IIP: Major overhaul, proper investigations needed

Malta’s controversial cash-for-passports scheme once again finds itself under the spotlight after a French news investigation highlighted irregularities and claims of familiarity between private sector agents and government members.

In the video, a Maltese agent from Chetcuti Advocates is heard boasting about his friendship with both Prime Minister Joseph Muscat and Parliamentary Secretary Julia Farrugia Portelli.

He describes the latter as a childhood friend of his wife. “It’s good to have a wife with such friends,” he tells the undercover journalist. He adds that he and the prime minister were at school together and they were “invited to [their] respective birthdays.”

Another claim was that the firm also knows Justice Minister Owen Bonnici who, it was claimed, worked at the firm.

The lawyer also claimed to be able to get a second chance for passport buyers that have been turned down, adding that this was possible when ministers “turn a blind eye.”

The law firm has had its Individual Investor Programme (IIP) licence suspended and the Malta Individual Investor Programme Agency has also asked the regulator to review all the files submitted by the firm and has put all pending applications on hold.

The government, particularly the members named in the video, rushed to deny the claims of interference and familiarity. They argued that just because there are photos of them in the company of Chetcuti Cauchi agents at public events does not prove any form of ‘intimate’ relationships.

Indeed, they could be right. It is not unknown for budding businesspeople to try and have their photos taken with government members in order to look more important or to give the impression that they have that particular minister’s ear.

But the government has so far failed to explain why a promotional video for the law firm was filmed at the Auberge de Castille, with Chectuti Cauchi’s managing partner even filming his piece inside the cabinet room. The video also features PS Julia Farrugia Portelli and the head of the IIP, Jonathan Cardona, making their case for Malta’s citizenship scheme.

Denying familiarity with the IIP agents is one thing, but how can the government possibly argue that it keeps its distance when it lent its seat of power to a private firm to film its promo material?

This is not to mention the fact that Prime Minister Muscat has travelled around the globe acting as a salesman for the IIP’s main concessionaire – Henley and Partners – a role which the prime minister takes pride in performing.

Muscat has defended this by pointing out that millions made through the scheme have gone into a fund that pays for social projects, but the fact remains that he is acting as a promoter and salesman for private industry – a very lucrative industry, and one which has been under scrutiny since day one.

While the government continues to claim that the IIP is airtight and that all necessary checks and balances are in place, stories that keep emerging in the international and local press show a different reality.

The French documentary, for example, confirmed that some IIP investors are not actually living at the residences they are registered at.

Passport buyers are supposed to buy or rent property in Malta – this is a requisite to obtain citizenship. But it has long been known that many of these individuals do not have an interest in living here or contributing to our economy – they are not after a Maltese passport, but an EU passport.

When the French journalists knocked on some of these people’s doors, they found someone else living there, confirming what we have known and have been reporting for quite some time.

This is an irregularity that, as far as we know, has never been investigated by the IIP regulator.

The French investigation has shed new light on the murky world of passport sales, where the mega rich get what they want even if they do not meet the necessary requirements. Cash, it seems, is the only real requirement.

There are dozens of IIP agents and the authorities should look into each and every one of them if it wants us to believe that everything is being done to ensure that the law is being followed. Agents who observe the rules should have nothing to fear.

What we, as a country, should fear, on the other hand, is the massive reputational damage that the controversial golden visa scheme has brought upon us – damage that has led to countless calls for the Individual Investor Programme to be investigated and shut down.

We have always disagreed with the concept of selling citizenship.

Nonetheless, the scheme could have been handled differently. It was not. The government will claim that other countries are ‘jealous’ of the investment we are raking in and are trying to undermine our success.

The truth is that the signs have been there long enough, but we chose to turn a blind eye, because millions were – and still are – coming in.

We have been assured that the required due diligence is in place but bad press about the scheme, its agents and the buyers keep surfacing.

Malta’s reputation and the jobs of many employees in the sector who follow the rules and do not try to impress clients with how close they are to government ministers are at stake. At this stage, nothing short of a major overhaul and a proper investigation into past and pending applications will suffice.