The Joe Sammut scandal has not only besmirched the good name of the accountancy profession at large, but it has also darkened the name of some of the country’s most important institutions: Identity Malta, the Malta Financial Services Authority, and, possibly, banking institutions.

The overall picture of Mr Sammut’s highly illegal cash-for-residency permits operation paints a not-so-pretty picture of a cross-institutional ring of corruption designed to provide a fast-track, no-questions-asked residency service for Libyan nationals – a service provided against a cash payment of up to €7,500 per applicant.

According to this newsroom’s information even customs agents were involved in the scam by conveniently refraining from searching certain incoming passengers’ baggage and simply taking their declarations of the amounts of cash they were carrying at face value.

This certainly does not, however, mean that the whole of the customs department was involved in the web, what it does mean is that there were certain individuals within the department who were on the scheme’s payroll. 

By the same token, this does not mean that the whole of the MFSA - where bogus companies were set up - was involved in the scam, nor was the whole of Identity Malta – where the illegitimate residency permits were issued – nor was the whole of any banking institution.

It does, however, mean that key people in each of these institutions had their specific roles to play in the issuing of hundreds of Maltese residency permits under false pretences – hence the term ‘institutionalised corruption’ that the opposition is currently bandying about.

This newsroom has been told of a tight knit circle of people involved in the scheme, in which the modus operandi is standard and all prearranged from the moment a would-be residency permit holder contacts Mr Sammut’s office to when the residency permit is issued.

Joe Sammut is apparently something of a household name among businesspeople in Libya, particularly with those linked to the former Gaddafi regime. He is seen as the ‘go to’ person for such individuals looking to set up shop in Malta for one reason or another.

According our newsroom’s information, once contact is made with Mr Sammut’s office, a 15-day visa is arranged for those interested in seeking Maltese residency permits. They are picked up at the airport and are escorted through the VIP section, where piles of cash are brought into the country, in clear violation of money laundering laws, and then to their hotel.

The next day they pay a visit to Mr Sammut’s office, where they are presented with rudimentary paperwork to fill out and photocopies of their passports are made.  The new ‘company’, with fake orders or invoices for the obligatory €100,000 threshold which qualifies one for a Maltese residency permit, is then registered at the Malta Financial Services Authority. 

And within a matter of days, they are taken to Identity Malta’s residence permit office, where Mr Sammut and his functionaries are allegedly well known, and their paperwork is processed in record speed. They are also escorted to a local bank where they set up company or personal bank accounts.

The problem with this kind of fast-track service is that it leaves very little time for proper background checks on the individuals to be carried out – potentially opening Malta’s doors to any kind of unsavoury individual from what is a lawless, war-torn country.

As far as the MFSA is concerned, this newspaper is reliably informed that the Malta Financial Services Authority has been concerned over Mr Sammut’s dealings for months now, and that it has been drawing the attention of the relevant authorities to the matter.

The government has a lot to answer for, and so does the previous government if the scam had been going on for that long.  While it is understandable that the authorities may be reticent on commenting on the case given ongoing investigations and court proceedings, the government must state unequivocally that this kind of shady business will not be tolerated and that this ring will be prosecuted with the full force of the law.

After all, this happened under its watch and some of its key institutions were involved – particularly Identity Malta, the same agency that vets, approves and grants Maltese citizenships under the Individual Investment Programme.  That agency had promised the best due diligence system in the world for the cash-for-passports system. 

Giving the agency the benefit of the doubt, we will assume that proviso applied only to the IIP, and not necessarily to its other services, such as residency permits, where its due diligence not only failed, but has been shown to have failed miserably.