Assistant police commissioner Ian Abdilla had no reply when asked in court on Wednesday why police had not hauled Keith Schembri and Konrad Mizzi in for questioning over their offshore affairs.
A subdued Abdilla received a tongue-lashing from a board of inquiry looking into the murder of Daphne Caruana Galizia, as he confirmed that police had done nothing when the 2016 Panama Papers scandal had implicated the two politically exposed men.
“How could you not do anything about the Panama Papers! How could you not send for Keith Schembri and the rest? We seem to be living in a parallel universe,” judge Abigail Lofaro told the witness.
Abdilla led the police force’s Economic Crimes Unit from 2015 until last week, when he was taken off that job by new police commissioner Angelo Gafà.
In his second appearance before the Caruana Galizia inquiry, Abdilla also:
• said police had information about Yorgen Fenech in March 2018 through an FIAU report
• could not recall advice by the attorney general to the police to “tread carefully” around the Panama Papers probe “because there was trouble brewing for the country”
• said Dubai was uncooperative and did not provide information about 17 Black
• said the ECU had received a report on Montenegro-linked company Cifidex ‘three weeks ago’
• insisted the Pilatus Bank probe was “unlike any Malta has had before” in terms of its depth and scope
• said police had initially seen no sign of criminality when they looked at Keith Schembri’s Pilatus Bank transactions
• police have excluded links between the Caruana Galizia murder and fuel smuggling at this point.
The Caruana Galizia inquiry will resume on Friday, July 3 at 9.30am.
As it happened
Live blog ends
11.44am With Abdilla’s testimony continuing behind closed doors, this live blog will end here. Thank you for having joined us. We will have a summary of the session's key points available at the top of the article shortly.
Why did police not probe smuggling claims?
11.30am Azzopardi steers the witness back to Caruana Galizia’s claims about cigarette smuggling in 2017. Didn’t the police do anything about it?
“I didn’t go into everything Daphne Caruana Galizia wrote,” Abdilla says.
Azzopardi finds it hard to believe that nothing underhand happened.
“Did anyone speak to you about this? Were you advised to close an eye and do nothing about it?”
“No,” Abdilla says.
Said Pullicino asks Abdilla about links between Caruana Galizia’s murder and fuel smuggling. The witness says that that motive could safely be excluded at this point.
The sitting will now continue behind closed doors.
Attorney General’s advice
11.28am Said Pullicino asks: “What about the Attorney General's advice to tread very carefully regarding the Panama Papers, because there was trouble brewing for the country? Was that why you did nothing?”
Abdilla says he cannot recall that advice.
‘Bigger than Panama’
11.24am Abdilla says that the police lacked resources earlier on.
“In 2016 we had even greater cases which never made it to the media”.
That prompts a cynical retort from judge Lofaro – “greater than the Panama Papers!”
“Yes, for us they were,” Abdilla replies. He cites “the Portman case” and the case concerning Swedish pension schemes.
[The Portman probe looked into claims of a €200m fraud, with money taken from wealthy Italians and moved to the British Virgin Islands. The Swedish pensions case concerned an €80m fraud run from Malta].
Daphne’s writings on db Group
11.18am Azzopardi asks Abdilla about Daphne Caruana Galizia’s posts concerning the former ITS site at St George’s Bay. She had written of the db Group takeover and of alleged links between the company’s owner to cigarette smuggling through Cyprus.
Abdilla says he is not aware of the matter and has no recollection of the report.
The NAO had highlighted gross shortcomings, Azzopardi says.
Abdilla says the police cannot investigate every report by the auditor general. Not all NAO reports are passed on to the police. This one was not.
Relationship with Silvio Valletta
11.14am Abdilla is asked about his relationship with Valletta. He says he got to know that Valletta was friendly with Fenech through media reports.
The two men had a working relationship and nothing more, Abdilla tells the board.
“We wouldn’t even have a beer together,” he says.
Meeting Yorgen Fenech
11.11am Comodini Cachia asks when Abdilla visited Yorgen Fenech at his office in Portomaso.
“I don’t recall, but it was some Sunday after a story in Times of Malta about him [being the owner of 17 Black],” Abdilla says.
“Up to that point intelligence concerning Yorgen Fenech had not led us to confirm that he was the owner of 17 Black,” he says.
The bulk of the work to gather information was handled by Ray Aquilina and Antonovitch Muscat, he says. Silvio Valletta was his superior.
Abdilla says that Valletta had called the police telling them not to go to Portomaso because “Yorgen Fenech is not at the office”.
Did Abdilla ask Valletta how he knew that?
“No,” he replies. “I was pretty ticked off at the time [kont daqsxejn maħruq].”
“At the time I had never spoken to Yorgen Fenech, I would not even have identified him in the street. I never spoke to him, never sent him any messages,” Abdilla says.
11.04am Abdilla is asked when the economic crimes unit got invovled in the Caruana Galizia murder taskforce.
He says they stepped in when money laundering investigations began into the alleged hitmen and in August 2019 they played an active role in the investigation into middleman Melvin Theuma.
Police had information on Fenech in March 2018
11.01am Comodini Cachia asks about 17 Black transactions in Dubai, made in US dollars. Had Abdilla asked US correspondent banks about those?
Abdilla says he would rather reply behind closed doors, then adds:
“But I can say this. We tried to get a full picture of 17 Black, Wings Development and so on. We want a full picture of Yorgen Fenech in Dubai”.
[17 Black’s name was changed to Wings Development in March 2017, one month after Caruana Galizia first revealed its existence].
Abdilla says the police first had information on Yorgen Fenech in a March 2018 FIAU report.
Talking to Tonna and Cini
10.58am Judge Said Pullicino steers questioning back towards the Panama Papers.
Had Abdilla spoken to Nexia BT directors Brian Tonna and Karl Cini?
“During the Egrant inquiry,” Abdilla says.
“Why not before? The police have a job to do,” the judges remark.
Transfer from Azerbaijan
10.53am Letters rogatory were also sent to Turkey, Abdilla confirms in reply to a question.
Azzopardi tries to ask about a former Pilatus Bank director who is now leading a local company. How could the man be judged to be a fit and proper person?
But the board of inquiry shut that down and tell the lawyer to direct the question to the MFSA.
Azzopardi asks the witness about a post alleging that a substantial amount of money was paid to Pilatus Bank from Azerbaijan. [Context: here is the blog post in question]
The post was in the public domain and police knew about it on April 19. Why did they not act that day?
Abdilla: “The Egrant inquiry began on the 20th. The post by Daphne Caruana Galizia was included in the inquiry but no trace of the transaction was ever found.
“At the time Azerbaijan did not even have a functional FIAU. We tried to investigate any truth in that report and analysed everything. But we found nothing at all!”
Crossword puzzles and patchy memories
10.47am Abdilla is asked if he knows of a letter handed to former Pilatus Bank chairman Ali Sadr.
He says he does not.
“Did you know if it was a crossword puzzle or a certificate of ownership?”
Azzopardi presses on.
“Honestly, I don’t remember”.
Azzopardi says Ali Sadr “took the document and left the bank”. Again, no recollection from Abdilla.
Abdilla is asked about possible action against Ali Sadr, and says he will speak about that behind closed doors.
10.44am Answering questions from Azzopardi, Abdilla says letters rogatory were sent to Latvia and Dubai but none to Montenegro.
He denies an assertion by Azzopardi that he [Abdilla] instructed his subordinates not to send letters rogatory to the Balkan country.
Letters rogatory were also sent to France, he says. “We got a more detailed report about Cifidex three weeks ago”.
Nothing done about Panama
10.41am Answering a question, Abdilla says that the police have not sent letter rogatory to Panama.
Again, incredulity and exasperation from the board.
Lofaro: “What do you mean? How could you not do anything about the Panama Papers! It seems like we’re living in a completely different world. How could you not send for Keith Schembri and the rest?”
Lofaro tells the witness “we seem to be living in a parallel universe”.
No reply from Abdilla.
‘I can only go as far as Gozo’
10.39am Azzopardi asks if Abdilla knows of a message sent between Yorgen Fenech and a director of his in Dubai, concerning 17 Black.
“Could be,” Abdilla says.
Azzopardi pushes for more detail.
“We got to know about 17 Black because the victim’s son and a journalist went to Dubai to investigate,” he says. “Must we get to know through journalists?”
Abdilla: “Police do not have powers to investigate in foreign countries. I can only go as far as Gozo”.
No help from Dubai
10.34am Abdilla says Dubai is not cooperating.
“They are telling the media otherwise, but that is wrong. They gave some information to the FIAU but the police have sent a third rogatory letter. We were due to fly out to a meeting – the police and magistrate Charmaine Galea – and we had everything booked. They moved the date three times and finally cancelled the meeting”.
“How about video conferencing,” the board asks.
“We tried everything,” Abdilla says. “But with every step forward they sent us backwards”.
Azzopardi notes that Abdilla had said, in his previous testimony, that Dubai was cooperating.
“Unfortunately, I take that back now,” Abdilla says.
Cifidex and 17 Black
10.29am Jason Azzopardi takes over questioning.
Answering questions, Abdilla says he first heard of Cifidex [named in the 17 Black-Montengro scandal] in a March 2018 report and that the police have so far not summoned directors of Enemed.
“Cifidex falls under the 17 Black investigation. There was just one piece of [a] transaction. There are more involving 17 Black,” Abdilla says.
He continues: “We have sent letters rogatory to Dubai. They have not even bothered to send an acknowledgment.”
Abdilla says the FIAU’s report into Cifidex is still in draft form, but that the investigation “received a boost” with the arrest of Yorgen Fenech.
‘How could you not investigate?’
10.26am Judges are incredulous.
“How could you not send for Keith Schembri and Konrad Mizzi? They were not Joe Public. These were politically exposed persons. The Panama Papers scandal broke out worldwide, and you tell us that you didn’t send for these people? It just doesn’t make sense. Police must investigate, that’s why you’re there.”
Abdilla does not rebut.
“And in fact, you have no reply,” Lofaro notes.
Abdilla is asked whether the police engaged Europol to investigate the Panama affair.
“No,” he says.
10.22am Abdilla is asked whether he asked the bank to hand over its due diligence reports – “yes,” he replies – and whether he sent for Keith Schembri after that.
“Yes, but I don’t remember when,” he says. “They weren’t summoned to the police depot”.
The board of inquiry presses on.
“Did you or did you not send for these people? Did the magistrate tell you not to investigate?”
“No,” he eventually replies, subdued.
10.18am Abdilla says he sometimes used Daphne Caruana Galizia’s blog to look up information.
He says that on the night the Egrant allegations were made, police were stationed outside the bank at around 11pm.
The board says data could have been erased by then.
“I can assure you that a procedure was carried out to make sure that no data had been wiped out. We took all the servers and backups,” he says.
“But that was a year after you had the first report about Pilatus in your hands,” Comodini Cachia replies.
Pilatus probe ‘cost us millions’
10.13am The board want to know what happened with the investigation into Pilatus Bank.
Abdilla: People out there might think that we did nothing. But Malta had one of the largest investigations. The FIAU investigated. Foreign experts were roped in - we had the best experts involved. The bank was analysed from scratch, it cost us millions. Malta never had anything like it before.”
“But meanwhile a journalist was killed,” judge Said Pullicino observes.
The benefit of hindsight
10.06am Hearing Abdilla’s reply, the board asks him whether he didn’t feel there was an urgency to investigate.
Abdilla replies: When we received the first report about Keith Schembri we almost found nothing criminal, he says.
That prompts an exclamation from Comodini Cachia.
“Things appear different with hindsight,” Abdilla tells her. “It was listed as a
[Context: Tonna sent two €50,000 payments to Schembri’s account. The two men said it was repayment of a loan and have denied allegations that it was a kickback related to passport sales]
Abilla vehemently denies ever informing Keith Schembri or John Dalli about ongoing investigations.
10.02am Abdilla says Keith Schembri was linked to Pilatus Bank. Konrad Mizzi had no accounts there.
He is asked whether police verified what transactions Keith Schembri carried out with the bank.
“Yes we did. I think that was handled by Superintendent Antonovitch Muscat,” he says.
Comodini Cachia refers to a press release issued by the bank on May 11, 2016. In it, the bank said that it had filed a criminal complaint about documents being leaked and said that it took confidentiality very seriously.
That was before the first FIAU report about Pilatus in July 2016, she notes. Did Abdilla ask what documents were leaked? Had that complaint set off an alarm bell?
Abdilla says he did not ask and that a magisterial inquiry into that “is ongoing”.
FIAU reports on Pilatus
9.59am Therese Comodini Cachia asks when Pilatus Bank was shut down.
Abdilla glances at his notes and replies – April 20, 2017.
Comodini Cachia: When did you receive the Pilatus [FIAU] report?
Abdilla: October 15, 2018
Comodini Cachia: So before that date, before the FIAU report, you had no report on Pilatus?
Abdilla says the bank was mentioned in reports concerning [Nexia BT director] Brian Tonna in July 2016 and November 2016, like “a normal banking
Comodini Cachia says that suggests he had two FIAU reports about the bank showing all was not well by 2016.
“God forbid I had to shut down every bank,” Abdilla replies.
Abdilla on Ali Sadr and Pilatus
9.53pm Abdilla’s answer doesn’t satisfy Mallia.
“Shouldn’t you have acted upon that suspicion? Why did you let things pass? Usually police act immediately not hours later? Things could have worked out differently!”
Judge Abigail Lofaro steps in and says Abdilla only got to know that nothing was taken from the bank after seeing the CCTV.
“You should have intervened immediately,” she says.
Abdilla replies: Ali Sadr was the owner of the bank, he wasn’t stealing documents. He had a right to take any documents home.
The third judge, Joseph Said Pullicino: “You could have called Ali Sadr and checked things out”.
Abdilla defends himself. Footage of Ali Sadr leaving the bank was not aired live, he says. It was published after the cameraman had returned to the newsroom, around two hours later.
'Hundreds' of cases
9.45am Abdilla is asked to list the money laundering investigations he led.
Abdilla says there were "hundreds" and that many are still the subjects of ongoing magisterial inquiries.
Mallia fires off a series of questions concerning Pilatus Bank and the infamous night when the bank chairman was seen exiting the building with a suitcase.
Abdilla says nobody had called him at the time but that the suitcase incident was investigated as part of the Egrant inquiry and no document was found to have been taken into or out of the bank.
"Were the cameras switched off?"
"The bank was totally covered and there is uninterrupted footage, from the second [bank chairman] Ali Sadr entered the bank and left. Not a missing second," Abdilla says.
Abdilla's lawyer pushes for closed doors
9.42am The three judges who make up the board of inquiry take their place and so does Abdilla at the witness stand.
Refalo immediately gets up and asks for his client to testify behind closed doors, saying he had done so last time.
The judges note that only the last part of his previous testimony was private.
"Let's begin and then we'll see," they tell the lawyer.
Lawyers in court
9.37am Jason Azzopardi, Eve Borg Costanzi and Therese Comodini Cachia are in court, on behalf of the Caruana Galizia family. Maurizio Cordina is representing the attorney general's office.
We've also spotted Ian Refalo, who represented Abdilla during his first appearance before the inquiry last March.
Who is Ian Abdilla?
9.33am Abdilla's time as head of the Economic Crimes Unit was marked by controversy - Abdilla was the man leading investigations into secret companies Egrant and 17 Black, and also the man responsible for leading probes into Panama Papers revelations which have so far led to nothing.
Read more about Abdilla's time as ECU chief.
9.28am Good morning and welcome to this live blog. We will be bringing you live updates from the law courts in Valletta, where Ian Abdilla is due to testify in the Caruana Galizia inquiry.
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