PN: government ‘paralysed’ by Panamagate

The Nationalist Party today said government is “paralysed” and questioned the motives of Keith Schembri in becoming the Prime Minister’s Chief of Staff and leave behind a multi-million business.

Addressing the press this afternoon, PN deputy leader Beppe Fenech Adami said the case involving health and energy minister Konrad Mizzi and Schembri, who admitted to having separate companies in Panama – widely recognised as a tax haven -  and trust funds in New Zealand has “divided Labour” and described it as the ”beginning of the end” for Muscat’s government.

Schembri – who for years led the 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 – “would have been kicked out of office in a normal democracy,” Fenech Adami said.

He questioned his true motives behind “abandoning a multi-million business” to take up his new role as Muscat’s chief of staff.

“Was it out of the great love he has for the country?” he questioned sarcastically, while arguing that, as a businessman, Schembri had a conflict of interest in leading government negotiations with foreign countries - including Azerbaijan’s dictator Ilham Aliyev.

“Muscat kicked out former Labour deputy leader Anglu Farrugia on a whim for comments he passed. Why hasn’t he done the same with Konrad Mizzi and Keith Schembri?” Fenech Adami asked.

He also called on the police to investigate Mizzi’s possible breach of the Income Tax Management Act, which requires settlors to inform the Commissioner for Inland Revenue within 30 days of setting up a trust.

Asked why the PN chose to organise a national protest against corruption this Sunday before exploring other avenues, including a motion of censure or no confidence in Mizzi and Schembri, Fenech Adami said the case will “continue developing” and did not rule out further action.

The PN deputy leader called on Schembri to provide details on the company he has registered in Panama - including its name, registration address, and the date it was set up.

“Both Mizzi and Schembri were advised to set up their trusts and companies by Nexia BT, an advisory firm that is very close to Castille, and there are very serious allegations out there that they set them up at the same time,” he said.

Mizzi also noted that Mizzi’s offshore company in Panama, Hearnville Inc, which he announced on Monday that he will close down, was set up for him by a firm associated with Mossack Fonseca, a Panama-based law firm that has attracted notoriety for clients associated with money laundering an dirty cash. Such clients include the former Tunisian president Ben Ali and the children of late Libyan dictator Muammar Gaddafi.

“Mizzi and Schembri are trying to fool the public into believing that they set up those companies without having any prior intention to hide any money in their accounts,” he said. “The people are angry and disgusted – not only at Mizzi and Schembri, but at how the Prime Minister has responded to these revelations.”