 Black as a target client alongside Macbridge. Schembri confirmed that 17 Black had been included in a business plan for his Panama company but gave no further details. 

The revelations made by the Daphne Project were based on email exchanges that happened in 2015 between Nexia BT, the financial advisors for Schembri and Mizzi, and potential banks in foreign jurisdictions where they were trying to open bank accounts. 

At that point, the unanswered question was who owned the mysterious Dubai company going by a name reminiscent from the gambling world – 17 Black. 

 

The Yorgen Fenech link 

The answer came in November 2018 in a Reuters and Times of Malta report that named Tumas Group shareholder and CEO Yorgen Fenech as the owner of 17 Black. 

The revelation was damning because it provided a direct link between one of the owners of the new gas power station – Fenech not only owned shares in the Electrogas consortium but was also its primary interlocutor with government – and two of the most powerful men in government – energy minister Konrad Mizzi and OPM chief of staff Keith Schembri. 

The gas power station project had been piloted by Mizzi and was a central plank in the PL’s 2013 electoral manifesto because it allowed the government to shift electricity production to cleaner gas and lower electricity prices. 

While Reuters did not trace any fund transfers between 17 Black and the Panama companies owned by Mizzi and Schembri, the connection on its own raised serious question marks over the intention behind the whole obscure arrangement. The implication was that 17 Black would be used as the vehicle for kickbacks to Mizzi and Schembri by one of the power station owners. 

 

A UAE bank account 

The Reuters report quoted unnamed sources saying that Malta’s anti-money laundering watchdog, the FIAU, had identified Fenech as the owner of 17 Black. 

But Reuters also quoted a source in the United Arab Emirates, who said account records at Noor Bank in Dubai identified Fenech as the owner of 17 Black. Banking correspondence described Fenech as the owner and signatory of a 17 Black account at Noor Bank. 

A source in the UAE also told Reuters that around €9 million to €10 million went through 17 Black’s account at Noor in 2015, after which the account became dormant. Reuters could not confirm the figures. 

The source told Reuters that most of the money paid into the 17 Black account had “swiftly moved on to other entities”, while retaining a balance of about €2 million. The bank appears to have frozen the account in the absence of evidence for the business purpose of these in-out transactions. 

The Maltese FIAU had traced two payments to 17 Black, one from a Seychelles-based company fronted by an Azeri national and one from the Malta agent of the gas tanker at Delimara, Mario Pullicino. 

At the time, Fenech’s name was not linked to the assassination of Caruana Galizia. It was a year later, in November 2019 that Fenech was arrested and charged with masterminding the journalist’s murder. He is pleading not guilty and is awaiting trial. 

 

Denying wrongdoing 

Meanwhile, since 2018 all the people linked to the 17 Black saga have denied any wrongdoing. 

Schembri had denied any involvement in the power station deal, insisting the plans related to 17 Black were intended for when he exited politics. He even said that then prime minster Joseph Muscat was aware of this business arrangement. 

Indeed, when testifying in front of the Caruana Galizia public inquiry in December 2020, Muscat confirmed that he knew 17 Black was a “business matter” between Schembri and Fenech and that his chief of staff had told him it had nothing to do with the power station project. Muscat never said when he got to know about 17 Black. 

Meanwhile, Mizzi has continued to insist all along that the Panama company and New Zealand trust were set up for family purposes. He also denied knowledge of 17 Black and its ownership, blaming his financial advisors for the company’s inclusion in the documentation. 

Mario Pullicino of Orion Engineering, admitted making a $200,000 payment to 17 Black but denied any wrongdoing. He insisted that the payment was unrelated to the power station project. 

Likewise, Fenech had denied any wrongdoing or having any untoward link with politically exposed persons. 

 

A magisterial inquiry 

Before Fenech’s name had emerged as the owner of 17 Black, former Nationalist Party leader Simon Busuttil (by that time a backbencher) and PN MEP David Casa had filed a request for a magisterial inquiry into 17 Black and the Panama Papers revelations. 

It was the first time that this mysterious company and the information that emerged from the Panama Papers was going to be investigated criminally. 

Ironically, back in 2016 when Caruana Galizia had revealed the existence of obscure financial structures held by Mizzi and Schembri – later to be confirmed by the Panama Papers investigation – in Panama and New Zealand, the FIAU had initiated an investigation. 

At the time, former FIAU director Manfred Galdes had urged investigators to seize the computers of Nexia BT, the financial advisers who set up the offshore structures for Mizzi and Schembri.  

However, the police had refrained from doing so on the basis of legal advice by then-Attorney General Peter Grech, who argued seizure of Nexia BT’s servers would be a “drastic” and “highly intrusive” move, that could be counter-productive. 

The Caruana Galizia public inquiry had lambasted the police for failing to act on the Panama Papers scandal in 2016. It was only two full years later that a magisterial inquiry into 17 Black and the Panama scandal was triggered on the initiative of Busuttil and Casa. 

 

Eight years and a murder later 

Now, almost eight years after 17 Black first appeared in a headline on Caruana Galizia’s blog, the magisterial inquiry has come to an end. 

Towards the end of December 2024, Magistrate Charmaine Galea passed on her findings to the Attorney General. 

MaltaToday is not privy to the inquiry’s findings but sources have confirmed that the magistrate has recommended criminal action be taken against Keith Schembri, Konrad Mizzi, Yorgen Fenech, Mario Pullicino and another owner of the Electrogas power station, Paul Apap Bologna. 

Apap Bologna had been the person to come up with the idea of a gas-powered power station that would use liquefied natural gas (LNG) as its source since this could be supplied by ships. He had originally presented the proposal to the Nationalist government prior to 2013 but was snubbed. He then took the proposal to the Labour Party, then in Opposition, which made it their flagship electoral pledge in 2013. 

The inquiry also recommends criminal action against several companies. 

The nature of the charges is not yet known but this is the second time within the space of less than a year that Schembri and Mizzi will be charged together. 

Last year, Schembri and Mizzi were charged alongside former prime minister Joseph Muscat and several other individuals and companies with corruption in the Vitals hospitals deal. Schembri is facing separate court cases involving corruption and money laundering linked to the passports scheme and the sale of printing equipment to Progress Press, part of the group of companies that publish Times of Malta. 

Fenech is awaiting trial over charges that he masterminded the murder of Caruana Galizia in 2017. 

All involved in the different cases are contesting the charges against them and have pleaded not guilty.