Six reasons why Joseph Muscat keeps Keith Schembri and Konrad Mizzi

Joseph Muscat’s decision to retain Keith Schembri and Konrad Mizzi in the face of evidence that they owned offshore companies in Panama has been Malta’s greatest political mystery for the past three years – even more so after evidence showing they had two Dubai-based companies as target clients, one of which – 17 Black – is owned by Electrogas shareholder Yorgen Fenech, who denies any wrongdoing.

Sacking Mizzi and Schembri is still seen by many as the only logical thing for the Prime Minister to do. So why is this not the case? His official line is that as a believer in the rule of law, Muscat is waiting for the outcome of a magisterial inquiry called for by his nemesis Simon Busuttil, while he is also appealing to stop it from even happening. So what is the real reason for Muscat’s refusal to do what is expected of him?

Keith Schembri

1. No Keith, No Muscat

It is often said you can’t have Muscat without the Schembri-Mizzi combo, an integral part of the PM’s 10-year plan to take Malta into a more liberal and pro-business direction. Schembri and Mizzi may well have been the enablers when breaking the ice within business circles and convincing the establishment to accept a Labour government. It is often suggested that certain alliances with big business like citizenship experts Henley predate the 2013 election, and that Schembri may have opened the way for Labour to gain their trust. Mizzi was also pivotal in lending credibility to Labour’s energy plans before the 2013 election. This double-act could have regaled Muscat his two super-majorities in both 2013 and 2017, helping him to avoid the fate of Alfred Sant’s weak and short-lived government. In short, the trio are in this together right to the very end. But is Muscat creating a system that can outlast him, or will a new Labour leader have to clean up the Augean stables?

2. The end is near, anyway

Muscat’s inaction at this particular juncture is tied to his decision to quit politics some time after next year’s MEP election. If that is the case why should he turn against his closest allies just months before quitting? The latest revelations may have a greater bearing on who Labour will choose as the next leader than on Schembri and Mizzi’s fate. Will they choose someone who will ditch them, or someone who keeps them or replaces them with similar characters? Deputy PM Chris Fearne is a district rival of Mizzi and has already had the experience of having to clean up the mess Mizzi left behind after he sold public hospitals to an offshore company. If they feel threatened, how will Schembri, Mizzi and their allies react?

3. Elementary electoral math, my dear

Muscat probably thinks he has more to lose by ditching Keith and Konrad, than by keeping them on board. After all he still won an election with a 35,000-vote margin after Panamagate and the Egrant allegations. He has very little to fear in terms of loss in electoral support now that the Opposition is still in chaos. Neither has any internal party critic emerged to represent those Labour voters who feel frustrated by the situation. Muscat’s tight grip on the party ensures that this segment of the electorate has still not found a reference point. Neither has Muscat much to lose in terms of a future job in Brussels simply because such hopes were already dashed by Daphne Caruana Galizia’s assassination.

Tourism Minister Konrad Mizzi (Photo: James Bianchi/MediaToday

4. Scandal fatigue

Buoyed by his absolution from the Egrant affair, Muscat banks on public fatigue with scandal and a climate of mistrust in the fifth estate that is itself fuelled by the Egrant allegations. 17 Black is actually backed by evidence, corroboration of sources and the terse non-denials of the protagonists, but Egrant made a large segment of the electorate immune to further ‘news’ related to the same protagonists of Panamagate – despite the seriousness of the new evidence, it is now perceived as yesterday’s news by many. Labour’s media machine has been very efficient in giving the perception that this is just another allegation as Egrant was, rather than a case based on new substantial evidence.

5. Business is booming

Historically corruption has never been an election-winner. The outcry against corruption only resonated in 1987 and 2013 simply because it coincided with an economic downturn and a yearning for change after a long period of dominance by one particular party. Probably had Panamagate occurred in a period of economic decline, Muscat would no longer be in power. People generally get angrier at corruption when they are suffering, but are more compliant when they are prospering.

Prime Minister Joseph Muscat

6. Muscat is implicated

Some still suggest that Muscat does not sack Mizzi and Schembri because he is personally involved in their shady business.

These doubts are demeaning for a politician like Muscat who is known to have ambitions of statesmanship and who cares about his legacy. Unlike Egrant – in which Muscat took the matter to a magistrate – it is Muscat’s lack of political action that keeps all sorts of conspiracy theories alive. Insiders point out that the wilder these conspiracy theories are, the stronger Muscat becomes. Indeed, by constantly raising the stakes by endorsing unproven allegations, former PN leader Simon Busuttil had often given Muscat space for manoeuvre to turn the tables on the Opposition. In this sense Muscat’s offer now to resign if implicated on any wrongdoing on 17 Black may betray Muscat’s disappointment at the fact that this time around, the Opposition was more prudent in its approach, asking for the resignation of Schembri and Mizzi and not of Muscat.

But have we now reached a point where questions on Muscat’s personal role in this saga become unavoidable? People are justifiably baffled by Muscat’s declaration that he does not “interfere with his chief of staff’s business affairs” when asked whether he had questioned Schembri on 17 Black: his statement that he will rein him in only if implicated in any “wrongdoing” does not absolve him from his own political responsibility to take action against government officials for their actions while in office.

The PM owes the country an explanation on when he learned about his closest allies’ offshore interests and dealings. For apart from a judicial truth, a political truth still needs to be established on Panamagate. Muscat may be banking on people getting tired of hearing about the same things. But he also keeps on denying them closure.

This article first appeared in MaltaToday's Sunday print edition and was written before it was known that the police had requested a separate magisterial inquiry into 17 Black.