Fact-checking Joseph Muscat’s Egrant fact sheet

While Malta has gone into election mode almost a year earlier than what Prime Minister Joseph Muscat had previously led on, the josephmuscat.com.mt campaign site has produced a ‘fact sheet’ on the allegations surrounding his family on Egrant Inc.

In his ‘fact sheet’, Dr Muscat’s main points are that no evidence has been produced to back up the “wild allegations”, that the information comes from a former Pilatus Bank employee who is constantly referred to as a “Russian” witness or source, that he is not the subject of investigations but the allegations themselves are, and that Dr Muscat called a Magisterial inquiry in the light of the “serious investigations”.

Egrant is the third Panama company named in the Panama Papers scandal which was linked with Malta and Nexia BT, whose managing director is Brian Tonna.

Journalist and blogger Daphne Caruana Galizia alleged, after receiving information from a former employer of Pilatus Bank, the institution allegedly facilitating the transactions, that Mrs Michelle Muscat is the true owner of Egrant, and that one of the daughters of the Azerbaijani president, Leyla Aliyeva, had transferred US$1.017 million through her offshore Dubai company, which has a bank account with Pilatus Bank in Ta’ Xbiex, to Egrant Inc.

The Facts as Joseph Muscat sees them

“This is for you if: You’re struggling to understand the finer details, such as the evidence that has emerged so far (none).”

The tone set is already one of extreme doubt, alleging that so far no evidence has emerged. Mrs Caruana Galizia and the Opposition Leader came under heavy fire for not producing documentation to back up their claims.

Many journalists argue that if a source is deemed to be credible enough, the media’s obligation is to publish the story, describe the evidence, but only hand over proof or information to relevant state authorities.

Stories penned by newspapers have historically, on several occasions, made a claim based on a credible and well-sourced story, doing so by relying on their credibility as a respectable and professional institution. The norm is for the claims to set the ball rolling for a formal investigation to be launched by state authorities, and that media house may hand over any documentation to those same authorities in the course of their investigation.

In this particular case, many would argue against the credibility of Mrs Caruana Galizia due to her opposition to the Labour Party, and have therefore requested that proof be published.

The former employee of Pilatus Bank, at the heart of the investigations, said that she handed over documentation when testifying in the Magisterial inquiry, while Illum, the Maltese-speaking sister paper of Malta Today, had published a story saying that she never provided any proof. The newspaper has no explained how it knows the happenings of a completely confidential Magisterial inquiry whose doors are closed to the public and media.

The public have so far seen an alleged reproduction of declarations of trust which show that Mrs Michelle Muscat is the owner of Egrant, which Dr Muscat has called a completely fabricated piece of text that has yet to be verified.

Calling the allegations ‘wild’ might lead somebody to believe that they have emerged out of thin air. The fact is that a year earlier, it was discovered that Mr Tonna acquired three companies days after the 2013 general election where the Labour Party won by a landslide victory. The fact is he acquired Hearnville Inc for minister without portfolio Konrad Mizzi, Tillgate Inc for the Prime Minister’s chief of staff Keith Schembri and Egrant Inc.

An e-mail leaked from the servers of Mossack Fonseca - the law-firm at the heart of the scandal accused of helping clients to conceal wealth - between Nexia BT employee Karl Cini and a Mossack Fonseca worker named Dr Mizzi and Mr Schembri in relation to their companies. It also said that Nexia BT would not be the ultimate beneficial owner of Egrant Inc, and that the name of the individual would have to be spoken about via Skype, and not written down on an e-mail. This particular e-mail has led people to wonder who could be more sensitive then PEPs (politically exposed people) Konrad Mizzi and Keith Schembri.

In an investigative story with Lovin Malta, Mr Tonna provides documentation which he says “unequivocally proves” that Egrant Inc is and was always his, and that there was no transfer in shareholding to the nominees allegedly set up to conceal the identity of Mrs Michelle Muscat. The web-portal does clearly state and explain how the documents provided so far do not fully exonerate Mrs Muscat, however it is awaiting further documentation.

“To preserve Malta’s reputation and clear his name and that of his family, the Prime Minister has asked a Magistrate to investigate the allegations”.

While this statement is true, it has failed to mention that the inquiry was requested after Net TV crew had captured the Chairman and risk manager of Pilatus Bank leaving the building at around 9pm, at the height of the allegations, through an emergency exit holding luggage. The bank employees claimed no wrongdoing and that he had flown into Malta that day, however an inquiry was launched following this damning footage.

Asked by The Malta Independent whether he would be launching an inquiry into Pilatus Bank on the day the allegations were made, the Prime Minister said God forbid the state starts to interfere in the financial services sector.

“Contra to what other websites have alleged it is the ALLEGATIONS made by the trio and NOT the Prime Minister that are being investigated”.

The “trio” refers to Dr Busuttil, Mrs Caruana Galizia and the former Pilatus Bank employee.

This statement is correct, the nature of the Magisterial inquiry investigates the allegations being made, which involve the Prime Minister, but is not an investigation of the Prime Minister himself.

“It’s not that simple. In order to create an international company in a foreign jurisdiction, business people use a complex network of financial institutions across the globe and financial services”.

This first statement is not fully true, in the sense that without that massive leak of 11 million documents from the servers of Mossack Fonseca, the world would have had no idea about the extensive network of secret companies, trusts and bank accounts. Malta would have definitely remained unaware of Konrad Mizzi and Keith Schembri’s holdings, unless it is to be believed that Dr Mizzi would have gone through the complicated bureaucratic process of setting up an offshore Panama company, designed for maximum secrecy, only to declare it in his ministerial declaration of assets.

With regards the assertion that the transfer of $1 million into an account held by Mrs Michelle Muscat, the verdict is still out on this one and it would be best to let the specialists and authorities confirm this.