Updated | PN slams 'dictatorial tactics' as PL sheds doubt on 'secret' loan scheme

Labour asks whether there’s any link between individuals loaning money to PN and beneficiaries of Panama companies

The Nationalist Party accused Labour of employing “dictatorial tactics” after tourism minister Edward Zammit Lewis asked whether there’s any link between individuals loaning money to the PN and beneficiaries of offshore companies that were set up by intermediaries associated with the PN.

The minister's call echoes Labour's challenge to opposition leader Simon Busuttil to publish the names of the beneficiaries of offshore companies whose intermediaries are linked to the PN.

Such intermediaries include PN MP Francis Zammit Dimech, PN executive president Ann Fenech, and Malta’s former permanent representative to the EU Richard Cachia Caruana.

Zammit Lewis told a press conference that it would be interesting to know whether any of these beneficiaries also took out a loan through the PN’s ‘Cedoli’ scheme, which he said was "shrouded in secrecy."

The controversial Cedoli scheme allows people to anonymously donate a minimum €10,000 to the PN, that will be repayable in ten years at a 4% interest rate.

Busuttil has accuses Labour of conflating shareholders of offshore companies whose names appeared in the Panama Papers and the intermediaries who helped set them up so as to ease the pressure on minister Konrad Mizzi and OPM chief of staff Keith Schembri – who both hold offshore companies.

However, Zammit Lewis insisted that intermediaries have their own responsibilities to shoulder.

“Who are the beneficiaries that these intermediaries represented and where did their money originate from?” he asked. “Simon Busuttil has played judge and jury and has absolved them from any wrongdoing overnight, which shows how non-credible he is. He must get his house in order before he can start preaching about political correctness.”

Zammit Lewis said that he personally agrees with the creation of a transparency register that would list the real beneficiaries of companies set up in Malta.

A national transparency register will have little bearing on offshore companies in Panama or other tax havens, but it would send a signal to the European Union and other international organisations in the global fight against tax evasion and money laundering.

The minister said that the PN is not offering any guarantee that the money it is being loaned by individuals does not originate from money laundering.

“This issue goes beyond legality, but its about political correctness,” Zammit Lewis, said, adding that while Busuttil was quick to absolve intermediaries of any wrongdoing “they also have to shoulder their responsibilities.

He added that the Cedoli scheme goes against the spirit of the party financing law, unanimously passed in the House last year, that forces the disclosure of party donations over €7,000 and caps individual donations at €25,000.

He didn’t rule out future legal amendments to the party financing law to close the loophole that allows for the Cedoli, but said that the onus currently falls on Simon Busuttil to disclose the names of the loaners in the spirit of transparency.

‘Government using dictatorial tactics’ – PN

The Nationalist Party responded by accusing the government of using “dictatorial tactics” by threatening to close the loophole that permit the Cedoli.

“This is the second time in two months that the government has tried to change the law in an attempt to shut the Opposition up,” it said, citing its recent legal notice that forces political parties to pay commercial advertising rates for billboards outside election time.

“Now that the court has upheld our request for an injunction on that legal notice, the government is now threatening to change the party financing law that both parties had unanimously agreed to introduce so as to close the PN’s successful financing scheme. This is anti-democratic behaviour that only takes place in dictatorial countries.”

The PN dismissed Labour’s claims of links between Cedoli loaners and beneficiaries of offshore companies as an “invention”, arguing that the only politicians who were named in the Panama Papers scandal are Schembri and Mizzi.