‘The ruling party knew of the plot to kill Daphne Caruana Galizia’

Major players in an alleged money laundering operation first reported by slain journalist Daphne Caruana Galizia were back in court last week as prosecutors began revealing the evidence against disgraced former prime minister Joseph Muscat’s chief of staff and a controversial accounting firm at the centre of corruption scandals during his tenure. 

Police inspectors explained how Keith Schembri, the man many saw as Muscat’s power behind the throne, paid some $5.5million in backhanders to former Allied Newspapers Group Managing Director Adrian Hillman and others to award a multi-million euro contract to his company, which supplied paper and other raw materials to Progress Press, a company within Allied Group, publishers of The Times of Malta. 

Allied Group had issued an “invitation only” call for new printing machines, and Kasco’s offer of US$13 million was accepted following a presentation to the Board by Hillman and Progress Press chairman Vince Buhagiar.  

The machines were bought using offshore companies to avoid tax, and made a US$5 million profit. Investigators found Schembri had created a spreadsheet that detailed how he, Kasco Group CEO Malcolm Scerri, Hillman and Progress Press chairman Vince Buhagiar would be paid off. 

The unexplained deposits into the personal accounts of Hillman and Buhagiar were described as “a clear case of bribery to buy machines from Kasco”.

Investigators also questioned over €20 million in raw materials Progress Press purchased from Kasco between 2010 and 2016.

The range of financial crimes the various individuals are being accused of also includes suspicious transactions between Schembri and Nexia BT partner Brian Tonna, alleged to have come from Malta’s controversial ‘cash-for-passports’ programme. 

Nexia BT representatives with Keith Schembri (from left to right) Manuel Castagna, Brian Tonna, Keith Schembri and Karl Cini. 

While the magistrate who conducted an inquiry into the matter found no prima facia evidence that payments equalling €100,000 were kickbacks, she found Tonna’s claim that the money was a loan repayment was not credible, and that a loan agreement presented to back up the claim had been falsified. 

Inspector Anne Marie Xuereb also described discrepancies in invoices to the Russian individuals who had bought theMaltese (EU) passports. Duplicate invoices were issued by BT International and Willerby Trade Inc, of which Tonna is the Ultimate Beneficial Owner, but because Willerby never traded, it could not have offered the services mentioned in the invoice. 

The inquiry found that Nexia BT’s Karl Cini and Katrin Bondin Carter had created the backdated documents to mislead investigators with regards to financial transactions and to prevent scrutiny after the Panama Papers leak shone a light on Schembri’s offshore companies. 

Despite earlier claims by bail-seeking defence lawyers that all witnesses — including Tonna, Cini and Schembri — had cooperated fully with police, Inspector Xuereb said the men refused to answer questions when interrogated.

Nexia BT has been in the news since the Panama Papers, when it was revealed that the firm opened secret offshore company structures for Maltese officials within hours of Labour’s election to power. 

Despite a steady stream of scandals since 2016, the accountancy board only stripped Tonna of his warrant to practice when he was arrested for questioning in early March 2021. He was reinstated three days later.

Zenith Finance Limited, another company charged with related offences, was still listed as an “authorised” service provider by Malta’s financial services regulator nearly a week after the high profile arrests. 

The prosecution finally asked the court to officially notify the MFSA about the freezing orders, casting yet another doubt on claims by the government of Malta that ‘the institutions are working’.

Court hearings involving the testimonies of hitman Vince Muscat and middleman turned State witness Melvin Theuma also continued last week, but Theuma’s testimony was cut short when the middleman was taken ill on the witness stand. He is recovering from ‘self-inflicted’ abdominal stab wounds and a slit throat suffered while under police protection eight months earlier.  

Vince Muscat gave further insight into the activities of suspected bomb suppliers Robert Agius and Jamie Vella, their travels for drugs and procurement of weapons, adding that he was told Agius “had the power to bring down the government if he was implicated in the Daphne Caruana Galizia murder”.

As if to underline that fear, accused hitmen Alfred and George Digiorgio filed official requests for presidential pardons, offering to name politicians involved in serious crimes, including a former minister and a middleman in the Caruana Galizia murder. 

Prime Minister Robert Abela said ‘every request for a presidential pardon will be handled with the utmost responsibility in the national interest’, but the fact that so many politicians have been implicated raised questions over whether Cabinet should have the power to decide on a pardon for criminals whose ‘get out of jail’ bid involves naming one — or more — of their own colleagues.

The President of the European People’s Party, Manfred Weber, summed it up in a heated debate at the European Parliament last week.

“In Maltese courts, we have the killers of the journalist naming a former Minister as having known of the plot to have Caruana Galizia murdered. Two other killers also mentioned the involvement of ministers. This means that the ruling Party knew of the plot to kill Caruana Galizia.” 

Weber pointed out that there have been no resignations or political consequences despite these shocking allegations. “It’s as if nothing has happened in Malta,” he said. “How is this possible in the EU?”

Will anyone bear responsibility for murdering the journalist, wife and mother who stood up against corruption in Malta? Five of the seven people arrested and charged so far have asked the government for a deal, and two were accepted. 

The Daphne Caruana Galizia Foundation said full justice can only be served if Caruana Galizia’s killers receive the punishment that fits their crime. “Crimes should be solved and criminals brought to justice, but not at the expense of denying Daphne the justice she deserves. She has already given too much for that.”

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