Journalists shed light on another of Daphne’s investigations as court cases drag on

Corrupt politicians in Malta could be forgiven for thinking that last week’s exposé of the country’s cash-for-passports program was another example of Daphne Caruana Galizia striking back from the grave.

The slain journalist was the first to investigate the government’s plan to sell EU citizenship when she was approached by a whistleblower in 2013 with inside information on the scheme. 

The whistleblower vanished after Caruana Galizia was killed with a massive car bomb in October 2017. If Malta’s most prominent journalist could be murdered in broad daylight then what could be done to them?

Daphne’s three sons tried to track down the source but it proved impossible. Besides, the passport program was the least of their worries. The journalist was facing 48 libel cases for defamation at the time of her death, all brought against her by the subjects of her reporting on corruption, most of them public officials. The libel suits needed to be fought in court and those who killed her pursued, despite Joseph Muscat’s efforts to consider the arrest of the hitmen ‘case closed’.

Caruana Galizia’s three sons formed The Daphne Caruana Galizia Foundation to carry on the journalist’s work with the support of independent newsrooms. And when the passport whistleblower got back in touch, we were ready to continue the investigation that one intrepid woman with a laptop had begun on her own.

The Passport Papers reveals the truth behind former prime minister Joseph Muscat’s pet program. 

Muscat told Bloomberg Business Week in late 2013 — just months after his election to power — that he was “interested in bringing in all those reputable people, who are willing to take up residence in Malta”. He clarified that “due diligence and choosing the right type of person will be paramount.”

Daphne Caruana Galizia was the first to realise something wasn’t right. She published quotes from the interview on her blog and later published details of the scheme that had been strategically hidden in the Government Gazette. She said it revealed that Muscat’s government was planning to sell passports for cash.

It wouldn’t take long for her claim to prove true. Muscat went to Brussels in January 2014 with Christian Kalin, CEO of a firm called Henley & Partners, to tell a shocked European Commission that Malta would sell EU passports for a base price of €650,000, plus €25,000 each for dependents, and €150,000 in government stock redeemable after five years. 

There was little the EU could do to stop him. Passports were the property of the issuing country. 

The Commission insisted Malta’s so-called Individual Investor Program must include real ties to the country. The compromise they ironed out included the obligatory purchase or rental of property for a five-year residency period — but as Daphne Caruana Galizia found out, there was no shortage of people willing to rent empty basement flats in obscure villages to a Russian oligarch, a Saudi royal or rich Middle Easterner they would never see. 

Malta was also required to publish the names of passport buyers. They complied, but printed them alongside those of naturalized citizens, with no way to differentiate between the two. The list was also alphabetized by first name to make it even more difficult for journalists to link members of the same family who purchased citizenship en masse.

The Maltese passport quickly became one of the most valuable in the Henley & Partners’ portfolio, a clear cut above St. Kitts & Nevis, and European fringe State Moldova. It was a lucrative deal for the tiny island nation, too, with reported revenues of over €1 billion in the first 18 months.

By 2016, passport sales accounted for 2.8% of the Maltese economy.

But as Daphne Caruana Galizia repeatedly warned, all was never quite as it appeared.

The Passport Papers leak revealed that the concessionaires were approving clients “in principle” before the program was even launched.

Henley & Partners sent a circular to staff notifying them of the concession contract with the government, and advising them they could start pitching to clients, begin the application process, and take money from them before the project was launched. 

The residency requirement would prove just as flexible. The checklist discovered by journalists used to determine an applicant’s ‘genuine link’ to Malta included items like joining a club or signing up for a mobile or internet plan. 

Applicants could earn 50 points by donating €10,000 to a charity of their choice, and 100 points for buying a property. That accounted for the largest portion of the 220 points required for a pass. And contrary to what Malta told the EU, applicants didn’t even have to live there.

Most of the applications to buy Maltese (EU) citizenship came from countries that prohibit holding dual citizenship. In the first years of the program, 1,300 of the 2,325 submitted came from Saudi Arabia, China and Russia. 

Maltese officials were always happy to help. Clients were advised to discuss issues in “face-to-face” meetings with the CEO of the Malta Individual Investor Program at the time, Jonathan Cardona.

And a Saudi prince was able to keep his name from appearing in the annual publication of new citizens in the Government Gazette, despite Maltese laws, after a meeting with disgraced former prime minister Joseph Muscat

Replying to questions, Henley & Partners said: “Ultimately it is the responsibility of the countries involved to investigate and vet applicants. As a private company, we are neither required by law to do so, nor do we have access to the same level of background information, contacts and resources that government authorities have”. 

Henley & Partners was no stranger to Daphne Caruana Galizia. CEO Chris Kalin consulted with the Maltese government over his company’s intention to sue the journalist to silence her stories about the firm. Former Prime Minister Joseph Muscat had replied, “I don’t object”. And his chief of staff Keith Schembri said, “Thanks, Chris. This looks good”. 

When asked about the email exchange in a video conference with the European Parliament’s delegation investigating the rule of law in Malta on 14 March 2018, representatives from the firm (including Kalin) said they only sue Maltese journalists if they get an ‘OK’ from the government. 

The Passport Papers exposé should put the final nail in the coffin of a program the EU says undermines the integrity of the status of EU citizenship. But this is far from the only battle being fought by the family of the murdered journalist.

The men accused of planting and triggering the bomb that killed Caruana Galizia, George and Alfred Degiorgio, had their request for a presidential pardon rejected last week. The family had objected to the pardon, arguing that “past crimes should not be cashed as currency for killers to buy their way out of justice for murder”.

Five of the seven people arrested and charged in connection with the assassination have asked the government for a deal, and two were accepted. The middleman in the plot, Melvin Theuma was granted a Presidential pardon in exchange for revealing everything he knew. Yorgen Fenech, the man Theuma said had ordered the hit, also tried to strike a deal, offering to implicate others, including former chief of staff Keith Schembri. Fenech’s request was rejected.

Vince Muscat, the Degiorgio brothers’ accomplice, took a different approach. He was given a 15-year sentence after pleading guilty in a deal with prosecutors that will see him provide information on the Caruana Galizia case and on the unrelated killing of a lawyer. The hitman has since tried to negotiate pardons for three more crimes, one of which allegedly involved a former minister and a sitting politician.

As for the police, they seemed helpless to solve any of the crimes these career criminals are queuing up to spill the beans on in exchange for ‘get out of jail free’ cards for the murder of a journalist. 

But the police have problems of their own. Both disgraced former commissioner Lawrence Cutajar and deputy commissioner Silvio Valletta have been named in connection to attempts to derail the investigation into Caruana Galizia’s murder, and into the political corruption she exposed.

These cases will drag through the courts for years. In the meantime, journalists will continue to support the Daphne Caruana Galizia Foundation in keeping her stories alive, until justice has been attained for her and her work. 

The following project is weekly Maltese Roundups prepared by The Shift News (Malta) offering the latest news in Daphne Caruana Galizia case.