Pilatus bank was fined 5 million euro by the FIAU for “very serious and systemic failures”. That’s putting it politely.  The bank was a money-laundering haven. Just 15 clients transacted 390 million euro.  The bank’s financial statements recorded only 23.5 million comprehensive income.

Pilatus and its compliance head Claude Ann Sant Fournier are charged with money laundering.  FIAU concluded that Pilatus failed its obligations in 96.5% of cases. 86% of customer files had “extensive failures”. This level of failure cannot possibly be missed.

Yet the FIAU informed Pilatus Bank in September 2016 that “shortcomings previously identified, no longer subsist”. In short, FIAU gave Pilatus Bank a clean bill of health.

How was this possible? Knowing the extensive level of wilful laxity at the bank, there is only one of two explanations for the FIAU’s 2019 appalling decision.

First, FIAU inspectors conducting on-site visits were so grossly incompetent that they were hoodwinked by bank officials.

The second is that somebody with enormous power provided protection enabling it to proceed with its crimes. The evidence supports the second explanation.

Manfred Galdes, FIAU director, discovered money laundering activities at Pilatus. These involved Keith Schembri,  Brian Tonna and Adrian Hillman. Galdes was so concerned that rather than go through the police liaison officer Ian Abdilla, went straight to commissioner Michael Cassar with two damning reports.

While Galdes was still at FIAU, on-site inspections at Pilatus identified very serious shortcomings. At the Caruana Galizia inquiry, Galdes testified that Pilatus officials withheld information that was required to conduct due diligence.  Ali Sadr Hasheminejad, the bank’s chairman, challenged FIAU’s findings and “kept blaming employees for not supplying information”. A letter dated 17th May 2016 listed the gross shortcomings at the bank.   A further follow-up visit was carried out in August. But around that time, Manfred Galdes resigned.  The date and reason for his resignation were never divulged, his resignation letter never published.

Rid of Galdes, acting-director Alfred Zammit made a stunning U-turn. The massive failures Galdes identified only a month earlier were now judged to have been resolved. “The FIAU confirms that the issues raised are now closed”. Such a dramatic turnaround was impossible. This week’s FIAU report clearly exposes Zammit’s September 2016 letter as an utter sham.

Pilatus’ money laundering failures are staggering.  But they fade into insignificance compared to the real crime - the protection of a criminal financial organisation. What really matters is who ordered FIAU to let Pilatus off the hook? Who ordered the police to bury the money laundering reports?

Sadly, the evidence points at the usual suspects.

In 2015, Joseph Muscat, Keith Schembri and Yorgen Fenech travelled together to Florence to attend Hasheminejad’s lavish wedding at Four Seasons Hotel. They stayed at Roccoforte Hotel at the expense of Hasheminejad. In 2018 Muscat confirmed his attendance - but failed to disclose he had travelled with Yorgen Fenech or that Hasheminejad paid for his stay. At the Egrant inquiry, Muscat dishonestly claimed that he only attended because he wanted to speak to the CEO of Coca-cola.

Galdes was still actively investigating the suspicious transactions at Pilatus. But he needed more resources. He spoke to the permanent secretary who agreed and spoke to Minister Edward Scicluna. When Galdes called the Office of the Prime minister to inquire about his promised reinforcements he was told that “an order came through to stop everything”. Galdes testified that “it was rather suspicious, since it was at the time we were investigating these cases”. When asked about undue pressure, the testimony continued behind closed doors. Galdes however mentioned “freezing orders because of who was involved”.

For years, Labour used ONE to protect Pilatus. On 25th April 2017 it accused Simon Busuttil of “a campaign of lies and science fiction” when he raised concerns about the bank. With a picture of Alice-in-wonderland looking at the Electrogas power station ONE news commented that “from a dream, became reality”.  The following day ONE published memes ridiculing the concerns raised about Pilatus.  Jean de la Vallette, Michael Jackson, Tupac  were all seen at Pilatus bank it mocked. In September 2018, Silvio Schembri claimed that the European Bank Authority’s condemnation of the FIAU for breaching anti-money laundering legislation was a “confirmation of the health of Malta’s institutions”. Alfred Sant was busy attacking Commissioner Yourova and defending Pilatus.  In November 2018 he claimed “Pilatus bank is a small bank - it is small fry”. In January 2019 he objected to Yourova’s reference to the Pilatus case. In March he complained that “the Pilatus case is being given huge importance”.

ONE persisted with its lies claiming it was Tonio Fenech who brought Pilatus to Malta.  The bank’s licence was issued in 2014, a few months after Muscat’s electoral victory.

But it was Saviour Balzan who was Pilatus’ staunchest defender. In Illum (12/11/2017) Balzan bragged that he was publishing the FIAU Pilatus report - “the case is now closed” he declared.  The FIAU he claimed “did not find anything incriminating”. He too blamed Tonio Fenech for “encouraging Pilatus to come to Malta”.  His proof was that at Hasheminejad’s wedding there were directors of Maltese newspapers. His information of wedding guests could only have come from one source.  Balzan falsely claimed that the original FIAU investigation was based on “suppositions” and “allegations” and attacked Manfred Galdes for not having “concrete evidence in hand”. Balzan concluded that the bank had a “a clean bill of health”.

Balzan defended illegally publishing the FIAU report on grounds of “serving the public to ensure that the whole truth reaches the readers”. Balzan’s piece was littered with lies.

In March 2019, Minister Edward Scicluna told the institute for financial services practitioners: “The Panama papers scandal is history now”. No, it will only be history once his role and that of Keith Schembri and Joseph Muscat in the Pilatus Bank scandal is exposed, only when the real culprits pay the price.