Chairman of PANA Committee says Mizzi’s situation is not clear, ‘but it looks like money laundering’
Pana Committee Chairman Werner Langen said that Minister Konrad Mizzi’s situation regarding his Panama company looks like money laundering but stressed that things are not clear at the moment. In comments to The Malta Independent, the chairman said that there “was a fair and free discussion with Minister Mizzi, but all documents in the Panama Papers create doubts whether it is not money laundering. This is the problem. But we need clarification, improvement, and a discussion. It is not clear at the moment, but it looks like money laundering.”
Mizzi, he said, made it clear that his set-ups were for his family affairs, adding that they must look at this over the entire time period and in context. “We must be extremely careful before drawing any final conclusions over what it actually means.”
He said there isn’t any documentary proof of money laundering, and we require more information before drawing conclusions.”
He was addressing a press conference with co-rapporteur Jeppe Kofod following their meetings with Maltese investigative authorities, PEPs intermediaries, and others.
Mr Langen said that they had been conducting interviews for the past eleven hours, and stressed that this was a fact finding mission, to understand how national legislators and supervisors have reacted to the Panama Papers, what lessons have been learned and so on.
The Panama Papers are based on the largest information leak in history, where 2.6 terabytes of confidential information was leaked, containing 12.5 million documents. The data was made published by the ICIJ, and The Malta Independent was a media partner.
“Tax evasion and money laundering affects each and every EU citizen and the problem knows no borders. It can only be solved in joint efforts as money will always flow to secrecy as long as this exists. The Pana committee is to investigate all maladministration of EU law,” Chairman Langen said.
Turning to OPM chief of Staff Keith Schembri, he said that he was given a letter by hand regarding his response to the invitation letter which was sent last January. “In this letter he says he is not a politician but holds a position of trust, and also doubts our mandate. We have a mandate by the majority of MEPs in the European Parliament. It is not possible for us to accept this.”
The committee began its investigations around Europe on September 2016, through hearings with journalists, authorities, EU Commissioners and others.
The committee is holding hearings with intermediaries, and through fact finding missions to Malta, the UK, Luxembourg and the USA.
“The conclusion of the investigation is expected in July, but we will request an extension to November. It is too early to present conclusion and recommendations, but so far the Panama Papers shed light on unacceptable levels of secrecy for tax avoidance, evasion and money laundering. We held eight meetings today, with the Finance Minister for 90 minutes, followed by the tax compliance unit, the MFSA, the FIAU and Police Commissioners, four journalists, intermediaries, law firms, tax advisors and banks, and at the end we met two PEPs, Minister Konrad Mizzi and PN Deputy Leader Beppe Fenech Adami.”
“We don’t have any final results and we are not part of an internal political discussion.”
Co-rapporteur Kofod, said that the Pana committee was here on a fact finding mission, looking at tax evasion and money laundering legislation, and how the EU can fight loopholes in legislation.
“It has been a productive visit and, as you know intermediaries played a huge role in the Panama Papers and so we spoke with them.”
“Tax avoidance agenda is huge on the EU scene.”
Asked for their preliminary assessment of Malta’s tax system, they said that the Committee will need to evaluate what was discussed today, and said that the committee will look at the tax system, in the sense of how different EU regulations are being implemented and enforced.
He added that the committee held a good meeting with Finance Minister Edward Scicluna. He mentioned that Malta has beneficial schemes for corporate taxation, which they would want to further investigate, but stressed that they do not have any conclusions yet.
Asked whether any reference was made regarding the prosecution of Minister Konrad Mizzi, the chairman said that he cannot speak about specific cases.
Also asked whether they were pleased with how the Maltese authorities handled the situation, they said that they recognise that there is a procedure, which leads to whether there is a criminal situation or investigation, and a decision is taken by the Commissioner of Police.
Greens MEP Sven Giegold said that former FIAU Director Manfred Galdes said that a number of prosecutions and money was frozen due to suspicious transactions reported, but that this number was low. My conclusion is that those working in public and those in the private system on either political side are too close to one another.”
S&D MEP Ana Gomes brought up a separate situation, involving former PN MP Noel Buttigieg Scicluna, regarding his work as an intermediary regarding the Angolan President’s family, and said that she believes there is corruption there. This case is linked to allegations that the daughter of Angola’s president, Isabel dos Santos, uses Malta shell companies to hold her major interests in state-owned diamonds, banking, and telecoms.
It is too early to present conclusion and recommendations, but so far the Panama Papers shed light on unacceptable levels of secrecy for tax avoidance, evasion and money laundering
As expected and amply predicted, the results of an independent audit into Konrad Mizzi’s trust and company structure was published yesterday, an hour after the minister handed it to the PANA committee investigating the Panama Papers scandal.
The auditing firm, according to the Department of Information, issued its opinion that the financial statements of the structure were presented fairly, in all material respects and in accordance with accounting policies.
The auditors have confirmed that the evidence that they have obtained was sufficient and appropriate to provide a basis for their audit opinion. It is confirmed that:
• The trust structure was registered with the New Zealand tax department in 2015;
• The structure is solely intended as a family trust;
• There have been no trading activities undertaken by both Rotorua Trust and its fully owned subsidiary Hearnville Inc;
• No bank accounts were held by the trust and company.
Minister Konrad Mizzi yesterday addressed the Pana Committee, explaining that this structure was always intended as a family trust for assets and investments.
He said that he had notified the establishment of the structure at the first available opportunity, which was the Ministerial Declaration of Assets.
He explained that part of the services offered to him by the service provider were to make enquiries on the setting up a bank account. However, he did not open a bank account and did not give power of attorney for a bank account to be opened on his behalf. In fact, no bank account was opened.
Minister Konrad Mizzi stated that the setting up of this structure was used by the Opposition in a concerted campaign of character assassination against him.
Mizzi said that he felt that he should attend the Pana Committee and give his version of events, even though some of its members have already publicly pronounced themselves about this case with politically-charged statements. This is regrettable especially given that the remit of this committee is to investigate alleged contraventions and maladministration in the application of Union Law in relation to member states and not individuals.
He explained how the leader of the Opposition used parliamentary privilege to make baseless defamatory allegations against him without offering any proof to his allegations.
Minister Konrad Mizzi also referred to false allegations with respect to contracts related the Electrogas consortium, the same contracts which were reviewed and approved by the European Commission and hence removing any false doubts or speculations raised by the Opposition.
Members of the Opposition have also lied with respect to the Shanghai Electric Power investment in Enemalta which has led the company to be in a much stronger financial state.
Minister Mizzi also explained that some members of the press published false allegations as part of the Opposition’s character assassination campaign targeting him. He referred to an article claiming that he did not indicate that he was a Politically Exposed Person. On this specific case, the journalist who wrote the article claimed under oath that the headline was changed to a misleading one by the editorial team.
Another false allegation made by the press was that Minister Mizzi did not claim that his structure was set up for “estate planning.” This time, the journalist penning the article admitted that he overlooked the whole document with “estate planning” ticked, although the document had always been part of the Panama Papers database.
The minister said that the Opposition made unfounded allegations on millions allegedly earned by him before his political career, and made up stories on Gasol’s transfer of shares, amongst others.
Minister Mizzi stated that he was the only politician in Maltese history requesting both an independent audit and a tax audit to be performed on his assets and structure, since he was confident that he acted in good faith throughout. He said that the independent audit published today clearly demonstrates this.
The audit was carried out by Crowe Horwath International, one of the largest public audit and accounting firms in the world. Crowe Horwath is one of the top 10 global accounting networks and has won various awards including best financial advisory company global in 2016.
Minister Mizzi also announced that he started the process to wind up the company.
Nationalist Party reaction
In reaction, the Nationalist Party said that no audit will replace an investigation by the police or the FIAU, the agency set up to investigate fraud and money laundering. The Maltese people do not want useless audits but to see what the FIAU investigation led to and what steps are to be taken by the police against Konrad Mizzi and Keith Schembri.
No audits justify the corrupt plan that Keith Schembri, Konrad Mizzi and the Egrant owner to open companies in Panama, in which they were to place one million euro a year from commissions. These companies were opened five days after the last general election, the PN said.
The latest lies put more pressure on the Prime Minister to take all necessary steps against Mizzi and Schembri, the PN said.