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EXPLAINED: Keith Schembri’s Passport Kickbacks Inquiry And What The AG’s Refusal To Publish Its Details Could Mean

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Public opinion on Malta’s newly-appointed Attorney General Victoria Buttigieg is already turning sour following her decision to ban the publication of any part of the inquiry into corruption allegations between the disgraced former Prime Minister’s chief of staff Keith Schembri and Nexia BT’s Brian Tonna.

A three and a half year long magisterial inquiry will be kept from the public and the interested parties for now, while questions will persist over continued inaction against government corruption.

Here’s what we know about the case so far:

1. What is the magisterial inquiry about?

According to a leaked report by the Financial Intelligence Analysis Unit (FIAU), Tonna transferred two €50,000 payments through Pilatus Bank to Schembri.

Schembri is facing allegations that the payments were kickbacks related to the sale of Maltese citizenship to a family of three Russian nationals.

Then-PN Leader Simon Busuttil spearheaded the claims, launching the request for an inquiry in April 2017.

Busuttil initially took the claims to the Egrant inquiry. However, the magistrate decided to initiate a separate inquiry, carried out by magistrate Natasha Galea Sciberras.

Busuttil has made it clear he will publish the Schembri-Tonna inquiry if he is granted access to the inquiry.

2. What did Keith Schembri and Brian Tonna say?

Both men have denied any wrongdoing, with Schembri claiming that the €100,000 was the repayment of a personal loan given to Tonna while the former underwent separation proceedings.

The loan was repaid through Willerby Trading, a British Virgin Islands shell company secretly owned by Tonna.

The same FIAU report also raised suspicions of the loan document presented to the bank to justify the payments after finding no trace of the original loan payment by Schembri to Tonna.

3. What is a magisterial inquiry?

A magisterial inquiry is used to investigate suspected crimes which carry a prison sentence of three years or more.

A magistrate cannot open up such an investigation on their own accord, but must receive a request from the police or private citizen to do so.

An inquiry does not establish whether or not a person is guilty. Its primary function is to collect evidence and see whether there is enough to issue criminal charges.

In its entirety, an inquiry will run through every detail lifted from the investigation, including certain loopholes or procedural errors they find on their way. It ends with a magistrate’s conclusion as to whether they believe a crime could have been committed.

4. Can a magisterial inquiry be made public?

Maltese law makes it clear that magisterial inquiries are absolutely confidential, with their hearings taking place behind closed doors.

The Attorney General is granted full discretion on whether or not an inquiry can be published.

5. So what happened with Egrant?

Malta’s former Attorney General Peter Grech was staunchly against publishing the Egrant inquiry in full. He did, however, make the principle conclusions public.

The inquiry exonerated the former Prime Minister Joseph Muscat’s wife Michelle as the owner of the infamous Panamanian company.

However, Muscat, who requested the inquiry, was granted access to the document along with several of his inner circle.

It was eventually made public, with PN Leader Adrian Delia taking the battle to the courts to ensure its publication and remedy a political imbalance created. He immediately published it when the courts ruled in his favour.

6. Does the AG’s decision mean Keith Schembri is not guilty?

No. The AG did not clarify whether or not charges will be filed. Buttigieg simply said that the inquiry was concluded “at this stage” and will not be releasing any part of the inquiry.

Schembri, it should be noted, remains under investigation for a litany of offences linked to the assassination of journalist Daphne Caruana Galizia.

It could be that police and the magistrate are merely playing a waiting game before striking with full force against Schembri. Sources have suggested that laws on discretion would force investigators’ hands on other cases.

7. What other inquiries are on the way? 

With so many other corruption allegations bogged down in lengthy magisterial inquiries, it’s easy to forget how many are actually underway.

Schembri himself is subject to two other criminal inquiries.

The first involves another leaked FIAU document detailing how Schembri filtered over €650,000 to former Allied Newspapers managing director Adrian Hillman in over 30 “suspicious transactions” between 2011 and 2015.

Hillman was also found to have deposited €225,000 in cash into his personal HSBC account between January 2011 and February 2016.

Schembri is also subject a magisterial inquiry over his involvement in the Panama Papers scandal, with particular focus on his role, as well as that of disgraced former Minister Konrad Mizzi.

Their Panama accounts are linked to 17 Black, the Dubai-based company owned by Yorgen Fenech, the main suspect in the Daphne Caruana Galizia case.

A report by the FIAU found that 17 Black had received at least three payments – one of €161,000 from Maltese local agent for the tanker supplying gas to the LNG power station and two separate payments amounting to €1.1 million through ABLV Bank by an Azeri security guard.

Malta’s Attorney General might be reluctant to let the public know but this will not kill the omnipresent issue.

Should the Attorney General publish the inquiry? Comment below

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