Banking the unbankable – Kevin Cassar

Robert Abela has nowhere to hide. A 400-page report by a top money laundering investigation company, Duff and Phelps, was published yesterday.

The report was part of an 18-month-long Pilatus bank investigation that shows Inquiring Magistrate Ian Farrugia directed the Police Commissioner and Attorney General to take criminal action against Pilatus bank officials, including Ali Sadr Hasheminejad, Antoniella Gauci and Mehmet Tasli.

The list of serious offences the three officials are accused of is long – transferring proceeds of crime, converting proceeds of crime, concealing proceeds of crime, and assisting customers in enjoying the benefits of crime.

The magistrate had good reason to order criminal prosecutions. He sent his report to the Attorney General on 24 February 2021. But none of the three individuals has been prosecuted.

Worse, the Attorney General, with police collaboration, provided two of them, Gauci and Tasli, with a guarantee they would not be prosecuted. This was revealed by The Shift in January and confirmed in the book published yesterday by Robert Aquilina, President of NGO Repubblika.

Then-deputy police commissioner Alessandra Mamo scrambled to find reasons justifying the request not to prosecute Gauci and Tasli.

Mamo was overjoyed when her subordinates drew up a document to exculpate the two in record time.

“Thank you would be an understatement”, she wrote, “this report has to reach the AG by not later than tomorrow since the criminal inquest will be remitted to the OAG today and there is a lengthy protocol to obtain the nolle prosequi,” she wrote, referring to orders not to prosecute.

Antoniella Gauci, one of those exculpated, is the daughter and sister of Robert Abela’s canvassers.

The Duff-Phelps report didn’t just expose Pilatus as the bank that “banked the unbankable”. It revealed how the MFSA and FIAU decided to grant the bank a licence when “the bank was non-compliant from the moment its licence was granted”.

“It is unclear to us why the MFSA made the decision to grant a licence to the bank,” the report adds.

The Duff-Phelps report identified a litany of failures by the MFSA and FIAU. They overlooked Pilatus’ shocking breaches.

The MFSA didn’t bother discovering where Pilatus’ initial €8 million came from in January 2014. Neither did it bother determining where the next €2 million came from in September 2015.

The MFSA didn’t pose questions when a Housing development project in the high-risk jurisdiction of Venezuela cropped up.

The MFSA failed to pursue the suspicious issue of how Pilatus’ Money laundering reporting officer (MLRO) had a dual role.  Investigators were incredulous that MFSA found the selected MLRO “skilled or experienced in compliance and anti-money laundering” when she was neither.

That report found that Pilatus’s anti-money laundering policies and procedures were seriously deficient. Yet on 26th September 2016, the FIAU closed all issues.

Duff-Phelps provides some insight into MFSA/FIAU’s complete failure of oversight and the despicable decision by the Attorney General to exculpate key suspects.

“Mr Sadr appears to have had connections with certain prominent Maltese figures, including Joe Bannister (former MFSA Chairman), Keith Schembri and Joseph Muscat,” the report states.

“We recommend further enquiries are made to determine the then-MFSA chairman’s involvement in the recruitment of Mr Bauer to the bank,” it adds.

When Pilatus was struggling, the bank’s chairman persuaded Helmut Bauer, who was a Deloitte Paris consultant, to join the board as a non-executive director. Deloitte objected due to the reputational risk. But “Joe Bannister appears to have given his personal assurances regarding Pilatus bank”.

Evarist Bartolo had repeatedly and publicly attacked Bannister, calling his position as MFSA chairman untenable. But Joseph Muscat repeatedly defended Bannister.

Muscat needed Bannister to protect Pilatus.

Muscat was close to Ali Sadr.  Muscat and Keith Schembri attended Ali Sadr’s wedding in Tuscany, accompanied by Yorgen Fenech. With friends like these, Ali Sadr was sure he was safe.

So secure did he feel that he wrote to Schembri, leaving evidence of his close links to the OPM. He had no qualms demanding “Keith” intervene on his behalf to influence the MFSA and FIAU.

His arrogance is evident in an email he sent Schembri on his gov.mt address.  “Keith”, he kicks off, “it’s none of the authorisation unit’s business not to process our notification”.

It “just needs to be processed, and they have no right to hold the process”.

Muscat’s worries must run deeper. The Duff-Phelps report recommends that the alleged USD1.017 million Egrant transaction should be investigated further through US authorities and US correspondent banks.

It recommends that Maria Efimova and Dina Stankovic, Pilatus employees, be interviewed regarding the transaction and Pilatus’ alleged parallel secret accounting system and illegal actions.

Pilatus hides dark secrets. Many of its customers were linked to higher-risk jurisdictions (Iran, Azerbaijan, UAE) and high-risk activities. Many were politically exposed.

They included Keith Schembri, John Dalli, Cheng Chen, Brian Tonna, Adrian Hillman and the children of Azerbaijan’s two most powerful officials – President Aliyev and Minister of Emergencies Kamaladdin Heydarov.

A magisterial inquiry ordered criminal prosecution of Pilatus officials. Instead, the police and Attorney General gave those officials a free pass. Why?

The reasons are obvious.  This is an almighty cover-up intended to protect Pilatus officials and senior politically exposed persons linked to them.

What is most shocking is Robert Abela’s reaction. Instead of demanding resignations and a major overhaul of the police force and Attorney General’s office, Abela issued a statement defending the indefensible.

“The authorities work in complete independence and autonomy and take decisions with the power given to them by the law,” he said.

Faced with such a manifest perversion of justice, Abela declared, “The government believes in the institutions”.

Which institution does Abela believe – the magistrate who ordered the criminal prosecution of Pilatus bank officials or the handpicked Attorney General who ordered they shouldn’t be prosecuted?

We all know who we can trust. We don’t trust the police who exculpated those the magistrate wanted prosecuted. We don’t trust the AG who gave them their get-out-of-jail-free card to shield her political masters. We trust the magistrate’s findings which Abela dismisses as “allegations”.

We certainly cannot trust Robert Abela, who, in the face of incontrovertible evidence to the contrary, insists “the institutions are working” to save his skin.