16 October 2017
Daphne Caruana Galizia
Exposure of illegal activity
Daphne Caruana Galizia
Federico Del Prete
José Ángel Flores
Jules Koum Koum
María Elena Ferral Hernández
Peter R. de Vries
Soe Moe Tun
16 October 2017
Exposure of illegal activity
On 16 October2017, Daphne Caruana Galizia was killed by a powerful car bomb minutes after leaving her home. Caruana Galizia was Malta’s best-known and most widely read journalist – and also its most divisive. Her investigations routinely set the national agenda. Her most sensational case – alleging links between the prime minister’s wife, a Panama shell company and suspicious transactions from the Azerbaijani regime – forced a snap election four months before her assassination.
To her critics, Caruana Galizia was a ‘hate blogger’ and a ‘poison-pen writer’ – the ‘witch of Bidnija’. The vitriol was, in part, the result of ferocious tribalism within Malta’s bipartisan political system. The journalist starkly opposed the Labour Party, which had swept into government in 2013. The other part had to do with her style, which juxtaposed investigative reporting with fiercely opinionated commentary, salacious titbits and intensely personal attacks on her political opponents. Once, her house was set on fire while her family was asleep inside, and Caruana Galizia faced constant threats. At the time of her death, she was the subject of 43 libel cases – many brought by government officials.
So, even as the country was reeling from the news of her murder, some openly welcomed it. In the aftermath of her death, Caruana Galizia’s opponents directed their anger at her family for linking the murder to a weakening in Malta’s rule of law. One theory even held that the family had orchestrated her killing – ostensibly, according to some, to destabilize the government.
‘We were given no time to grieve,’ said Matthew Caruana Galizia, the eldest of her three sons and part of the Pulitzer Prize-winning team of journalists behind the Panama Papers investigation. He is now also a leading figure in an intensified rule-of-law campaign. ‘There was one day, for literally 12 hours, when we just sat at home talking to each other. That was 17 October. And during that time, the government was going on the offensive against us and against my mother. That’s when we realized we couldn’t let things be, or there would definitely be no justice.’
Justice has become a watchword since then. Three men have been arrested and charged with executing the murder. They’re pleading innocent and have yet to face trial. Meanwhile, the suspected masterminds remain at large.
A Council of Europe report raises ‘serious concerns’ over the investigation and the rule of law in Malta. Caruana Galizia’s family and civil-society groups have called for an independent inquiry, but the government has resisted, insisting it would affect ongoing investigations. Vigils are held on the 16th of every month in the capital city, Valetta, but the authorities routinely remove the flowers and candles left at a makeshift memorial.
Justice, so far, remains elusive. Matthew says two types of justice are needed: ‘Justice for my mother’s murder – and justice for her investigations. We can’t have one without the other.’
Malta has witnessed a recent surge in gang-type violence, and Caruana Galizia’s murder was one in a string of car bombings since 2016. Most of those attacks targeted organized-crime figures, and were associated with drug trafficking and the lucrative, large-scale smuggling of diesel from Libya to Malta and Italy. This trade emerged after the Libyan revolution of 2011.
Caruana Galizia had written about this underworld, sometimes naming traffickers and highlighting the links that made up their networks. However, it was never the main focus of her investigations, and her family dismisses suggestions that she had been working on such a probe before her murder.
Her interest was far broader. As she saw it, Malta had been captured by criminal interests and was morphing into a mafia state where organized crime was allowed to take root with impunity and the complicity of the highest level of government. Matthew explains: ‘Whereas in Sicily organized crime is a phenomenon that exists in opposition to the state, in Malta it is part of the state itself. It is horizontally and vertically integrated across the state and business.’
The nexus between politics, business and crime had long been a significant focus for Caruana Galizia, but the release of the Panama Papers investigation in 2016 increased the stakes. Cabinet minister Konrad Mizzi, then responsible for energy, was named in the investigation – as was Keith Schembri, the prime minister’s chief of staff. True to style, Caruana Galizia drip-fed the findings in provocative posts ahead of the full release.
The story she was investigating is complex and still unfolding. What is now known is that companies owned by Mizzi and Schembri in Panama planned to receive payments of $2 million from a company in Dubai. This company, 17 Black, is owned by the Maltese director of a new €450 million gas power station, which was a key pledge in the government’s 2013 electoral campaign. 17 Black had received payments from the local agent for the liquefied natural gas (LNG) tanker fuelling the power station, as well as an Azerbaijani security guard. Socar, the Azerbaijani state-owned energy company, supplies the power station. All the parties involved deny any wrongdoing.
Meanwhile, a separate money-laundering inquiry is investigating payments which, according to Malta’s financial intelligence unit, may have been kickbacks from the country’s citizenship-by-investment, or ‘golden passport’ scheme.
‘What we’re really speaking about is an organized-criminal group. These are not people acting independently or randomly,’ says Matthew. ‘The government is an entity embedded within that group.’
In the months before her assassination, Caruana Galizia published a further, incendiary series of reports. She claimed that the prime minister’s wife, Michelle Muscat, owned a Panama company and had received a €1 million payment from the daughter of Azerbaijan’s president. Prime Minister Joseph Muscat called it the biggest lie in Malta’s political history. To stave off a political crisis, he called an election and an inquiry, and pledged to resign if a shred of truth was found. The election returned him to power and the inquiry, concluded after Caruana Galizia’s death, failed to find evidence to support the allegation.
Caruana Galizia’s murder has deepened the polarization in Maltese society, and framed the political debate more sharply around the rule of law. This has given rise to new civil-society groups, with names such as Occupy Justice and Republikka (Republic). Through public pressure and court action, these groups seek justice for her murder, and scrutiny of Malta’s institutional failings.
A Council of Europe report published in May 2019 concludes that ‘Malta’s rule of law was severely undermined by a weak system of checks and balances’. It highlights concerns over the murder investigation, noting that key players ‘seem to enjoy impunity, under the personal protection of Prime Minister Muscat’. It describes the anti-corruption body as ‘utterly ineffective’ and notes that the police force is not perceived to be ‘politically neutral in the service of the state’.
It is not yet known who killed Caruana Galizia, and how the murder may be linked to her reporting. To her family and campaigners, there is no question that whether or not the government had any connection to the murder, it facilitated an environment that made the murder possible.
‘In protecting people we know to be criminals, the prime minister created an atmosphere where serious organized crime is permissible,’ Matthew says. ‘Because he prevented any judicial action against these people, the only stone in their shoe was my mother.’
October 2020 update
Shortly before dawn on 20 November 2019, one of Malta’s foremost businessmen, Yorgen Fenech, was arrested on suspicion of ordering the murder of Daphne Caruana Galizia. Fenech was intercepted aboard his private yacht by Malta’s armed forces as he allegedly attempted to flee the island, a day after the prime minister had announced that the self-confessed middleman in the assassination plot had been offered a presidential pardon to turn state witness.
Until his arrest, Fenech was the head of one of the country’s largest property and investment conglomerates and an extremely powerful and well-connected figure. Caruana Galizia had never named him in her reporting, but an offshore company he owned, 17 Black, had been a major focus of her investigations due to its alleged links — still being revealed in their entirety — to two, now former, top government officials: energy minister Konrad Mizzi and the prime minister’s chief of staff Keith Schembri.
Fenech’s arrest marked a turning point in a murder case many had feared stalled.
Demonstrators immediately took to the streets for what would become the most vociferous and sustained protests of the country’s recent history. Within days, Mizzi and Schembri had resigned their posts, having defied calls to do so since their own offshore structures were revealed in the Panama Papers leaks in 2016. Prime minister Joseph Muscat, who had been re-elected by an unprecedented majority just two years earlier, stepped down in January amid pressure over his handling of the case.
In the months since, Malta has been witness to a near-daily stream of revelations on the murder plot and its aftermath — dominating the national agenda — from two key court proceedings, both ongoing: the compilation of evidence against Fenech, who is pleading innocent, and a public inquiry, long resisted by the government, into whether the state caused a risk to Caruana Galizia’s life.
Schembri’s name has featured prominently in these proceedings. The former chief of staff was arrested and questioned shortly after Fenech’s arrest in December but has not been charged with any crime. Police say he remains under investigation over tampering with evidence, leaking extensive information about the murder investigation, obstructing justice and other potential offences. By the end of September, a court ordered a freeze on all assets held by Keith Schembri after the conclusion of an inquiry, which is not yet public, into an alleged €100 000 kickback on Malta’s ‘golden passport’ scheme (citizenship by investment). Later, Schembri was placed under arrest. The court also froze assets belonging to Karl Cini and Brian Tonna, accountants at Nexia BT, the company which was at the heart of the Panama Papers scandal in Malta.
Melvin Theuma, the middleman, a taxi driver and figure in the illegal gambling world who was hospitalized in late July after he was found inside his home with stab wounds to his abdomen and neck, held secret recordings of conversations with Fenech after the murder. In these, Fenech claims that Schembri, a close personal friend, was regularly feeding him information on the ongoing investigations. Schembri is known to have been present for briefings between the prime minister, police and security services. He is alleged to have passed further messages to Fenech after the arrest, briefing him on what to tell investigators. Schembri has admitted to a phone call with Fenech the night before his arrest, which he says was on the prime minister’s instructions and intended to prevent Fenech from leaving the country.
The links between the two men and Caruana Galizia’s investigations became clearer when, in June, journalists revealed that Fenech had in 2015 made a profit of €4.6 million through 17 Black, off the purchase of a Montenegro wind farm by Malta’s state energy company Enemalta. The deal saw Enemalta pay a Seychelles-registered company, Cifidex, €10.3 million for shares in the Mozura wind farm project in December 2015. Cifidex had purchased the shares for €2.9 million from the original concessionaires just two weeks earlier, using €3 million borrowed from 17 Black. The original funds and the profit were then returned to 17 Black.
At the same time as the deal was taking place, financial advisors for Schembri and then-energy minister Mizzi, who fronted the project, were trying to open bank accounts for the pair’s companies in Panama. The advisors listed 17 Black as a target client that would pay up to €2 million into the companies. Schembri said in court that his connection with 17 Black was a ‘draft business plan’ intended to be implemented only after his departure from politics. Mizzi denies any association. He was expelled from the Labour Party in the wake of the revelations, but remains an MP.
Cifidex is reportedly owned by Turab Musayev, an executive of SOCAR Trading, a subsidiary of the Azerbaijan state oil company SOCAR. Musayev and Fenech were, until the end of 2019, both directors in Malta’s main power station, which was supplied with gas by SOCAR.
The murder investigation has drawn in several other top figures in Malta’s institutions. The police commissioner at the time, Lawrence Cutajar, is under investigation over claims he tipped off the middleman Theuma on active investigations. A former deputy commissioner, married to a government minister, was alleged to have passed information to Fenech, with whom he had travelled overseas to watch football games at a time when the businessman was already considered a potential suspect in the murder.
Attorney General Peter Grech resigned after it emerged that he had advised the police, after the Panama Papers leak, that seizing evidence from Schembri and Mizzi’s financial advisors would be ‘drastic’ and potentially ‘counterproductive’. Caruana Galizia’s family have labelled this advice a ‘murder memo’ in that it prevented an investigation of her claims and left her isolated. The two officials were never questioned by police.
Opposition leader Adrian Delia faced moves within his party to remove him after leaked messages revealed he had maintained contact with Fenech even after his ownership of 17 Black was uncovered. An inquiry is underway into claims that Fenech offered Delia €50 000 to block the re-election of an outspoken MEP and that the party’s head of media had regularly visited Fenech at his home to receive monthly donations of €20 000. Both officials deny the claims.
In the face of such consistent shockwaves, the new prime minister, Robert Abela, has attempted to distance himself from the shadow cast by his predecessor’s handling of the case. Having, as an MP, accused Caruana Galizia’s sons of hindering the murder investigation, he has now disavowed those statements and ended the government’s practice of clearing a prominent protest memorial for the journalist in the capital, Valletta.
He has presented action taken against officials implicated by new revelations — in a political culture where resignations have not been the norm — as evidence of a commitment to good governance, and embarked on a series of constitutional reforms recommended by the Council of Europe’s Venice Commission, which had been stalled since 2018.
The Commission’s report into the rule of law in Malta had flagged up the prime minister’s worrying concentration of power and the inadequacy of other democratic institutions to serve as effective checks and balances. Abela’s proposed reforms include significantly reducing the prime minister’s powers of appointment, including in the judiciary and high-level commissions, and reinforcing the anti-corruption powers of bodies like the ombudsman and auditor general.
The prime minister has called the changes an ‘unprecedented first set of reforms to strengthen good governance’. The Venice Commission and campaigners in Malta say there is still a long way to go.
October 2022 update
In July 2021, the public inquiry on Caruana Galizia’s assassination found that the Maltese state should take responsibility for her murder, as the government had failed to recognize the risks to the journalist’s life and did not take reasonable steps to prevent her death. Three of the accused of conspiring to commit the murder have been convicted. On 14 October 2022, George Degiorgio and Alfred Degiorgio, two brothers who plead guilty for detonating the car bomb, were sentenced to 40-year prison terms. The two were alleged members of the same group as Vincent Muscat, who had previously been sentenced for implanting the bomb in Caruana Galizia’s car, and according to the prosecutor’s claim were hired by Fenech to commit the murder.
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