The Panama Papers read like a John Grisham novel. Mossack Fonseca, a Panamanian law firm, is the protagonist in a sordid tale of global financial intrigue and criminal activity the likes of which has not been heard of since Watergate. The story broke in 2015, when an anonymous Fonseca whistleblower leaked approximately 2.6 terabytes of data to a German newspaper, the Süddeutsche Zeitung. 400 journalists and 100 media organizations later; a cover up unraveled that stretched across continents and implicated global politicians, FIFA officials, diamond tycoons, celebrities, and professional athletes; of financial and political corruption that makes Don Corleone look like Mother Theresa. The 11.5 million documents of unstoppable information, covered 40 years of money laundering, bribery, “shell” companies, VAT fraud, and tax evasion; often perpetrated unabashedly and unrepentantly by heads of states and their families. The International Consortium of Investigative Journalists (ICIJ) compiled and are still compiling electronic and physical data on 214,000 companies most of which are “shell” and owned by no one. A perfect scheme for moving funds offshore undetected and unhindered. A “shell” company was made possible with as little as $1,000. Throw in a few extra bucks and you can get a fake director to go with it. The “fast food” of tax fraud.
When the genie was let out of the proverbial bottle; nothing could stop the rapidly moving black cloud of implication that was heading toward world politicians and their states . High profile banking entities like Commerzbank, HSH Nordbank, and Hypovereinsbank; paid millions in fines for allegedly abetting tax evasion. In Israel, Bank Leumi was also implicated by the Panama Papers as having links to Fonseca. In 2014, the Israeli Bank Leumi had to pay the US Department of Justice $400 million dollars in fines for allegedly providing tax evasion to US clients. Like Jerry McGuire; journalists followed the money from Fonseca to often nameless companies and company owners that were providing financial shelter, and easy opportunity for money laundering, VAT fraud, and tax evasion. As journalistic digging continued, a map started to emerge connecting dots between Fonseca, offshore “shell” companies, and politicians. The Panama Papers spared no one and left very few countries unscathed.
The leak fallout implicated 140 politicians. Among them were Pakistan’s former Prime Minister, Nawaz Sharif who eventually was disqualified as a re-election candidate; and Iceland’s Prime Minister Sigmundur David Gunnlaugson, who resigned amid allegations that he and his wife kept an offshore company registered in the British Virgin Islands, and which eventually Sigmundur sold to his wife for $1. The company which was worth millions in bonds collapsed in the 2008 financial crises; taking with it three major banks it had issued the bonds from. Whether Gunnlaugson influenced the bonds’ worth through political clout is still unclear. His successor, Bjarni Benediktsson has also been “mentioned” as owning an offshore company and nebulous real estate holdings in Dubai.
The Panama Papers did not spare the Holy Land either. 600 Israeli companies and 850 Israeli shareholders were linked to Fonseca and exposed by the leak. The investigative newspaper Haaretz joined efforts with ICIJ in investigating possible Israeli fraud or corruption. Pursuing the money trail led to Bank Leumi and its role in aiding and abetting tax evasion for US clients. However, the one interesting Israeli caveat was Dan Gertler; diamond and mining tycoon worth millions and mentioned 200 times in the Panama Papers. Fonseca brokered the acquisition of Callery Resources for Mr. Gertler. Callery Resources is a mining “consultancy” in Congo. Controlling Callery Resources is Yitzhak Abuhatzeira, son of millionaire Rabbi David Abuhatzeira, and a close friend of Dan. One interesting observation: Fonseca conveniently seized representing Dan Gertler because of “ongoing investigations into his companies”. Fonseca registered two Panamanian companies for Dan: Burford Commercial, S.A, and Norseville Estates, S.A. Both were registered through an independent request by a Swiss law firm. Fonseca’s lack of thorough discovery procedures overlooked (that is still debatable) the fact that both companies would benefit Dan, his wife, and their children. The companies registered in the British Virgin Islands were eventually under suspicion and investigated by BVI Financial Securities Commission.
But Dan Gertler is not the only Israeli Lone Ranger of financial incongruities. Vauxhall Securities Inc, is registered in the British Virgin Islands, and Lev Leviev, owner of Lexinter International Inc also owns shares in Vauxhall Securities Inc. Beny Steinmetz, Daniel Steinmetz, and Nir Livnat own the diamond group BSGR. Diacore is part of that group, and the Panama Papers linked Diacore, Fonseca, and a close relationship between Construction Minister Yoav Galant and the Steinmetz brothers. Galant down played this relationship as being only a personal friendship. And the story continues.
An idyllic tourist island and former British Colony smack in the middle of the Mediterranean; Malta is and has always been strategically and historically important to trade and commerce. The economic pearl of the European Union. When other southern European countries piled up EU debt, Malta flourished and brought home the bacon. But was that real bacon or tainted cash? Was the successful economy hiding something more sinister and corrupt? When in early 2016, aggressive cutting-edge investigative journalist blogger Daphne Caruana Galizia broke the Panama Papers story, it was given very little attention. She always had a beef with somebody. But the lady would not let up, and like a Chihuahua hanging on a mailman’s pant leg, Daphne insisted on answers. Daphne started to draft a path from tax evasion and bribery to politicians in high places. In February 2016, Energy Minister Konrad Mizzi begrudgedly revealed a New Zealand “shell” company through Panama, and vehemently promised that by March he would release information on his assets. He would be forthright. But a few days after Mr. Mizzi’s “true confessions”, Daphne implicated Chief of Staff Keith Schembri of a similar Panamanian financial structure; also based in New Zealand. Brian Tonna, an advisor to both Mizzi and Schembri was found dealing with Fonseca on behalf of both politicians. Both gentlemen were and still are also close colleagues to Prime Minister Joseph Muscat.
Although Mr. Mizzi resigned, he was still given a position in parliament. Mr. Schembri was bolder, and twice refused to appear before the Panama Papers Committee and MEP investigative body.Mr. Schembri still remains in a powerful position, unscathed and uninvestigated. In the meantime, the Prime Minister’s wife was also implicated in a triangle of money transfers conveniently referred to as “loan payments”. Transfers went through the Azerbaijani hierarchy, three off- shore companies, and landed softly in Dubai. One of the companies mentioned in this love triangle was Engrant; a company “in tandem” with Mr. Mizzi’s and Mr. Schembri’s companies. Pilatus Bank in Malta was the holding bank for all the companies. Daphne alleged that Engrant belonged to the Prime Minister’s wife, because all uploaded personal information and details were under her name. The Prime Minister and his wife still vehemently deny all allegations.
Daphne Caruana Galizia opened a cascade of other allegations substantiated by the investigative reporting of her son, the ICIJ, and the myriad of journalists around the world. Her persistence in demanding answers from the Prime Minister and his government led to the unprecedented June 2017 call for elections. But money speaks volumes and louder than words. The vibrant economy fired up through creative government marketing, put millions of Euros in the economy, and in pockets that had little thought or regard to ethics as they made their way to buy their next yacht, villa, or offshore company. A few days after a landslide re-election of Mr. Muscat, the EU Parliament held a meeting in Strasbourg; Malta was the center of discussion and concern. MEP’s gave Mr. Muscat and his government the proverbial tongue lashing on everything from the sale of passports to rich oligarchs to openly and unabashedly promoting Malta as a tax “haven” in Malta’s national airline’s magazine: in other words, damned be ethics. The Panama Papers Committee demanded that key Malta government individuals appear before the committee: but of course none did. MEP’s put Mr. Muscat and Malta on notice: re-election does not mean “absolved from corruption”. MEP’s came close to demanding prosecution procedures against several financial entities that held questionable bank licenses or were implicated in money laundering and questionable mafia-like kickbacks. One such bank mentioned was Pilatus. The Maltese delegation to include the Prime Minister seemed to find the dressing down amusing. The EU was not amused.
But this is not only a story about the Panama Papers and the utter global political chaos that they created. This is about a 53-year-old mother who took on a mission in life to bring to justice those who are supposed to serve and protect her country. She wrote about corruption at the highest level of Malta’s government. This middle-aged Maltese mother of three decided earlier in life to take on injustice head on. Her blog Running Commentary on The Malta Independent on Sunday scathingly obliterated anything and anyone she considered corrupt, or at the very least, questioned their intentions. It was fit that she would be the one pursuing the Panama Papers leak and demanding answers of the government and those close to the Prime Minister. Daphne was also no stranger to threats. Her investigative reporting made her subject to intimidation and threats. Her family was not immune either. The family dog was killed and placed on the front door step. A sordid Godfather moment. Daphne’s audacity and fearless penchant to get to the truth caused her to be arrested, harassed, sued, and eventually killed.
This is a small tribute to Daphne Caruana Galizia, who was assassinated on 16 October, 2017, by a car bomb near her home in Bidnija, Malta. Daphne Caruana Galizia was the millennium Joan of Arc. She took up the sword through her pen and went to battle through her reporting and unrelenting insistence for the truth. Daphne was admired for her courage. I admire her for the strength and tenacity to write beyond the comfortable. Daphne lived and died for the freedom of opinion, freedom of speech, and freedom of the press. Her murderers short changed themselves thinking that that she would be silenced. Daphne is louder than ever. Her words will be heard forever because newspapers never die. Words never die. Daphne’s legacy will live through her son Matthew who helped her through her Panama Papers investigations. Her legacy will also be our legacy. It will live through us when we feel compelled to write about injustices; and like Daphne, often disregarding hate mail and threats. Why do we do what we do? Because we are convinced that the pen is mightier than the sword. That the freedom of the press is more than a newspaper on the street corner. We inadvertently become the voice of the people. Daphne’s voice will live in the hearts and minds of Malta: the country she loved so much she eventually died for.