The Malta Independent 3 February 2023, Friday
View E-Paper

In recusal case, psychologist explains why magistrate’s family ties are binding on her views

Monday, 5 December 2022, 16:30 Last update: about 3 months ago

The FIAU had closed its investigation on Pilatus Bank in 2016 just less than a month after its chairman emailed former OPM Chief of Staff Keith Schembri, complaining about the financial crime investigation unit's "wrong allegations."

Repubblika president Robert Aquilina exhibited documents showing that the court expert appointed to examine MFSA email accounts as part of the magisterial inquiry into Pilatus Bank, had discovered correspondence from 2016 between Pilatus owner Ali Sadr Hasheminejad and Schembri.

ADVERTISEMENT

The bank was at the time setting up a UK branch but the MFSA had halted the so-called "passporting" process after the FIAU flagged issues during an on-site review. "Without these simple rights we are not counted as a European bank and will lose credibility and viability with our corresponding banks as they are already baffled," Sadr told Schembri.

"For the life of me I don't see what the heck the MFSA has with the FIAU's wrong allegations. It's none of the authorization unit's business, not to process our 'notification.' This is not an application, it's a simple notification by law and that's why it doesn't need an 'approval' and just needs to be processed and they have no right to hold the process."

The emails emerged in a marathon court sitting before Madame Justice Audrey Demicoli presiding the First Hall of the Civil Court in its Constitutional jurisdiction, in Repubblika's Constitutional case filed over a magistrate's refusal to recuse herself from hearing the challenge proceedings filed by the NGO over the State's failure to prosecute Pilatus bank officials.

Challenge proceedings are normally assigned to Magistrate Nadine Lia, but Repubblika objected to her presiding over this particular case, initially in view of her family ties to former prime minister Joseph Muscat's personal lawyer Pawlu Lia, but also due to its subsequent discovery of video of Lia publicly endorsing Muscat while she addressed a 2017 election rally, some two years before her appointment to the bench.

Neuropsychologist witness explains how the brain processes bias

Neuropsychologist Dr. Rebecca Gorrieri, who holds a PhD in applied neuroscience was first to testify today, giving evidence via video link, and summoned by Repubblika to explain what scientific research has revealed with regards to the process of decision making and bias. 

"Preconceived ideas and unconscious biases can be highly problematic as they happen at an unconscious level, even with the best intentions in mind," she said. "It is an unfortunate consequence of the way in which the human brain sorts through stimuli... using automatic unconscious methods to process information, known as 'schemas.'

Repubblika's lawyer Jason Azzopardi asked about studies on unconscious bias in a courtroom. "A courtroom is no different from any other social context... the question of how to overcome this unconscious bias takes on particular urgency." 

Gorrieri said studies showed that most judges' belief in their own objectivity puts them at risk of behaviour in a way that undermines this belief, the witness said. "No matter how much training you may have about overcoming biases, it will persist."

"Subconscious biases are part of us. Our environments create these biases which are more powerful than our consciousness. When dealing with things which are perhaps personal to us or known to us... no person can somehow train themselves to attenuate the effects of these biases."

Gorrieri was cross-examined by lawyer James D'Agostino from the Office of the State Advocate, who asked whether the present judge's reaction to being insulted and attacked, would also be a reaction or an unconscious bias. "Her reaction would be dictated by her schemas which include her unconscious biases," replied the expert.

Gorrieri said that biases can "never ever be removed from our thinking processes. No individual is able to surmount their own biases - we can be aware of them and the fact that they are influencing us and use that knowledge to act accordingly."

"... When we are put in a situation where we have subjective and personal connection of course we are even more biased. The closer to home, the greater the biases."

Republika president Robert Aquilina

Repubblika president Robert Aquilina told the court that after Pilatus was shut down following the arrest of owner Ali Sadr Hasheminejad in the United States, and a magisterial inquiry directed the police to prosecute the bank itself, he came into possession of documents from the magisterial inquiry.

Aquliina testified that the inquiry had recommended that Hasheminejad and five other officers 'amongst others' be prosecuted for money laundering, criminal conspiracy and other crimes, besides the prosecution of the bank and its MLRO. 

American financial consultancy firm Duff and Phelps, engaged as an independent expert as part of the magisterial inquiry, had recommended the court seek further information from the US authorities or correspondent banks so as to confirm whether the alleged $1.017 million "Egrant" transaction - from the Aliyevs of Azerbaijan to the Muscats - had taken place, and to interview bank whistleblower Maria Efimova and another Pilatus employee, Dina Stankovic. These recommendations had been endorsed by the inquiring magistrate.

"Duff and Phelps underlined the close relationship between Hasheminejad, Keith Schembri and Joseph Muscat. It is amply documented and reported that the former Prime Minister and his Chief of Staff had been present for Sadr's wedding in Italy," Aquilina said.

"Even had the bank worked with all possible diligence, the nature of the business model it adopted constituted a high risk of money laundering and the financing of terrorism... It would have needed the FIAU and MFSA to monitor the bank closely and carry out regular inspections. This did not happen and is documented in the magisterial inquiry."

After the FIAU put a hold on passporting activities for Pilatus's overseas expansion, Hasheminejad started emailing Schembri. After that, the FIAU investigation mysteriously stopped around the time that Manfred Galdes stepped down as director of the FIAU in 2016. "Taken together these indicate the existence of the crime of trading in influence... Ali Sadr sought the intervention of the OPM's Chief of Staff to help him obtain a banking licence and Keith Schembri complied," Aquilina said.

The challenge proceedings

Repubblika then filed challenge proceedings against the Commissioner of Police, over the failure to charge the individuals named in the inquiry.

But Aquilina said it was unacceptable for the case to be assigned, automatically, to Nadine Lia as magistrate given that she was married to the son of Joseph Muscat's personal lawyer. They asked her to recuse herself. "Six months have now passed and we are still yet to give evidence about the case itself," Aquilina said, explaining that in the intervening months, the case had evolved.

"It began as a fear-based-on-an-objective fact, but it evolved into hostility from the magistrate," he said, accusin the magistrate of having lied while dictating her description of what had happened during a particular sitting. "Mr. Justice Ian Spiteri Bailey had examined the case file and noted that the decree she cited was nowhere to be found in the acts."

"Then the magistrate had attributed a false fact to me, personally," Aquilina said, calling it a breach of Repubblika's right to a fair hearing.

"As Magistrate Nadine Lia is daughter in law to the lawyer for Joseph Muscat and Keith Schembri, she could never provide the guarantees of impartiality required by the Constitution," Aquilina said, pointing out that the Pawlu Lia had also set the terms of reference for the Egrant inquiry.

Aquilna also said that in June 2022, Pawlu Lia confronted him in Valletta in an aggressive manner. "He said 'what has my family done to you? You must leave my family alone.' He implied some form of consequence and told me 'you are not a decent man'. After this confrontation, which lasted around 10 minutes, Lia left, only to turn back for a second go, and it was I who told him to act with decency."

Aquilina also told the court that Lia stood to inherit a portion of Pawlu Lia's estate as spouse to his son, saying this represented a direct financial interest in the outcome of the case.

He said that in 2017, Lia - prior to becoming a magistrate - has also addressed a Labour Party rally in Rabat, urging voters to elect Joseph Muscat, merely two weeks after the Egrant allegation had been published by Daphne Caruana Galizia. "48 hours before she made that address, Muscat had appointed her father-in-law to draw up the terms of reference of the Egrant inquiry. Had it not been for 'Egrant', Nadine Lia would not have been at Rabat that day," Aquilina testified.

Aquilina added that the Lia repeatedly tried to get him to reveal the source of his information, ordering the police to investigate the leak, describing his information as hearsay and gratuitous. When Aquilina exhibited the documentary evidence, the magistrate asked the police commissioner and the Attorney General whether they had given him copies of the documents. "This is a fallacy as it need not necessarily have been them and showed bad faith on her part."

Aquilina also said Lia had not noted down in one of her decrees Repubblika's recusal request. "I'm sorry to say that this is a lie, because I was in the courtroom the whole time and she had even looked directly at me."

The damage which could be inflicted if the magistrate continues to hear the challenge proceedings goes beyond impunity, he said.  "I have no hope that Nadine Lia would take the same line as Mr. Justice Falzon Scerri [who refused a separate attempt by the State Advocate to force him to reveal the source of his information]. She would likely declare me to be in contempt of court, with the prospect of detention [in prison]."

Further delays in hearing the challenge proceedings would mean more time for impunity and injustice and lead to more offences being time-barred. Two of the crimes are likely already time-barred, he said.

"All we want is a judge who is impartial... we are not interested in forum shopping. Out of all the magistrates in Malta, only one has an interest and has shown this hostility towards us."

He asked the court for a remedy and that the principle be adopted to ensure justice is done and is seen to be done.

State Advocate cross-examines

Lawyer James D'Agostino accused Repubblika of embarking on a campaign which attacked the magistrate and her integrity. "This was because she was denying us our rights," Aquilina replied.

D'Agostino reminded the witness that he had described Pawlu Lia as "il-pastaz tal-Prim Korrott."

The witness explained that this was not Repubblika's position. "I started to use that word in Lia's regard after the case began. Firstly because he was very rude to me and embarrassed my friend. But 'pastaz' also means that a person does another's bidding, and Lia did provide services to Muscat."

D'Agostino asked whether it was true that Repubblika had asked for the removal of Pawlu Lia from the Commission of the Administration of Justice. "Joseph Muscat placed him in that position and Robert Abela kept him there. We feel that his presence there remains a threat to the administration of justice," Aquilina replied.

Aquilina also confirmed that Repubblika had reported the magistrate to the Commission for the Administration of Justice for unethical behaviour and had publicly called for her impeachment.

"So the magistrate's only sin is her family relationship with Pawlu Lia?" suggested D'Agostino. "I have been on this witness stand for an hour and a half explaining why and you have just picked on the first reason," Aquilina said.

"I must add that Pawlu Lia has a reputation for antagonism and perpetual anger," said the witness.

D'Agostino asked whether the witness had tried to antagonise Pawlu Lia through speeches and videos and statements. "You are confusing this matter with legitimate criticism," Aquilina replied. "I am not alone in holding this view. I have been approached by editors as well as foreign diplomats about him."

Pawlu Lia testifies

Lawyer Pawlu Lia also testified, having been summonsed by the State Advocate.

He confirmed speaking to Aquilna, but denied having approached him aggressively. He said he had now not seen his daughter-in-law for a long time and his grandchildren had to see him at his office. He said he was hurt by what he called untrue allegations.

Cross-examined, Lia conceded to having been Keith Schembri's lawyer, as this was in the public domain, but refused to reply as to whether he had assisted Joseph Muscat in the Vitals inquiry.

Lia was then asked to leave the courtroom while the lawyers discussed a point.

Repubblika lawyer Jason Azzopardi told the court that when Repubblika had filed its request for the VGH inquiry, Muscat's reply was signed by Pawlu Lia and Charlon Gouder. His question about this was allowed by the court and Lia was called back into the courtroom.

But he said "it is not in the public domain and so I don't want to say yes or no."

The sitting was adjourned to December 30 for written submissions. Judgment will be delivered in the New Year.

Lawyers James D'Agostino and Isaac Zammit appeared for the State Advocate.

Lawyer Jason Azzopardi represented Repubblika.

 


  • don't miss