FIAU resignation: explanations required

When the director of the country’s Financial Intelligence and Analysis Unit resigns in the middle of what could possibly be the country’s biggest tax evasion and money laundering scandal on record, a proper explanation is certainly required.

But it is exactly a proper explanation to the surprise resignation of FIAU director Manfred Galdes that is sorely lacking in these days of questionable good governance, especially considering the circumstances under which the resignation was made.

But first, some context. As almost everyone in the country is undoubtedly aware, in February the government became embroiled in the Panamagate scandal, in which then Energy and Health Minister Konrad Mizzi and the Office of the Prime Minister’s Chief of Staff Keith Schembri were both exposed for having opened secret companies in the questionable jurisdiction of Panama, with accompanying trusts in New Zealand shortly after the 2013 general election.

All hell broke loose and when the Panama Papers themselves began being released to the International Consortium of Investigative Journalists partner media outlets, this publishing house included, a couple of weeks later matters took an even more distinct turn for the worse.

We will spare readers repeating the gory details of what was revealed but suffice it to say that the Prime Minister’s right and left hand men were caught with their pants down and the government was scrambling to contain the damage in any and every way possible.

In the middle of this uproar, the FIAU apparently took it on itself to investigate the matter of the chief of staff and the minister’s overseas financial adventures, as it should. The finance minister, in fact, earlier this year confirmed that the FIAU was investigating the Panama Papers leaks. In April, the FIAU turned its findings over to then Police Commissioner Michael Cassar, presumably for follow up action against Schembri and Mizzi by the police. But just two days later, Cassar took holiday leave and resigned on his return citing health issues.

In June, following repeated questioning by this newspaper, the police force, now under a new acting commissioner, finally told this newspaper that it is not investigating any of the Panama Papers’ leaks because it saw no reasonable suspicion of any crime having been committed. About a month after that, Galdes tendered his resignation from the FIAU.

It must be conceded that the timings here are more than somewhat suspect.

This week Galdes refused to explain to this newspaper whether his resignation was linked to the investigation or not, citing that he was prohibited by law from making any comments related to the FIAU investigations. He also refused to comment on the reasons for his resignation, saying that he was going back into private practice as a lawyer. Cassar, similarly, would not comment. As for the government, it insists that Galdes had provided no reason for his resignation and that it had never interfered with the work of the FIAU or with the investigation.

That the individual in question has left the FIAU to pursue opportunities in the private sector is simply not good enough, not with all the baggage and natural suspicions of this particular case.

These are not normal run-of-the mill times and such normal run-of-the mill explanations are not acceptable. These are times in which senior government figures are being implicated in the biggest global financial scandal in recent memory.

But despite that, what we have is a stalemate with the Opposition crying foul and with the government clamming up and returning to siege mode as it does when faced with questions it is unwilling, or possibly unable, to answer.

Now it could very well be that there was nothing sinister behind Galdes’ resignation. But imagine for a moment that you are the director of the FIAU. Imagine that your team investigates the Panama Papers allegations against senior members of the government, you hand the file to the police for action and the police, for one reason or another and under two different commissioners, choose to not act on your investigation’s findings.

We are not saying that this was the case, but if it were the case it would certainly be a good enough reason to tender your resignation.

In fact, the police have confirmed that the force will be taking no action on the Panama Papers. Last month, after six weeks of repeated questioning by this newsroom, the police force was constrained to admit that it is doing nothing whatsoever as regards the Panama Papers.

The thing is that it is not as though the police investigated the leads and reached the educated conclusion that there are no charges to press. Instead, it has, prima facie, decided that there is no reasonable suspicion of any wrongdoing and that it will, as such, not investigate anything.

The Panama Papers leaks are replete with leads that the police could be looking into – potential leads on anything from embezzlement to money laundering and from tax evasion to the funding of terrorism. If anyone believed that the Panama Papers was only about Minister Konrad Mizzi and OPM chief of staff Keith Schembri, they are mistaken.

Such a blanket answer that dismisses the entire contents of the Panama Papers in one fell swoop raises even more suspicions. After all, it’s not as though the police investigation into non-public individuals who feature in the leaks would be justified if the public figures were not investigated as well.

There are in fact a lot of Maltese and residents of Malta who found themselves mentioned in the Panama Papers after they made use of Mossack Fonseca’s services and established obfuscated financial set ups not only in Panama but in other jurisdictions well known for their financial secrecy such as the British Virgin Islands and the Seychelles.

Not all such goings on are illegal per se, but they should certainly raise the eyebrows of investigators at the police’s Economic Crimes Unit. But, it seems, not even a single individual is to be investigated of the police’s own accord, although this does not mean that if another authority is, indeed, investigating the Panama Papers leaks that a police investigation may eventually be undertaken.

That would have presumably happened after the FIAU concluded its investigation and brought its dossier to the police. Either that dossier truly held nothing worthy of being investigated, or it held information that no one had the gumption to actually investigate.

The government, if it truly has nothing to hide, has two options before it at the moment if it wants to permanently put a lid on this latest debacle: it could have the FIAU’s investigation into the Panama Papers published or it could release Galdes from his professional secrecy obligations so that he could explain either exactly why he left the FIAU or to at least allay the public’s concern that his resignation was related to the Panama Papers investigation.

But given the government’s practice of burying its head in the sand and ignoring a problem until the coast is relatively clear, we are not exactly holding our breath for either potentiality.