Muscat and Schembri’s reputations are intertwined

Prime Minister Joseph Muscat has, whether he likes it or not, has tied his personal reputation to that of Keith Schembri.

Keith Schembri is at the heart of the Panama Papers scandal, and has been right from the very beginning. The Panama Papers found that Keith Schembri had acquired a company in Panama called Tillgate Inc. He also owned a British Virgin Islands company called Colson Services Inc, which along with companies belonging to Adrian Hillman and businessman Pierre Sladden, used to hold shares in a Cyprus-based company. Now Mr Schembri has been accused by Opposition leader Simon Busuttil of receiving kickbacks through an account belonging to Brian Tonna’s BVI-incorporated company for the sale of citizenship. Mr Schembri alleges that these payments were for a loan he had given Mr Tonna back in 2012.

The fact that Keith Schembri held companies in such jurisdictions casts a shadow over his reputation and, as such, has cast a shadow over the Office of the Prime Minister. Despite the negative publicity – both locally, and internationally – the Prime Minister has taken absolutely no action against his chief of staff, who he personally appointed. In fact, he has done the opposite, and by refusing to take action, has defended him.

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All Dr Muscat has said is that if Mr Schembri is placed under criminal investigation, then Mr Schembri would have to step down. However, should this happen, then questions about the tenability of Muscat’s own position will be raised, especially given that he seems to pick his friend over Malta’s reputation.

While Mr Schembri has maintained that he has done no wrong and has denied any allegations that might have been related to this issue, questions regarding whether he should remain in his position have been asked many a time. Owning a company in jurisdictions like Panama and the British Virgin Islands sets a bad example in and of itself. All the more so when documents from the Panama Papers show that he pledged to populate a bank account, if given, with at least one million euros each year. By keeping Keith Schembri on, the Prime Minister is basically encouraging other Maltese people to open such structures. In addition, the whole situation has drawn suspicion over Malta’s financial services sector. When asked by The Malta Independent whether he would keep Mr Schembri as his chief of staff if the PL is re-elected to government, the Prime Minister said that the people will choose who to elect to parliament, but the decision on who to appoint on his team is his own.

The people have a right to know if Keith Schembri will still be the PM’s right-hand man (some say the real prime minister) if Muscat wins the election. People who support the Labour government’s economic and social achievements but have a problem with the scandals surrounding it might not be too keen on voting PL again if Schembri is still in the mix. It beggars belief that the Prime Minister has laid out post election plans for Deputy Prime Minister Louis Grech – who will not run for re-election – but says that he has no plans for his closest ally, Keith Schembri – his former classmate who took him out of the Super One newsroom and built him into a strong MEP, then an opposition leader that commanded support from the business community, and eventually Prime Minister.

What the Prime Minister doesn’t seem to grasp – or refuses to do so – is that the members of his team, given the scandals which have erupted over the past few years, play a part in who the public chooses to elect. While the Prime Minister tries to play this as though it were a presidential election – him vs Simon Busuttil – that does not work, as his team is just as important. In addition, by trying to run such a race, he is basically assuming responsibility for all the alleged wrongdoings.