German MEP Sven Giegold: Where’s Panamagate police investigation?

It is almost 12 months to the day Panamagate became the Labour government’s indelible scandal, and MEPs leaving Malta after a marathon session of meetings with journalists, ministers, financial services practitioners and tax authorities are scratching their heads.

One German MEP, Sven Giegold, who belongs to the Green Group in the European Parliament, is sat beside Alternattiva Demokratika leader Arnold Cassola giving a rundown of the day’s meetings.

“It looks like it’s too early to draw a conclusion on what still seems to be a textbook case of money laundering,” Giegold says of the former energy minister Konrad Mizzi’s Panama set-up – a secret offshore company whose ownership was vested in an offshore New Zealand trust. His auditors said it would be the vehicle for business earnings; Mizzi denies this and on Monday insisted with MEPs it was a family wealth trust.

“We are not judges,” Giegold says of the committee of MEPs who are inquiring into the application of money laundering rules in Malta. “And we have to take into consideration the presumption of innocence. The documents show that the trust was set up for a recycling business and remote gaming business, rather than to administer family wealth. Mizzi was not very convincing that this trust was not intended for a business.

“But where is the proof that the Nationalist Party is saying that this is most corrupt government,” Giegold then asks, momentarily calling for the examination of the evidence at hand.

“From a German culture standpoint, the boldness of the statement by [Nationalist MP] Beppe Fenech Adami is puzzling… if you allege corruption, you must substantiate that kind of claim.”

This is Malta, however, and the polarized debate on Konrad Mizzi’s and Keith Schembri’s ownership of two Panama companies, acquired together with a third company by their auditors Nexia, and whose mysterious ownership courts controversy is split into two camps: those who suspect “corruption” and a plan to put undeclared earnings into the secret companies, and those who want to rally behind the government in the absence of concrete proof.

Egrant, the third company set up at the same time as Mizzi’s and Schembri’s Hearnville and Tillgate, was also in the PANA committee’s crosshairs. Nexia BT’s Brian Tonna did not attend the hearing, and instead sent his answers in writing. Giegold says Tonna’s claims that he is the owner of Egrant does not answer the fact that he remains the nominal shareholder with just 1%, while the remainder of the company could be owned by someone else holding the shares. “Tonna says he is the ultimate beneficial owner of Egrant, but the indications are that there were other intentions for the company.”

AD chairperson Arnold Cassola also says that Egrant’s directors are the same Mossack Fonseca personnel implicated in footballing ace Lionel Messi’s tax avoidance set-up, saying this puts paid Brian Tonna’s attempt to use the names of people Ricardo Samaniego to certify Egrant as being Tonna’s company.

At the heart of Panamagate however lies a big question mark on independent institutions, like the police, carrying out their job. MEPs are none the wiser as to why a politically exposed person with a Panama set-up was not the subject of a police investigation.

“Edward Scicluna [finance minister] said he ‘under the impression’ that the Financial Intelligence Analysis Unit was investigating the Panama Papers,” Giegold said of the FIAU, which collects suspicious transaction reports (STRs) from financial services practitioners and passes them on to the police.

The former FIAU director Manfred Galdes – who resigned soon after the Panama Papers broke – told the PANA committee that the unit had forwarded 29 reports to the police, although no prosecution had yet resulted on these reports.

When asked whether MEPs asked Galdes whether he was actually investigating the Panama Papers – for an FIAU report presented to the police and then ignored would be doubly criminal – Giegold said that such a direct question was not put to him. “We took it as a given. We did not think the FIAU’s work on the Panama Papers has been in dispute.”

Galdes was said to have declined from answering direct questions, citing professional secrecy as FIAU director, where he sat on a board that is headed by the Attorney General.

Giegold was also surprised that EMD, the financial services practitioners found with the highest number of Mossack Fonseca clients, had never filed one single STR to the FIAU on their Panama clients. “I think this is a rather poor show, because what else could merit an STR if not setting up a company in Panama?”