Pilatus Bank officials today face trial for money laundering and financial crimes. The defunct bank itself is slapped with a multi-million euro fine for almost entirely flouting anti-money laundering laws. But that Pilatus Bank was riddled with alleged illegalities is not news.
The only update is that proceedings against them are only now in motion, action which would have been welcome before Daphne Caruana Galizia was allowed to be assassinated.
Today, Pilatus’ legacy is a humourless reminder of state takeover and a persistent denial in addressing crime and corruption and the institutional weaknesses that have been identified and exploited by Joseph Muscat’s Labour government.
The concerted efforts to protect Pilatus Bank at the expense of Malta’s democracy can never be expunged from the record.
For years, alleged criminals were entertained, not detained, despite pressure. Keith Schembri and Muscat attended the wedding of a banker whose track record is infamous on either side of the Atlantic. Ali Sadr Hasheminejad was flagged by the Maltese FIAU years ago.
My colleagues and I fought every step of the way to assign political pressure on the regulatory authorities to do their job, for Malta’s sake. Instead, Muscat did everything in his power to silence us. Because what Pilatus Bank did was more than a series of errors; it enjoyed protection from Muscat’s government.
Pilatus Bank’s clientele is telling: Schembri, Brian Tonna, Adrian Hillman – all under criminal investigation, family members of one of Europe’s worst dictators, the Aliyevs, and Chen Cheng, allegedly embroiled in the embezzlement of millions from the Maltese taxpayer through Electrogas.
The rules for money laundering are stringent. Yet, Pilatus Bank was allegedly compliant about 3.5 per cent of the time. This would mean that for 12 days in a year, Pilatus Bank obeyed the law and breached it every other day.
What repercussions followed?
For starters, attempts at cover-ups were in overdrive. ONE ‘News’ gaslit the Maltese public with scathing mockery of anyone who spoke about Pilatus Bank. Edward Scicluna, today Malta’s top banker, played his part, too.
The cover-up was not victimless. Journalists, activists, whistleblowers and politicians were hounded and hunted down for their work. Caruana Galizia was assassinated for investigating this nefarious web of crime. The public inquiry into Daphne’s murder cannot be separated from Pilatus Bank, which is only one piece of a broad puzzle.
This inquiry slammed Muscat’s entire cabinet for failing to assure good governance and the rule of law. They are equally guilty for destroying Malta’s reputation not just as a financial centre but as a serious democracy.
Today, Robert Abela’s administration is keen to brush over this as a failure of regulation. But Pilatus Bank and the subsequent reputational collapse go well beyond a failure of law. Not to mention that, unlike what Edward Zammit Lewis asserts, this is not a problem that can be solved with cosmetic changes that in themselves threaten constitutional principles. Concentrating power to the same institutions that snapped under political pressure is an aggravation, not a solution.
ONE ‘News’ gaslit the Maltese public with scathing mockery of anyone who spoke about Pilatus Bank- David Casa
That things appear to be moving now is not redemptive of Abela’s administration. The proceedings are undoubtedly damage control in reaction to FATF’s greylisting. It was a catastrophic response by the international community over Malta’s total lack of willingness to do anything to prosecute high-level financial crime for which the evidence was overwhelming and in the public domain for years.
We knew in 2017 that this was because the Labour Party and its key members benefitted from the same alleged crimes for which their government was responsible to prosecute.
AML laws are tools to combat the worst financial crimes, organised crime and high-level corruption. The Maltese taxpayer has been most heavily hit financially from a lack of seriousness about fighting corruption. And, yet, small business owners and ordinary citizens are now bearing the brunt of it. Serious financial institutions are cutting ties with Malta and heightened due diligence is making it next to impossible for professionals to deal with clients.
Making it more difficult for small business owners to operate can never be a substitute for ensuring justice for those at the highest levels of power who abused the electorate’s trust to rob the Maltese people blind. That it has become a Kafkaesque nightmare to open bank accounts for SMEs does not impress anyone. And it certainly won’t impress the FATF that resources are being dedicated to curbing smaller infringements over the elephants in the room.
While writing this article, I came across a headline about Finance Minister Clyde Caruana warning citizens that the government is going to get tough on financial crime and tax evasion. Caruana makes this statement with a straight face, pretending that there isn’t an alleged bank robber and recipient of big bags of undeclared cash from an alleged murder mastermind in his own parliamentary group.
The convoluted saga of both Labour administrations over the past eight years is testament to the fact that solving the disease of criminality in Malta is about more than just law and government. Invariably, it’s about politics.
The only way for Malta’s reputation to be cleared is for them to have already vacated their office.
While Labour continues to deny its long and troubled history of wrongdoing and while Abela remains obliged to his predecessor, Malta will remain trapped in a dangerous spiral.
A spiral that will see honest citizens being thrown under the bus and from which it will take years to recover.