Former minister and tax-avoider Michael Falzon last week expressed his “certainty” that his name did not feature on the Swiss Leaks list of those who held a secret Swiss HSBC bank account, yet The Malta Independent on Sunday can confirm that his certainty is certainly unfounded.
Paving the way for his return to his weekly newspaper review on PBS and his column in MaltaToday after a seven-month hiatus following the publicity about his tax avoidance, Mr Falzon was quoted in that same paper as saying: “I am now certain that I was not on the so-called ‘Swiss Leaks’.”
A quick perusal of this list – available to The Malta Independent on Sunday thanks to a partnership with the International Consortium of Investigative Journalists (ICIJ) – clearly shows that Mr Falzon is on it, together with his wife.
The HSBC account in question was opened in 1999 when Mr Falzon transferred his holdings from another Swiss account. The HSBC account was closed in 2004 and the funds repatriated under a government tax amnesty, at a time when he still held public office and was answerable to Cabinet as chairman of the Water Services Corporation.
Mr Falzon avoided taxes during his long career as a Nationalist politician and even stood by when his fellow Nationalist MP Lino Gauci Borda was criticised – and eventually resigned – after being found to have a UK investment account that he had not declared for taxation purposes.
Mr Gauci Borda resigned from Parliament four days after his secret account came to light, at a time when Mr Falzon was a government minister.
Mr Falzon only admitted to holding a secret Swiss bank account when contacted and confronted about it by The Malta Independent on Sunday earlier this year.
He issued a statement about his secret account a few days later, explaining that the €486,000 held in the account came from “professional activities abroad for foreign clients” before he became a minister in 1987.
He down-played the whole affair as being merely a case of not having declared his Swiss account in his ministerial declaration of assets, rather than admitting to outright tax evasion during his time as an elected member of Parliament.
Investigating further, The Malta Independent on Sunday obtained Mr Falzon’s tax returns from his days in Opposition in the 1970s.
The tax returns were obtained from the Inland Revenue after The Malta Independent on Sunday requested them from the Speaker of the House of Representatives. The Income Tax Management Act allows the press to request income tax returns filed by Members of Parliament past and present.
These show returns from his profession as an architect of €568 in 1976, €724 in 1977, €766 in 1978, €416 in 1979 and €528 in 1980.
From 1981 to 1985, Mr Falzon claimed net earnings from his profession of €5,464, €7,763, €2,210, €10,158 and €10,468. In total, he declared €39,065 from professional earnings to the tax man between 1976 and 1985, a far cry from the €465,000 held in his secret Swiss bank account.
If the money in his Swiss account really did come from his ‘professional activities’, then Mr Falzon was evading a significant amount of tax.
His position has since been ‘regularised’ through a government tax amnesty.
At no point were any foreign bank accounts listed in Mr Falzon’s income tax returns.
By way of example, Mr Falzon ‘remembered’ to declare his wife’s savings account containing €2,641 yet ‘forgot’ to tell the taxman about his Swiss account.
Coupled with his false tax returns, Mr Falzon also breached the Ministerial Code of Ethics and lied to former Prime Minister Eddie Fenech Adami by not declaring his Swiss accounts in his asset declarations to the Cabinet.
He later apologised for these “omissions”, saying that he had failed his Prime Minister and colleagues, as well as the electorate.
Last week Mr Falzon told MaltaToday that he was formally investigated by the Tax Compliance Unit, but has not been informed of any “outstanding issues”.
Questions sent to the Inland Revenue regarding the course of its investigations into individuals featured on the Swiss Leaks list remained unanswered at the time of going to print.
Mr Falzon currently serves as the honorary president and consultant for the Malta Developers Association (MDA).
He was present for a pre-budget meeting with Prime Minister Joseph Muscat last month, during which a number of tax-related proposals were put forward by the MDA.
Mr Falzon is still suspended from the Nationalist Party and he had suspended himself from his position on the Oil Procurement Committee.