Bankers who want to deceive ind ways of doing it, former MFSA chief says

We used to meet in public, for coffees and meals and so on without incident. In the last years before she was killed there was tension. She was recognised. We were photographed, they ended up in the media, I was drawn into that as well just by virtue of being her friend

Bankers who want to deceive will find a way of doing so, and this is not necessarily picked up by companies supervising their operations, Andre Camilleri, former director-general of the Malta Financial Services Authority (MFSA), said in court today.

He was testifying in the public inquiry into the murder of journalist Daphne Caruana Galizia.

Former judge Michael Mallia is chairing the inquiry board, while Chief Justice Emeritus Joseph Said Pullicino and Judge Abigail Lofaro are the board’s other two members. The inquiry’s terms of reference stipulate that it must be concluded within nine months since its start last December.

Camilleri said he worked at the MFSA between 1994 to 1996 and then from 2002 to 2014, at which point he retired. He was initially the Chief Executive and later Director General of the Financial Services Authority. Compliance and money laundering was not his direct responsibility.

There was strict segregation between the council and the board of governors (political appointees) and no interference was ever encountered by him, Camilleri said.

The witness remarked that he was involved in the licensing of Pilatus Bank. “I assume that the board has a copy of the dossier on Pilatus bank.” They did not.

Up to 2002, the Central Bank was in charge of licensing entities. It was only after this time that the MFSA would issue the licence. The decision for the withdrawal of the banking licence would come from Frankfurt, not Malta.

Seyed Ali Sadr Hasheminejad, owner of the now defunct Pilatus Bank, had two asset management licenses from Switzerland. This is not an easy jurisdiction to get it from, Camilleri remarked. After consulting with the Banking Act at the time, the council saw there was no reason to deprive him of the licence. But the licence is just step number one, he said. Every day, a bank must be in compliance with various national and international regulations.

In Malta, there are 26 banks registered, of which only 6 offer services to the local public. The others were here to be like a pied-à-terre in the eurozone. The witness cannot recall whether the bank had told them about Azeri clients, but said that if there had been anything wrong at the time, Pilatus Bank would have not been given licence.

He confirmed that Ali Sadr Hasheminejad was introduced to Malta by audit firm KPMG.

Asked about Sai Mizzi or Brian Tonna, he said that they had not registered with him during his time. “Not even as directors,” he said. There was no register of business introducers at the time.

The witness remarked that supervisory visits to banks would take place regularly and could last up to two weeks.

He was asked about the alleged double accounting system at Pilatus bank. “Whoever wants to deceive will find a way to deceive and this may not necessarily be picked up by the supervisor. This becomes the responsibility of the Auditor of the bank. If shortcomings are found, he risks losing his licence to audit. I don’t know if this was KPMG,” he added.

Audits are available to the public on the company registry website, the witness explained. A bank, in its earliest days, can have deficiencies, Camilleri continued.

Going back to the dossier on Pilatus Bank, the witness said it shows what happened: meetings, inspections, deficiencies and references to FIAU.

Daphne’s sister, Corinne Vella, testified before Camilleri. She presented research she has done, including a doctored image from an artwork with Daphne’s face which was found on Neville Gafa’s Facebook. “I cannot find any earlier instances,” she said.

On the ‘Saħħara tal-Bidnija’ title, she says that it was traced back to Lino Cassar, who used the term as a compliment - in the sense as an “enchantress”, explains Vella. The source of the negative interpretation was difficult to trace, she says.

Vella said that as time passed, the term sorceress was transformed into a witch, associated with a person being old, ugly and using black magic. Vella told the board that she had found an obituary by then PL Deputy leader Toni Abela, where the term “witch” was used.

Two friends of the late journalist, Glorya Beacom and Petra Caruana Dingli, testified next.

Petra Caruana Dingli said she was a close friend of Caruana Galizia for 25 years. In the years before Caruana Galizia was killed, the public reaction to her work became much more tense, she said.

“We used to meet in public, for coffees and meals and so on without incident. In the last years before she was killed there was tension. She was recognised. We were photographed, they ended up in the media, I was drawn into that as well just by virtue of being her friend.”

Caruana Dingli, a columnist for the Sunday Times, said that in 2016, the attacks had changed and Caruana Galizia herself had felt that her adversary was no longer her equal, but the government. “You can no longer gauge the size and power of your adversary. It is quite intimidating. She felt the pressure,” said the witness.

Glenn Bedingfield’s blog was one aspect, although the critics were not just one individual, she said. “In May 2016, we had gone to lunch in Valletta and there were two men who were clearly photographing and filming us.” This ended up on the blog, she explained.

She said that what upset Caruana Galizia the most was the fact that it was in the open and was based at the Office of the Prime Minister (OPM). The Prime Minister, Joseph Muscat, was implicitly endorsing it by allowing it to remain online.

“Being something which was originating from the OPM, there is the whole machinery of government and you can no longer gauge the strength of your adversary,” Caruana Dingli said.

Answering a question from the board, she said that she noticed the atmosphere had changed and there was more pressure around 2016 when the stories became riskier and heavier, while also acknowledging that the attacks on Caruana Galizia became more personal and it was clear where they were originating from.

Caruana Dingli quoted from an article Caruana Galizia had written in The Malta Independent, in which she described Glenn Bedingfield’s website as “the Prime Minister’s own project.”

“When he (Bedingfield) set up a website which he used to harass, insult, denigrate, smear and intimidate critics of the government he serves, and other such ‘enemies of the state and the people’, you should have been left in no doubt that he did it in consultation and conspiracy with the Prime Minister himself,” Caruana

Galizia had written.

Daphne was threatened at home and her dogs were poisoned and had suffered an arson attack, but she had not expressed a fear of being physically harmed to Caruana Dingli, the witness continued.

Glorya Beacom took the stand next. She said that, in March 2013, “I had gone to Mdina for lunch and had bumped into Peter Caruana Galizia and Daphne and had gone to the Rabat feast.” They had weaved through the crowd and realised they had lost a part of the group, including Daphne.

They walked back towards Mdina and found a crowd of people on the side and a woman standing in the middle screaming obscenities at this doorway.

“Oħorguha minn hemm, oħorguha minn xagħarha, dik mara hazina,” were some cries heard, Beacon said. (Get her out of there, pull her from her hair, she’s a bad woman).

There were a couple of priests at the door. Beacom claimed to have ascertained that Daphne was behind the door and she had informed the police.

This was an occasion where Caruana Galizia had had an altercation with then Żurrieq mayor, Ignatius Farrugia. Caruana Galizia had taken refuge at the Franciscan convent from people who had been harassing her.

Beacom mentioned another episode: On another occasion, Daphne had told her that she had gone to a beach club and had come out of the sea to find a person photographing her on a mobile phone. “Things were getting... you didn’t need to say anything, it was visible,” Beacom said. “Driving to work and seeing a billboard with Daphne’s face on it and you think: Why is she there?”

Later on, the slain journalist’s friends started to be targeted, leading to Caruana Galizia avoiding their company. She had said it was not fair on them to be put in the limelight because of their friendship. “The saddest thing is that besides her journalism, there was so much more to her,” Beacom mused. “She loved travelling, talking about food and music. There was her journalism, but she had a life besides that. If you needed to buy a gift, she was the perfect person to call.”

Daphne hadn’t told her friends that she felt threatened. “She wasn’t the type to sit down and gossip about it. If she felt threatened she would write about it,” Beacom said.

The next sitting will be on Friday at 11am. Ray Barbara, a close aide to former prime minister Joseph Muscat, and Kenneth Camilleri, one time part of Muscat’s security detail, will testify.