Malta’s criminal justice system is at risk of paralysis unless a redistribution of responsibilities between the police, the Attorney General’s office and inquiring magistrates took place, the Council of Europe’s anti-corruption watchdog has warned.

In a draft copy of an evaluation report carried out by Group of States Against Corruption (Greco) seen by The Sunday Times of Malta, evaluators said it was clear Malta needed to increase its capacity to deal with allegations of corruption and other offences involving government officials.

The lack of action against top officials facing corruption allegations conveyed a feeling in the public that senior officials benefit from a total impunity for their actions.

“This is worrying,” the Greco report states bluntly.

The report says Greco officials who carried out a visit to Malta last October were too often confronted with a culture of secrecy of many institutions, where reports, recommendations and conclusions are not published.

“This is not compatible with an effective system of checks and balance. This situation calls for rapid changes,” Greco highlights.

Greco’s evaluation team said they heard how institutions meant to hold the government to account suffered from a lack of courage, accountability and real means to accomplish their duties.

Inaction by key institutions against government officials outed in the Panama Papers comes in for particular criticism by Greco.

The report says the criminal justice response can too easily be paralysed where political influences come into play.

Greco notes that “most, if not all” files against top officials in the executive and other related officials are stuck at an early stage of criminal proceedings.

Despite new revelations every month, the only inquiry that had been completed was the one conducted with the Prime Minister’s blessing, the Greco report says with reference to the Egrant inquiry.

‘Police refused to act’

Greco officials who visited Malta last October said they learnt how the police had “refused to spontaneously open cases” following the Panama Papers and other revelations, even when information about suspicious activities was officially transmitted to them by the country’s anti-money laundering unit, the FIAU.

“The police has refused to open cases arguing that no ‘hard’ evidence has been presented to it, even if it was undisputed that legal offshore constructions had been set up under questionable circumstances,” Greco said in the draft report seen by The Sunday Times of Malta.

Apart from recommending that key reforms put forward by the Venice Commission are implemented, Greco also said it should be made clear to criminal investigative bodies that the launching of an inquiry or investigation does not require that evidence is readily submitted to them.

There is also a clear perception in Malta that political support currently prevails over the enforcement of the law and the general interest

Justice Minister Owen Bonnici announced during the same week the as yet unpublished Greco report was adopted by the Council of Europe (CoE) that the government would be hiving off the prosecution role from the Attorney General, as per one of the many recommendations by the CoE’s advisory body, the Venice Commission.

The timing of Dr Bonnici’s announcement about the reforms could be seen as a bid by the government to take some of the string out of the Greco report.

Former Prime Minister Alfred Sant expressed his disagreement in the European Parliament last week about the “quick commitment” by the government to adopt the changes.

‘Crisis culminated with assassination’

The report charts how former Police Commissioner Michael Cassar went out on sick leave and resigned upon receiving a request from the FIAU to investigate the Prime Minister’s chief of staff Keith Schembri and Tourism Minister Konrad Mizzi in April 2016.

It details how Prime Minister Joseph Muscat carried out a Cabinet reshuffle, in which the officials involved were retained instead of dismissed.

“The crisis culminated in October 2017 with the assassination of Daphne Caruana Galizia, who had reported extensively about the number of anomalies in the conduct of public affairs in recent years,” the report says.

The report strikes an unimpressed tone about the arrest of three people “considered by many as mere executants acting at the request of influential persons”.

The Commissioner for Standards’ reluctance to touch the 17 Black revelations also raised questions from Greco.

Acknowledging that the law governing the Commissioner precludes him from investigating actions that took place before the new laws on standards in public life came into force, Greco argues that it is an ongoing controversy.

“The Greco evaluation team would find it particularly strange that no such action were to be taken although the situation continues in the present,” the reports says on 17 Black.

Greco’s damning assessment in quotes:

■ On institutional weakness:

“Malta has on paper an impressive arsenal of public institutions involved in checks and balance.

“However, their effectiveness is being questioned as the country was confronted in recent years with an unprecedented wave of controversies concerning the integrity of senior government officials up to the highest level.”

■ On the centralisation of power:

“During the interviews, the Greco evaluation team heard repeatedly that these bodies [meant to hold government to account] – with a few exceptions – suffered from a lack of courage, accountability and real means to accomplish their duties.

“There is also a clear perception in Malta that political support currently prevails over the enforcement of the law and the general interest.

“This is of course facilitated by the current institutional overweight of the government and especially the Prime Minister, in particular when it comes to appointments (and dismissals) in such essential State functions.”

■ On the criminal justice system:

“Malta’s criminal justice system relies excessively on the central role of the police, which is competent both for the investigation and prosecution of criminal offences.

“The police has the reputation of being traditionally heavily subjected to the executive branch of power and that its ability to deal with sensitive or major cases depended largely on the capacities, determination and self-assertiveness of the head of the institution to lead the work despite external pressures.

“This was repeatedly underlined during interviews and in media material consulted by the Greco evaluation team.”

■ On the Permanent Commission against Corruption:

“The Greco evaluation team’s conclusion is that in the current context, there is no added value with the Permanent Commission against Corruption (which could be abolished).

“The criminal investigation and prosecution system should be reformed and be made more responsive and effective, with the prosecutors being given the faculty to direct investigations and the responsibility for taking such cases to court. This would obviously require structural changes.”

■ On the police:

“The present report lists a number of desirable improvements, including more robust ethical standards, a clear merit-based approach for career decisions and promotions, the introduction of a communication policy, a more robust training system must be developed and so on.

“The independent Police Complaints Board should be strengthened and become an effective control body. And to counter corruption and other possible issues, a clear policy on reporting and disclosures, combined with protective measures for those who blow the whistle, is needed in the force.”

■ On the Commissioner for Standards:

“The media reported that on the first day in office, the Commissioner stated that he might not investigate the case of 17 Black, one of the central legal entities suspected of being involved in secret dealings with currently serving government officials and there are fears that the Commissioner for Standards in Public Life would remain a weak body.

“The Greco evaluation team would find it particularly strange that no such action were to be taken although the situation continues in the present.”

A look at some of Greco’s recommendations

That a strategy be developed and implemented to increase the capacity, authority and public accountability of State institutions entrusted with regulatory and control functions in relation to the management of public resources.

That the criminal investigation and prosecution system be reformed along the lines identified by the Venice Commission in its assessment from December 2018, without retaining the parallel jurisdiction of the Permanent Commission against Corruption and ii) that it be made clear for criminal investigative bodies that the launching of an inquiry or investigation does not require that evidence is readily submitted to them.

That detailed rules be introduced on the way in which persons exercising top executive functions interact with lobbyists and other third parties seeking to influence the public decision-making process; and (ii) that sufficient information about the purpose of these contacts be disclosed to the public in a systematic, timely and easily accessible manner, such as the identity of the person(s) with whom (or on whose behalf) the meeting(s) took place and the specific subject matter(s) of the discussion.

That the current regime of asset declaration be further developed by (i) extending to all persons entrusted with top executive functions, including persons of trust who are associated with a minister’s decision-making, the duty to file a detailed declaration of assets with the Commissioner for Standards in Public Life, considering including information on the spouses (it being understood that this last information would not necessarily be made public), and (ii) ensuring that all asset declarations are made systematically, easily and publicly accessible online.

The status of persons appointed to positions of trust be clearly identified and regulated, and that those very few who would be appointed to such positions and who would perform top executive functions be required to comply with the highest standards of integrity, including as regards rules of conduct, conflicts of interest, declaratory obligations and supervision by the Commissioner for standards in public life.

A dedicated anti-corruption strategy be adopted and implemented for the Maltese Police Force, based on proper risk assessments, so as to promote a culture of integrity and to restore public trust in the Force through a robust set of rules, effective compliance, merit-based career systems, operational independence and political neutrality, as well as increased awareness and gender balance at all levels.

German MEP: Time for the European Commission to act

German Greens MEP Sven Giegold in a reaction to the report said on Sunday that the European Commission needed to act about Malta.

"The EU Commission must make the situation in Malta a top priority and initiate a procedure under Article 7 of the EU Treaties. So far, the responsible Vice-President and Social Democratic commission president-candidate for the European elections (Hans Timmermans) has referred the matter to Justice Commissioner Jurová. Following the Council of Europe’s dramatic findings,  Timmermans must put an end to his hesitation. The S&D Group in the European Parliament must also ask itself why Malta’s Socialists are still members of their group," he said.

"Institutional change is no substitute for criminal prosecution. It is a positive step that the Maltese government has announced changes to Malta’s constitutional set up. Nevertheless, it is completely unacceptable that Konrad Mizzi and Keith Schembri are still in office and that the financial services provider Nexia BT continues to operate on the market with impunity“.

A procedure under Article 7 means suspension of certain rights from a member state, such as the suspension of voting rights. 

Mr Giegold is a member of the EP committee on the rule of law in Malta and Slovakia.

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