Prime Minister to sue Matthew Caruana Galizia for libel

Prime Minister Joseph Muscat has said he will file a defamation case against Matthew Caruana Galizia, the ICIJ journalist and son of Malta Independent columnist Daphne Caruana Galizia, over a series of Facebook posts that suggest Muscat took kickbacks on the sale of Maltese passports.

In a Facebook post detailing the use of an offshore company by Nexia BT managing partner Brian Tonna to receive fees from the sale of IIP passports, Caruana Galizia suggested that the prime minister would act as introducer of potential clients, and that his own offshore company invoice Tonna’s offshore company for a cut on the fees.

The hypothesis used by Caruana Galizia, one of the journalists who worked on the Panama Papers for the ICIJ, carried little nuance on his suggestion of how the prime minister stood to gain from the kickback.

“What the contract hides is that both of the companies are owned by Brian Tonna,” he said referring to Tonna’s BVI company Willerby Trade Inc, which was revealed by the Panama Papers of taking 50% in fees from successful IIP applicants from Tonna’s own BT International, an accredited agent of the IIP.

“This is how money laundering works: Joseph Muscat or Keith Schembri introduce a passport buyer to Brian Tonna or Karl Cini; the passport is sold and the buyer pays a fee to Brian Tonna’s company, BT International Limited; Willerby Trade Inc issues a fake invoice to BT International Limited for 50% of that fee; the money is paid into a secret bank account opened by Brian Tonna; offshore companies owned by Keith Schembri and Joseph Muscat invoice Willerby Trade Inc for their cut; the cut is transferred to other secret bank accounts opened in their names.”

Caruana Galizia uploaded emails and documents released through the Panama Papers of the Willerby-BT International agreement.

Earlier in the day, Muscat said that the journalist had alleged that he had taken kickbacks and invented a story about him, and now he must face his responsibilities. “I will not accept this,” Muscat said during a press conference Wednesday morning. “For the record, since there are rumours flying around, neither me nor my wife have any interest in a fashion company and we are not building another house.”

The same allegation is already under inquiry by a magistrate, after contents of a report by the Financial Intelligence Analysis Unit made their way to Opposition leader Simon Busuttil. According to the FIAU, Tonna could have paid the Prime Minister’s chief of staff Keith Schembri €100,000 through Willerby Trade Inc. shortly after receiving payment from three successful Russian applicants for the IIP. Tonna and Schembri denied allegations of a kickback, and insist that the payment was for a 2012 loan.

Joseph Muscat has already asked a magistrate to carry out an inquiry into allegations by Daphne Caruana Galizia that he or his wife could be the owner of a secret offshore company.