Henley & Partners was “prepared” for the potential launch of a Malta passport sales scheme to rich foreigners months before a public call for the scheme was issued in 2013, leaked documents from the Passport Papers reveal.
A few weeks after Labour shot to power in March 2013, Henley & Partners hired lawyer Adrian Camilleri to look into “procurement issues relating to the establishment of a citizenship-by-investment scheme in Malta”.
The government notice, dated April 2013, came two months prior to a public call for a “consultant” to advise on and operate such a scheme was published by the government.
Rival bidders Arton Capital had filed a legal case against the government alleging an “abusive” process that led to Henley winning the concession, saying they had an unfair advantage because they had already acted as advisers on such schemes before the call was made. The case was settled out of court in 2015.
Suspicions have long been held that the Labour Party devised plans for the scheme whilst it was still in opposition.
As early as 2011, SCL, the group behind data mining company Cambridge Analytica, had offered to broker a meeting between then opposition leader Joseph Muscat and Henley & Partners chairman Christian Kalin.
Cambridge Analytica found itself at the centre of a US election manipulation scandal in 2018 after a whistleblower revealed how the company used data mined from Facebook to profile voters and influence elections through targeted, personalised ads.
“He is young, very determined and very savvy for international investment,” the SCL e-mail sent to Kalin about Muscat said.
No mention of the intention to launch a passport sales scheme was ever made in the Labour Party’s pre-election manifesto.
Abusive process that led to Henley winning the concession
The scheme was met with public concern when details about it first leaked in October 2013. Polls showed the majority were against the sale of Maltese citizenship and the EU voiced fears buyers would have access to the Schengen zone, giving them free movement between member states.
Responding to questions about his contacts with Kalin, Muscat said he had already said in the past that he had met Henley & Partners while he was still in opposition.
“They introduced themselves by requesting the meeting within the context of the work I believe they were doing for the then government regarding residency programmes,” Muscat said.
Henley & Partners had been hired by the former PN government to revamp its residency programme, which is separate to the passport sales scheme.
Muscat’s former chief of staff, Keith Schembri has also admitted to meeting with Henley & Partners prior to the March 2013 election.
Schembri was the subject of a three-year inquiry into a suspected €100,000 kickback on passport sales from his accountant, Brian Tonna.
Both men have since been charged with money-laundering as part of a wider investigation.
Henley & Partners told the Passport Papers investigation that it was “well-known” at the time that the government might put out a tender “for a possible revised residence or even citizenship programme.
“We, therefore, needed to be prepared in case this happened and, therefore, took appropriate legal advice.”
Lawyer Camilleri told Times of Malta he had been instructed by Henley & Partners to provide legal advice about the procurement processes that may be applicable for a possible citizenship-by-investment scheme in Malta.
Camilleri too said it was “known in the industry” at the time that the government was planning to consider such a scheme.
Henley & Partners, who had experience managing similar global schemes, were originally proposed as the sole agents of the scheme but this was relaxed after political opposition.
Minister defends scheme
Economy Minister Silvio Schembri defended Malta’s passport scheme’s role in helping to fund COVID-19 relief measures, in the government’s first reaction to the passport papers revelations.
He argued “most of the proceeds went into a fund which was to be used only when needed”. If Malta had not had “a substantial amount of money saved up in this fund” it would not have been able to sustain economic measures such as the wage supplements scheme.
“We would have had to resort to financing coming in from other activities, which would have placed the country in a position in which we would have to hold back from certain investments we’ve made,” he said.
He added that were it not for the pandemic, “we would have kept going on with our business and we wouldn’t even have needed to resort to the money made from passport sales”.
The reserve fund allowed the government not to put extra pressure on the Maltese population.
“We don’t depend on passport sales, we depend on real economic activity,” he said.
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