Government to consider launching second round of passport sale scheme
Henley and Partners also receiving commission from sale of government bonds - Azzopardi
The government will consider whether to launch a second Individual Investor Programme once the current citizenship-for-sale scheme is fully taken up, Justice Owen Bonnici has said.
Dr Bonnici was being interviewed by PBS Head of News Reno Bugeja on Dissett yesterday evening.
The controversial IIP, which was famously amended four times, including with the inclusion of a residency requirement, was capped at 1,800 main applicants. It has so far been understood that the IIP would be a one-time thing. But when asked by Mr Bugeja if the government would extend the programme beyond its first round Dr Bonnici said: “We are halfway into a good job and you are asking me if we will launch another round when this one is over. We will do everything we can to ensure that the current job is a success. When we reach the end of this programme we will discuss whether there will be another one.”
Minister ‘lied to Parliament’
In the first half of the talk show, Shadow Justice Minister Jason Azzopardi said the recently published IIP Regulator’s report had uncovered a new “scandal”. Dr Azzopardi said Henley and Partners, the concessionaires of the IIP, were being granted a 4% commission on government stocks they sold to applicants.
Apart from paying €650,000, applicants have to purchase the mandatory €150,000 in government stocks and buy a property worth at least €350,000 property or rent a property for a minimum of €15,000 per year.
“These scandalous facts uncover this government’s, and indeed the Minister’s deceit. Owen Bonnici came before the Parliamentary Accounts Committee and told us that Henley and Partners was only receiving a 4% commission from the €650,000 and nothing else.”
Dr Azzopardi said the government had decided to give another gift to Henley and Partners, which he said was one of the companies “involved in the famous PL HQ fourth floor meetings” before the 2013 election.
“Which government in the world with a shred of decency that gives commissions to foreigners on the sale of its own bonds?”
When Mr Bugeja pointed out that all stockbrokers charged a fee for their services, Dr Azzopardi said Henley is not licensed as such. “As a result the government is in breach of financial services laws. This is scandalous and it is unfair on stockbrokers.”
PN will not extend IIP
Dr Azzopardi said the PN was still against the IIP in principle and, if elected to government, would not extend the programme. “Some things are just not for sale.” He said, however, that at the current rate the programme would not last until then and the 1,800-person capping would be reached before the election.
The PN shadow minister questioned how the money generated from the sale of passport was being spent. “Have you seen a single rubble wall that has been built with IIP funds,” he asked the presenter.
“The €300 million are, according to the report, being held in a suspense account. There is no mention of such an account in the law. Do we know who is receiving the interest on €300 million? Could it be that this account belongs to Henley as well, and that it is taking these millions in interest?”
He also pointed out that IIP sales accounted for 3% of GDP and questioned whether this situation was sustainable.
‘We are incentivising them to attract investment’
Reacting during the second part of the programme, Justice Minister Owen Bonnici denied the suggestion that the government was subsidising Henley and Partners. “The government wants to attract investment and it is willing to give them €4 from every €100 they bring over. This is an incentive to the concessionaire to bring in investment.”
Dr Bonnici said it was not true that the country was registering economic growth as a result of the IIP and insisted that this growth was being registered across the board.
Asked about the apparent lack of enforcement on residency, Dr Bonnici said it was untrue that Malta was failing to adhere to the rules and said it was actually going over and above what the European Commission had instructed. “We said right from the outset that we wanted applicants to form a genuine bond with the country. This does not necessarily come from residency in Malta. One way in which they are developing a genuine link is the fact that they have given, out of their free will, over €1 million to philanthropic groups.” He said Heritage Malta was one of the organisations that was making use of these donations.
Dr Bonnici said he had met with some of the successful applicants after they were granted citizenship. “These are high net worth individuals. They lead lifestyles we can only imagine. I am very proud that these 300 families have become part of our society.”
He likened some of the IIP applicants to US President-elect Donald Trump. “The US has elected as president a person who is very successful in building. We are speaking about these type of people – people who are successful – 300 families with links we could not even dream of.”
IIP funded projects to start in 2017
In a recorded segment, David Curmi, the Chairman of the governing board of the National Development Fund said over €130 million has been deposited into the fund’s account so far. He said the board is currently drawing up a strategy on how these funds will be allocated. They can be spent on projects of a social nature, projects of national importance and for projects for future generations. Sectors that will be given importance are the social, social inclusion, health, education, research and innovation sectors.
These projects will start taking shape by early next year, Mr Curmi said.
The €300 million are, according to the report, being held in a suspense account. There is no mention of such an account in the law. Do we know who is receiving the interest on €300 million? Could it be that this account belongs to Henley as well, and that it is taking these millions in interest?