Ninu Zammit was "very close" to government oil-buyer Frank Sammut
Michael Falzon resigns from Oil Procurement Committee, PN activities
Falzon refuses to say whether funds had been declared
The Malta Independent calls Tonio Fenech, Ninu Zammit, Josef Bonnici, George Pullicino, Michael Falzon and Austin Gatt
While former Nationalist Party Minister Michael Falzon has admitted to having had a bank account at HSBC Geneva, the bank at the centre of the Swiss Leaks scandal, his fellow former minister Ninu Zammit has not denied that he too holds or held a secret account at the same bank.
Following an investigation by this newsroom in which Mr Falzon was questioned about funds he held at HSBC Geneva, he issued a statement to the media yesterday to the effect that he is giving up his position as an observer on the Oil Procurement Committee and that he is also suspending himself, for the time being, from all political activities of the Nationalist Party, of which he is a member of the executive.
But although he issued a statement attempting to absolve himself from any wrongdoing associated with the account, when he was contacted again yesterday Mr Falzon, a regular MaltaToday columnist, refused to answer as to whether he had ever declared the Lm200,000 he had held in Switzerland.
But while Mr Falzon eventually admitted to having held funds at the now notorious bank, the same cannot be said of his former Cabinet and ministerial colleague Ninu Zammit.
When this newsroom contacted Mr Zammit, he did not deny holding an account at HSBC Geneva.
"Leave me alone and stop chasing me" - Ninu Zammit
Ninu Zammit, who was in the Cabinet from 1987 to 2008, except for the two years when Labour was in government (1996 to 1998), did not deny having an account in Switzerland, or at HSBC Geneva in particular, when we spoke to him. Instead, he replied tersely: "All my affairs are in order" three times and then hung up.
We rang him again the next day after obtaining his declarations of assets made to Parliament between 2003 and 2006, and which make no mention of any substantial funds or a bank account in Switzerland. Under the section 'Money Deposited in Banks', Mr Zammit listed Lm2,470 in 2003, Lm4,671 in 2004, Lm1,812 in 2005 and Lm2,464 in 2006, all at HSBC. HSBC Geneva will only open accounts for clients with very substantial deposits. Members of Cabinet are not permitted to do any private work.
Mr Zammit had declared an equity-linked deposit account of Lm20,000 (€46,500), as well as shares in a Maltese company, Leni Enterprises Ltd, which he co-owned with his brother Emmanuel Zammit. Mr Zammit also declared a €20,341 holding in an HSBC fund and 37.9713 units in an HSBC Bank Malta assets fund. His declared gross income for 2004 was Lm16,173 (€37,600).
"I am no longer in politics"
Mr Zammit sounded agitated and irritable when he replied to our telephone call the next day: "I already told you all my affairs are in order. Now please leave me alone. Stop chasing me. I am no longer in politics. If you came to me before the election, then I was still in politics, but now I am no longer involved. All my affairs are in order. And I'm going to say please, do not chase after me. I am going to hang up now. I am no longer in politics. Do you understand this? I will tell you once again, all my affairs are in order. Everything is in order. Even if I have a garage, I pay withholding tax on it. Everything is in order. Okay? I am not going to speak to you anymore. Bye."
Michael Falzon remembers he had an account at HSBC Geneva
During his telephone conversation with The Malta Independent some days ago (listen to recording at www.independent.com.mt), Michael Falzon first said he could not remember, and then admitted after some hesitation and evasiveness that he had held an account at HSBC Geneva - but said that he closed it in 2004 and that the money it held was earned through work overseas. In his statement Mr Falzon said that he opened an account in HSBC Geneva in 2002 and closed it some six years later, in 2008.
When asked whether the money had been disclosed to the tax authorities in Malta, he first tried to avoid the question and then said that he has since regularised his position. He did not say when or how this was done, or whether the money was concealed from the tax authorities for the nine-year period when he was a government minister.
Yesterday he released a statement giving more details ahead of publication of this story today. The money in his account at HSBC Geneva, he said in his statement (Lm200,000, which is the equivalent of €486,000) had been held at another Swiss bank since 1985 and was moved to HSBC Geneva in 2002. Six years later, he said, "the money was transferred to another bank".
The full text of his statement yesterday is as follows: "Between 1975 and 1985, I was involved with other Maltese professionals in an Architectural and Civil Engineering consultancy providing services abroad. These services were provided under the aegis of a Maltese registered company of which I was shareholder and director.
"The first big job that this company worked on had been entrusted to it in partnership with a Swiss architectural firm. This necessitated frequent visits to Switzerland and the opening of bank accounts to which funds were effected by the Swiss partners and eventually to the Maltese company.
"When the company was liquidated, and considering the political situation in Malta in 1985-87, I decided to retain a Swiss account in my name. I want to make it clear that the money came from payments for professional activities abroad for foreign clients that were carried out before I became a Minister in 1987 and that no moneys originating from Malta or from third parties were ever deposited in this account. In fact, I had no other foreign accounts.
"In about 2002, I decided to transfer the account to HSBC Genève and some six years later the money was again transferred to another bank. The amount of money in this account was circa Lm200,000.
"Eventually all the money in the account was repatriated to Malta and today I have no money deposited in any Swiss bank or any other foreign bank whatsoever. My fiscal position in Malta has long ago been regularised.
"Although it is evident that the said account has no connection whatsoever with my past political activities, I have decided to suspend myself for the time being from all the political activities within the structure of the PN. For the time being, I am also withdrawing from my position as observer on the Oil Procurement Committee."
Mr Falzon lost his ministerial position in the 1996 general election, when Alfred Sant's Labour Party shot to victory. He then lost his parliamentary seat in the 1998 election, when the Nationalist Party was returned to power, but was made chairman of the Water Services Corporation, a position he retained for several years.
Extensive investigation
The Malta Independent took the decision to contact these former ministers following the release of HSBC Geneva bank details for former Enemalta Corporation chairman Tancred Tabone, who is currently being tried on corruption charges. His details were released by the International Consortium of Investigative Journalists (ICIJ) as part of its ongoing Swiss Leaks project, which has made headlines all over the world because of the number of prominent figures allegedly involved in tax evasion practices and money laundering.
The HSBC Geneva data revealed that the bank had set up a Jersey offshore trust for Mr Tabone into which he transferred around USD1 million. The bankers' notes record the fact that Mr Tabone planned to transfer more funds into that account, saying that "the potential is evaluated at over USD10 million". Mr Tabone's lawyer released a statement, concurrently, claiming that Mr Tabone's "fiscal affairs, in that respect, are in order".
Mr Tabone has been charged with accepting bribes and money laundering in connection with the oil procurement scandal, charges which he denies.
George Farrugia, the witness who has been given state immunity from prosecution in return for evidence that will lead to the indictment of others, has testified under oath that he once met Mr Tabone at the Wilson Hotel in Geneva so as to hand him an envelope containing USD20,000 in cash as a "kickback" on oil procurement. He also told the court that other cash exchanges took place over lunch. Mr Farrugia claims that the kickbacks used to be shared between Mr Tabone and Frank Sammut, who was an adviser to Mr Tabone and was the chief executive of Mediterranean Oil Bunkering Corporation, the state-owned bunkering company, besides being on the government's Oil Procurement Committee.
Two years ago, MaltaToday had reported that Frank Sammut, who is also being prosecuted on corruption charges related to government oil procurement, had an account at HSBC Geneva into which "consultancy fees" were paid by the oil company at the heart of the scandal, Trafigura. The account is in the name of his company, Energy & Environment Consultants Ltd, which is registered in Gibraltar.
Given this published information that at least two of the men being prosecuted for oil procurement corruption had accounts at HSBC Geneva at the time, and working on the assumption that the accounts of other individuals who may be somehow involved could be 'clustered' at the same bank as sometimes happens in corruption networks, The Malta Independent conducted its exercise of contacting all former ministers and parliamentary secretaries who were responsible for energy, Enemalta or the energy regulator between 1987 and 2013. The International Consortium of Investigative Journalists has not released any other names of Maltese present or former public officials so far, but the information it has published shows that there were 139 accounts held by 71 clients at HSBC Geneva, which were linked to Malta, until 2006. Whistleblower Herve Falciani took the data from HSBC Geneva in 2007, and there is no information available after that date. Of those 71 Malta-linked clients, only around 24 are actually Maltese citizens.
This newsroom contacted several former Ministers who were at some point responsible for energy, Enemalta or related portfolios between 1987 and 2013: Michael Falzon, Ninu Zammit, Tonio Fenech, George Pullicino, Austin Gatt and Josef Bonnici. We asked them all point blank whether they have or ever had an account at HSBC Geneva or at any other bank in Switzerland. Tonio Fenech (Finance Minister 2008-2013), George Pullicino (Resources Minister 2008-2013) and Josef Bonnici (Economic Affairs Minister 1998-2003) all said immediately and without prevarication that they do not have, and never had, any such account at HSBC Geneva or any other bank in Switzerland. Josef Bonnici is now governor of the Central Bank of Malta.
Austin Gatt: Information is already in the public domain
Austin Gatt (Investment Minister 2003-2013; responsible for Enemalta Corporation 2003-2008) said that he never had an account at HSBC Geneva and that his sole account at a Swiss bank that is already in the public domain has been documented extensively in the media. The account is at UBS and formed part of the estate of his father, who died many years ago. His father had opened the account in 1973. His mother held the usufruct until her death more recently and it was at that point that Dr Gatt acquired possession of it.
In the 40 years since the account was opened, Dr Gatt said, there have been no transactions. The account caused a furore because he had failed to declare it to Parliament in 2005, saying that he had forgotten about it, but all details have since been fully disclosed. It is in no way connected to Swiss Leaks or HSBC Geneva, nor to money earned or otherwise obtained by Dr GATT himself.
The Ninu Zammit - Frank Sammut connection
It was Ninu Zammit, when he was Parliamentary Secretary for Water and Energy (1987-1996) who appointed the now disgraced Frank Sammut to the board of Enemalta Corporation in 1987, as well as taking him on as a personal consultant. The two are described by industry insiders as being "very close". As parliamentary secretary, Mr Zammit reported directly to Infrastructure Minister Michael Falzon.
Frank Sammut first faced corruption accusations in 1993 after allegedly receiving payments from a Swiss firm into a bank account in Jersey.
Commission against Corruption investigated Sammut in 1993
The Permanent Commission against Corruption had investigated claims made against Frank Sammut in an anonymous letter in 1993, but was unable to find any concrete evidence of corruption.
The anonymous writer said that a letter meant for Frank Sammut, from a Swiss company called Tempo, had been sent to him by mistake. The letter confirmed the transfer of money to a bank account outside Malta.
The Commission acknowledged that the letter writer appeared to have good knowledge of what he was talking about, but he did not come forward to the Commission to prove the facts he wrote about.
Among other allegations, the letter had said: "They say that (Frank) Sammut is very close to Ninu Zammit. Whether Ninu Zammit is concerned with this piece of trash or not is his problem... It may be that he is not aware of what Sammut is doing."
The Commission pointed out a number of shortcomings in the oil procurement process at the time. "When the committee meets to process tenders for the provision of fuels (tenders that have already been received by fax or telexes, in an adjacent room that was kept unlocked), it would not be difficult for someone to read these faxes or telexes and pass on useful information to bidders," it said.
The Commission noted that if this information was used in an "abusive manner at the opportune moment", it could have an obvious negative impact on Enemalta's ability to purchase fuels at the most advantageous price.
"Without throwing bad light on anyone, the Commission, based on what has been stated, thinks that it would be good that Enemalta operations and those of all other companies involved in the purchase, sale or distribution of fuels and the renting of tankers, with all that it involves, be studied by independent experts, in order to identify shortcomings (if any) that need to be fixed, and in order to recommend any improvements."
Zammit and Falzon were called as witnesses
The Permanent Commission against Corruption had called a number of witnesses to testify in the hearing, among them Ninu Zammit, John Dalli (who was Minister for Economic Affairs at the time), former Infrastructure Minister Michael Falzon and Eddie Fenech Adami, who was prime minister. Tarcisio Mifsud and Alfred Mallia were also called to testify.
The latter two are currently being prosecuted for allegedly taking kickbacks from George Farrugia before 2004. Mr Mifsud was Enemalta's chief financial officer and Mr Mallia was a member of the Oil Procurement Committee.
Zammit 'linked' with commissions for building of Delimara plant
A month after the oil corruption scandal broke in January 2013, the newspaper MaltaToday reported that Ninu Zammit was set to give evidence in a court case about kickbacks allegedly given in connection with the construction of the Delimara power plant in 1992, when he was parliamentary secretary responsible the project, reporting to Infrastructure Minister Michael Falzon.
The newspaper reported that Mr Zammit's canvasser, Paul Cutajar, had been recorded claiming to be a "front" for Mr Zammit, and that he shared "commissions" (kickbacks) on public contracts with the minister's brother Emanuel Zammit. In the same recording, he is heard saying that when he was awarded excavation contracts for the old Delimara plant, he transferred "commissions" to Emmanuel Zammit, paying them into a bank account in Jersey. Ninu Zammit held a 50%-50% shareholding with his brother in the company Leni Enterprises.
When cross-examined about this in court, Mr Cutajar admitted that it was his voice in the recording, but said that he was "lying" at the time. He was warned by the presiding judge that he was testifying under oath.
Those involved must come clean and carry responsibility -PN
Nationalist Party leader Simon Busuttil said yesterday that those involved in the 'Swiss Leaks' scandal must come clean and carry responsibility - whoever they are, in reference to The Malta Independent story.
"I have seen the press statement issued by Michael Falzon earlier today in connection with the so-called 'Swiss Leaks' scandal," Dr Busuttil said. "As I have stated a number of times over the past days, I do not consider it acceptable for people in public office or in political positions to be among those involved in this scandal.
"People in public office or in political positions caught up in this scandal -whoever they may be - must come clean and bear their responsibility at law. Furthermore, if any person on these lists has any official connection with the Nationalist Party he or she should consider himself or herself suspended immediately from the Party.
"While it is obvious that any person involved should immediately get his or her tax position 100 per cent in line with the law and pay whatever is due, I will, however, go further:
"(1) If, at any stage, these persons have breached other laws, they must come clean and bear responsibility for their behaviour.
(2) If any of their funds in the Swiss bank are due in any way to an abuse of any official position, they must pay for this betrayal of public trust to the fullest extent possible.
"I note that Mr Falzon has stated that there is no connection with his past political activities. I note also that he has suspended himself for the time being from political activities within the PN and from his position on the Oil Procurement Committee. Nevertheless, his suspension from the party itself must be considered as having immediate effect. His position on the Oil Public Procurement Committee - as the appointee of Prime Minister Joseph Muscat - has also become untenable," Dr Busuttil said.
Government urges media to come forward with information
Meanwhile, the government has urged members of the media to pass on information they may be in possession of on Maltese nationals who had an HSBC Swiss bank account to the relevant authorities so that they can investigate further.
In a statement, the government also made it clear that it had already requested the authorities of other countries to pass on information on accounts connected to Malta.