The former minister has been extradited to the United States. He stands accused of helping orchestrate a financial corruption scandal worth €2 billion. On Thursday, he pleaded not guilty to charges of committing fraud and money laundering.
The court denied the minister’s request for bail, agreeing with prosecutors that he was a flight risk and could escape charges by entering his country’s embassy. “The evidence regarding his guilt is strong,” US District Judge Nicholas Garaufis insisted.
Prosecutors accused the minister of secretly getting his government to guarantee massive loans in exchange for bribes for him and other politicians. The minister personally signed off on €2 billion of loans which were concealed from public view. At least €200 million were diverted to politicians and government officials. Those loans were guaranteed by the government without parliament’s approval. He hid from the public and financial institutions the “near bankruptcy” of the companies involved.
When the full scope of the government’s massive guarantee was revealed, the country defaulted on its sovereign debt and the economy plunged into crisis in what became known as “the hidden debt scandal”.
This was a massive victory for civil society organisations that pushed to have him extradited to the US, arguing that he would otherwise have been given preferential treatment from his political allies back home.
The minister was arrested while in transit on his way to the United Arab Emirates. His own government officials sought to have him returned to his home country but civil society organisations took the case to court, which decided to extradite him to the US instead.
“We want him charged in a judiciary where he is not treated as king, where he is treated like a normal citizen,” the civil society group commented. They hope a trial in the US will provide justice and help locate the half a billion dollars still unaccounted for. They’re seeking to find out who gave the minister the orders to sign those illegal guarantees.
Sadly, this wasn’t Konrad Mizzi, or his controller, Joseph Muscat. It was the former finance minister of Mozambique, Manuel Chang. For years, Chang enjoyed impunity in his own country but was arrested in Johannesburg while in transit to Dubai.
The accusations levelled at him pale into insignificance compared to the allegations Muscat and Mizzi are facing. The fraudulent Vitals deal was worth €4 billion, according to the NAO. That’s double the value of the loans Chang got his government to guarantee without parliamentary approval.
Mizzi and Muscat guaranteed €360 million of Electrogas’s €450 million bank loan. They waived Vitals’s requirements to provide evidence of financial backing repeatedly. They bizarrely provided Steward with a guarantee that, should the deal be terminated, irrespective of which party was to blame, the government would pay them €100 million plus all the debts incurred. The NAO found that Mizzi misled parliament with that exploitative €100 million guarantee.
Like Chang, Mizzi and Muscat concealed the dire financial situation of the companies involved. According to the NAO, Vitals’s entire capital amounted to €1,200. The company was completely bankrupt with millions of losses despite tens of millions they siphoned off the State. Yet, Mizzi and Muscat made ridiculous claims that Vitals would invest €200 million in our health service. They knew Vitals was a sham. They struck a secret memorandum of understanding with them before Vitals was even set up and months before the request for proposals.
Next time Joseph Muscat dashes off to Dubai, as he inevitably will, that short stopover in Cyprus must be a tense wait- Kevin Cassar
The US State Department already took unprecedented steps against Mizzi and Muscat’s right-hand man, Keith Schembri. It publicly announced “their involvement in significant corruption”. It declared that the two “were involved in corrupt acts that included using their political influence and official power for their personal benefit…were involved in a corrupt scheme that entailed the award of a government contract for the construction of a power plant in exchange for kickbacks and bribes”.
Mizzi and Schembri, and their immediate families, are banned from entering the US. For the US State Department to take such drastic steps, it must have ample incontrovertible evidence of Mizzi’s and Schembri’s “corruption”.
The man behind them, orchestrating every move, was Muscat.
He’s now desperately trying to remove the inquiring magistrate investigating his involvement in the Vitals scam.
Police superintendent James Grech testified under oath that Muscat’s home was searched because the magistrate decreed that “to date, there is enough to show that Joseph Muscat could be involved in the crime of money laundering and corruption”.
There is enough to show – not to suspect – to show.
Muscat is clutching at straws trying to impugn the magistrate’s integrity by making false claims about her brother and father. Muscat’s false claims were completely rubbished in court. Neither her brother nor her father ever mentioned Muscat in their posts. Muscat was exposed for the lying loser that he is. He should thank his lucky stars that he’s being investigated by the Maltese judiciary.
Chang wasn’t that lucky. So next time Muscat dashes off to Dubai, as he inevitably will, that short stopover in Cyprus must be a tense wait. He must worry about the US government requesting his extradition on his involvement in the corruption committed by his two closest lieutenants, which the State Department denounced.
Extraditing Muscat to face charges in the US would be a win-win-win situation. That would be the best option for Muscat, for Robert Abela, for Labour and Malta. Muscat would have his mind at rest that his trial would be fair. He needn’t worry about biased magistrates. Abela would not have to face accusations of protecting Muscat or failing to do so.
If Muscat is found guilty, Labour would be able to finally ditch him, knowing that his trial was fair. And if he’s exculpated, they could ditch Abela and re-elect Muscat leader again.
As for Malta, it would be spared the tiresome melodrama and the grating cockiness of the consummate narcissist.
Kevin Cassar is a professor of surgery.