The former Attorney General has defended repeatedly advising the police not to act on a range of corruption claims following the Panama Papers leak.

Peter Grech insisted his role was to "advise not to investigate" and so could not be blamed for any subsequent inaction by the police.

Grech stepped down in September, after facing numerous calls for his resignation over his handling of corruption allegations. 

On Friday, he insisted to the public inquiry into the circumstances surrounding the murder of journalist Daphne Caruana Galizia in October 2017, that the responsibility for investigating crimes lay with the police.

He was questioned about advising against acting on the Panama Papers leak, which exposed the existence of two secret offshore companies held by former OPM chief of staff Keith Schembri and former energy minister Konrad Mizzi. 

He confirmed that he had warned police that seizing evidence from accountants Nexia BT in connection with a possible investigation  was "drastic" and an invasion of privacy.

And he also defended advising police against raiding the now-defunct Pilatus bank on the night allegations emerged that it had documents confirming a third secret company was owned by former prime minister Joseph Muscat's wife. 

He confirmed he told the then police commissioner Lawrence Cutajar that he was against opening an inquiry "simply on the basis of a blog post" written by Caruana Galizia. 

But he said he was not to blame for police failing to act, repeating throughout his testimony that the investigation of crimes rested with them alone: "Always has and will". 

He also revealed that shortly after the murder of Caruana Galizia, who had first exposed the secret companies and reported on the fall-out, German prosecutors emailed him to suggest a possible link between the murder and the Panama Papers. 


Inquiry resumes Wednesday

11.58am Thank you for joining us. The inquiry will resume on Wednesday, when the current Attorney General, Victoria Buttigieg will take the stand.

We'll have a summary of today's testimony above shortly. 

Grech's testimony ends

11.54am Before he leaves, he is asked if he was spoken to either by Prime Minister Robert Abela or by Justice Minister Edward Zammit Lewis.

He replies: "I wrote a letter of resignation. The attitude was to have a change in certain roles at the time."

And with that, after over two hours on the stand, he leaves. 

Electrogas directors

11.51am Comodini Cachia asks if Grech met ElectroGas directors. She reads from another email from Siemens addressed to Yorgen Fenech.

“Government of Malta not ready to .......have you had a chance to discuss with respective people within government?” Fenech replied that it would be handled within the day.

Grech replies that there were meetings and that Fenech came along "occassionally".

IIP law

11.43am Another subject now: the 'golden passports' scheme. Did he draft the Individual Investor Programme law, Comodini Cachia asks. 

Grech says that the IIP bill was first discussed and then he put it in draft form. It was circulated among MPs and ended up on Caruana Galizia's blog.

"Regulations were amended, as well as the Maltese citizenship act," he says.

The judges say this is not relevant. 

John Dalli

11.37am Another matter is raised. Whether action was to be taken against former European Commissioner John Dalli. 

He says that he had only advised former police commissioner John Rizzo. "The position at law at the time was for police to decide whether to prosecute or not," he says.

Said Pullicino says that there seems to be an impression that different people are treated differently. Action is taken against 'Ċikku from Għaxaq' but against others no, he remarks.

Electrogas advice 'common practice'

11.24am Grech says it is common practice in international dealings for advice to be sought from a state lawyer to ensure that everything is in order, to avoid any recall of the loan.

He said: "This was painted as a scandal by the media, but it is normal practice. It was done when loans were undertaken. The Attorney General sought to make sure that the government was bound under agreement and all is in order."

One email said that the Attorney General's opinion was discussed with Electrogas and other lenders, Comodini Cachia points out.

"The Attorney General sent draft advice," Grech said.

"And it would be revised by the parties," Comodini Cachia remarks. "So you accepted all amendments by the lenders to your opinion?" 

"That’s normal," Grech says.

"Did you consult anyone before adjusting your opinion?" the judges ask.

He said he and Victoria Buttigieg discussed it between themselves and then sent the legal opinion to the finance ministry.

The practice of adjusting a legal opinion in this way had been done before, he says, in response to to questioning. 

"There may be templates."

Electrogas contract

11.19am Questioning now turns to the controversial Electrogas power station contract.

Grech says that on government contracts the Attorney General's advice is sought. They advised the finance ministry and the government also engaged private law form Camilleri Preziosi.

"What was your involvement here?" Comodini Cachia asks.

"To give advice on any matters as the need arose. There was myself and Victoria Buttigieg (current Attorney General)," he responds. 

The finance minister would want the “comfort of Attorney General advice“ he says. 

Was it the government or ElectroGas who sought your advice? Comodini Cachia asks. She reads from emails, asking Grech about people mentioned in them. 

Public inquiry 'not needed'

11.12am Grech is explaining why he advised against a public inquiry. He says there was a "big issue" over whether it should run in parallel with criminal proceedings or after. But that there was also direction from the Council of Europe that the inquiry was to be opened within three months.

Grech says he had appeared at a sub committee of the Parliamentary Assembly of the Council of Europe and made submissions that the public inquiry "was not needed." 

He explains that one of the terms of reference of the inquiry was not to tamper with criminal proceedings. 

The judges say they wish to make clear that they gather evidence in line with the terms of reference.

Why did you retain Silvio Valletta?

11.07am Grech is asked why he retained Silvio Valletta, despite concerns by the Caruana Galizia family. Was there a sense of conflict in retaining him.

Grech says that Valletta exited the probe after a court judgment at the first instance.

He is also asked about the accountancy board's representative, who testified that they also relied on his advice regarding whether to withdraw the warrants of Nexia BT accountants. 

"I read that on media. I sought if there was a written advice but it was not found at the office," he responds.

'Don't open an inquiry based on a blog post'

10.56am Comodini Cachia raises the now-defunct Pilatus bank and the former police commissioner's testimony that he was ready to move in on it but held off on the advice of the Attorney General.

Grech says that former assistant commissioner Valletta had approached him saying that police were considering a magisterial inquiry in 2016.

"I told him I would not do that simply on the basis of a blog post," he says.

Later that evening, Valletta called him to confirm his position. And again Grech told him he would not open a magisterial inquiry on the basis of a blog post, after “someone left the bank”.

That same night the prime minister decided to ask for a magisterial inquiry, Comodini Cachia points out.

"I had nothing to do with that," Grech says. 

"I was against opening an inquiry simply because someone was seen exiting the bank. Simply on the basis of a blog post," he insists.

The judges remarked again that his advice was to "do nothing".

[Read a timeline of the events here]

Relationship with Joseph Muscat

10.53am Questioning now turns to former prime minister Joseph Muscat. Did he ever seek your advice, Said Pullicino asks. 

Grech says meetings with the prime minister were few, and that the main relationship is with the justice minister.

Judge Lofaro says that former prime minister Dom Mintoff had a very good relationship with his Attorney General, Edgar Mizzi. "They worked hand in hand, very close and there was nothing wrong. The system worked very well," she says.

"It’s not so today," Grech says.

'Why did your advice remain set in stone?'

10.50am Grech is challenged by Judge Abaigail Lofaro about why he did not revisit his advice when the circumstances changed. 

"Couldn’t you draw attention to the police commissioner and suggest that Nexia servers ought to be checked?" she asks.

"It never was done," he replies

"There’s always a first time," Lofaro hits back.

Grech defends his position: "There was a lot of talk in the media, 'great caution' 'go slow' and that was not true at all."

Murder possibly 'linked to Panama Papers'

10.43am Grech says that shortly after Caruana Galizia was murdered in October 2017, he received an email from the German prosecutor's office, saying that the crime could possibly have been linked to the Panama Papers leak and that the German authorities were willing to co-operate on that score.

Grech had passed on that information to then-inquiring Magistrate Anthony Vella.

As for Egrant, Magistrate Bugeja had also traveled to Germany to check out that information.

Family and friends lay flowers at the site of the murder of Daphne Caruana Galizia, three years on. Photo: Mark Zammit CordinaFamily and friends lay flowers at the site of the murder of Daphne Caruana Galizia, three years on. Photo: Mark Zammit Cordina

Panama Papers

10.27am Grech is asked about the Panama Papers global leak of hidden offshore accounts, pointing out that it had such an impact that in other countries, prime ministers resigned. 

Grech reiterates that the investigation of crimes is in the hands of police. "Always was and is," he says.

But the police came to you, the judges point out. "Ministers and heads of departments have come here in succession all claiming to have acted on your advice. They all blamed you. What have you to say?" Said Pullicino asks.

Grech responds: "When giving advice you trust that your client is in good faith. And advice is that, advice. I’m not saying it’s got no value. But to seek advice, simply to hide behind that advice..."

He trails off.

'I was legal advisor - not investigating'

10.22am Grech explains that when he gave his advice in 2016, he did not have information, which was later gathered at the Egrant inquiry.

He adds that FIAU had sent for Nexia and asked for the servers and that a similar request was made by the courts at the time. "The FIAU seemed to suspect that there were more documents particularly concerning opening of bank accounts," he explains.

When the FIAU asked for more information,Nexia replied saying they had no further documents because other dealings with the clients were “all verbal”.

"So my advice was restricted to the legal position and on the basis of knowledge available at the time....I was legal advisor not investigating," he continues.

"Details were rather scant at the time."

Comodini Cachia points out that the Panama Papers leak broke months before that advice. 

'I gave legal guidance'

10.18am Comodini Cachia says that police testifying at the public inquiry said that they had consulted Grech on the matter.

"I gave legal guidance," he says. "There was no examination of the evidence at hand, I didn’t tell them to arrest that or the other one."

But should that examination have taken place, the judges ask. 

AG 'skimmed through' report

10.15am Grech is asked whether he read the FIAU report before giving that advice.

"I must have skimmed through it” he says. "I must have read enough to be able to give that advice", he adds.

Seizing servers would have been 'invasion of privacy'

10.11am Grech returns to his advice given in 2016 regarding the servers of Nexia BT.

He refers to a blog post written by Caruana Galizia that claimed that data on servers would have vanished by then. She wrote that police ought to rush to seize the servers. He says that he does not know if the police request for his advice had been prompted by that blog.

As to the advice, he had told police that it would be “an intrusive measure” to go to the accountancy firm and seize the servers. That was an invasion of privacy, he says.

"My advice was that such was a drastic measure and so there had to be a strong reasonable suspicion to act," he says.

"Reasonable suspicion could be loosely interpreted. I doubt if there was anything like that happening before. Perhaps you might say I’m cautious."

Exemption from secrecy

10.06am Comodini Cachia interrupts to make reference to the terms of reference of the public inquiry and asks if Grech went to the prime minister to seek exemption from professional secrecy?

He replies: "No one told me to ask the prime minister to exempt me."

Comodini Cachia explains that unless Grech is expempted from professional secrecy, in respect of client (in this case, the government) this board will not be able to get full information.

Judge Said Pullicino tells the witness: “we need the whole truth here, not part”

Grech reiterates that he has no problem testifying about that advice mentioned earlier. It’s public.

The judges consider whether to postpone until the exemption is made. Comodini Cachia suggests that today they ask questions about that advice and anything else that is public knowledge.

'Exercise great caution'

10.01am The former Attorney General's own advice is read back to him, regarding whether police should seizure the servers of Nexia BT, who were the accountancy firm linked to the Panama companies. 

Grech had written to "exercise great caution" and is asked to justify that advice and its "enormous" repercussions. 

"Why did you allow servers to remain there, with possible loss of evidence?" former judge Michael Mallia asks.

Grech says that yes, this is public domain. "I have no problem testifying about that.  I gave them (police) advice." 

Keith Schembri and Konrad Mizzi

9.58am Comodini Cachia goes into specifics. She asks Grech to say when the FIAU flagged reports on the former prime minister's chief of  staff Keith Schembri and ex-minister Konrad Mizzi. 

Both were found to have secret accounts in Panama, which was first revealed by Caruana Galizia in her blog. 

Grech requests to go behind closed doors. But the judges say that much is in the public domain.

FIAU role

9.53am Grech explains the role of the Attorney General in the FIAU. He says the FIAU conducts investigations and determines reasonable suspicion but not whther there is sufficient evidence to prosecute. 

"If the Attorney General is part of the FIAU, the Attorney General might end up in a strange situation. But that is the perception. It is not so."

They discuss fines and then Joseph Said Pullicino asks about cases of very serious allegations against important persons.

Today, after amendments in February, the Attorney General does not participate in FIAU procedures. In practice, the board is not involved in investigations by FIAU unless asked by the Director, Grech explains.

In his time, the director was Manfred Galdes, succeeded by Kenneth Farrugia.

He says he cannot divulge discussions at the board but by way of general outline, he says that director takes great caution in the degree of involvement by the FIAU board.

Former Attorney General takes the stand

9.47am That prelude over, we now move on to Grech who steps on the stand and takes the oath.

He became Attorney General in September 2010, succeeding Silvio Camilleri who had also had a seat as chairman of board of governance at the Financial Intelligence Analysis Unit (FIAU) - a government agency set up to fight money laundering.

Grech is first asked about his service on the FIAU board.

Yorgen Fenech application designed to 'scare'

9.43am The first topic brought up by the judges is an "application". They don't stipulate what it is but it is understood the are referring to an application filed by Yorgen Fenech, who stands accused of conspiring to murder Caruana Galizia. His defence team wants all behind-closed-doors evidence handed to them.

Comodini Cachia says he intention of such applications is to convey a message to those out there who are to pass on information to this board.

"It’s meant to scare," she says.

"We are not investigating Mr Fenech, he is the least of our concern here. It’s Keith Schembri, Konrad Mizzi and other politically exposed persons who are within sights of this inquiry," she says. 

She says that they have filed a written reply to Yirgen Fenech's application which ought to be rejected by the board.

Who's here?

9.38am We’re at Hall 20, the usual venue for the public inquiry. The former Attorney General is seated outside. Inside are parte civile lawyers Jason Azzopardi and Therese Comodini Cachia.

Lawyer Maurizio Cordina from the State Advocate’s office is also present.

And, one of Daphne’s sisters has just walked in. The judges that make up the inquiry board come out and take their place at the bench. 

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