“I never defended Pilatus”. This was our former minister and current Central Bank of Malta governor, Edward Scicluna.
His memory must be fading fast. And needs some help.
In July 2018, the very same Scicluna declared: “The bank was given a warning. Pilatus engaged two consultants – KPMG and Camilleri-Preziosi – and asked them how to conform with regulations. Which they did.”
Malta’s minister of finance was doing precisely what he told us he never did.
He wasn’t just defending the bank. He was defending its chairman, Ali Sadr Hasheminejad. As Hasheminejad was indicted in the US for money laundering, sanctions busting and other serious financial crime, Scicluna sprang to his rescue.
“The Pilatus chairman was dealing with the enemy, from the perspective of the US. I’m not trying to minimise it. But, for me, I say, ah, it’s not drugs, it’s not smuggling, it’s not tax evasion.”
No, it’s money laundering but that’s fine for our Central Bank governor.
When the European Banking Authority announced, in July 2018, that Malta’s FIAU had breached the third anti-money laundering directive over its failure to investigate and sanction Pilatus Bank, Scicluna was on the defence. He accused David Casa of putting pressure on the EBA to investigate Malta.
“They only wanted to look at Pilatus. What they found was not money laundering. All they found was certain procedures were flawed.”
Scicluna was deviously painting Pilatus’s serious money-laundering infringements as minor procedural faults.
“These MEPs’ rule of law book does not prohibit them from pressuring Malta’s judiciary and European regulatory institutions into imposing sanctions on anything connected to Pilatus Bank, whom they decided to lynch many years ago.”
But for me, I say, ah,it’s not drugs, it’s not smuggling, it’s not tax evasion
In July 2017, Scicluna was already protecting Pilatus. When serious allegations about Pilatus’s financial crimes surfaced, the European Parliament passed a resolution calling for investigation into the bank’s licensing process. Scicluna was asked what action he would take. He answered: “Take Nemea Bank, the licence was withdrawn by Frankfurt. Will you address them?”
Scicluna defended Pilatus over years. In 2016, then FIAU director Manfred Galdes penned a hard-hitting letter warning of Pilatus’s business model of “secrecy for politically exposed persons”. The FIAU revealed “serious shortcomings placing Pilatus in breach of several provisions of money laundering rules exposing the bank and the jurisdiction as a whole to a high level of risk”.
Galdes was waving a massive red flag in Scicluna’s face. Yet, Scicluna’s MFSA did not deem this serious enough. Ruining the financial reputation of a country heavily dependant on financial services for its very survival was deemed trivial. In 2018, the MFSA was still defending Pilatus. MFSA’s enforcement director, Anton Bartolo insisted that the MFSA would not act on “rumour” or “information published in the press”. Was the FIAU’s report a “rumour”?
The European Central Bank finally shuttered Pilatus due to widespread fraud and money laundering allegations. Just prior to this, Scicluna’s FIAU had given Pilatus an overall positive review.
In 2018, a European Commission report warned that Malta had made “limited progress in addressing the 2018 country specific recommendations on money laundering, corruption and financial supervision”. The man responsible was Scicluna.
As Pilatus faces prosecution for money laundering and a record €5 million by the FIAU, Scicluna expresses his satisfaction that the FIAU, which used to fall under his remit, has finally completed its work on Pilatus.
When Pilatus’s chairman was indicted in the US, Scicluna was asked whether Pilatus’s licence would be revoked. His unbelievable answer was: “U ejja, come on, you’re going to ask these questions so early in the morning?
“When I go back to the office, we’ll start the work and see what to do”.
Presumably, the “we” were Hasheminejad’s buddies: Joseph Muscat and Keith Schembri.