Following Malta’s grey listing by the FATF, Opposition leader Bernard Grech urged the government to join the PN in setting up a “national task force” to coordinate work to limit the damage caused by the grey listing decision and eventually undo the damage.
I must admit that, were I in the shoes of Prime Minister Abela, I would have been tempted to accept Grech’s offer because I truly believe that Grech can make a valid contribution towards resolving some of the issues leading to the grey listing, chief among them the under-declaration of tax dues.
When Grech submitted his nomination for the PN leadership, it was revealed that he had been in default with the Tax Department for 12 years, between 2005 and 2016, having failed to submit adequate tax returns and under-declaring his income by €43K. The audit by the Tax Compliance Unit uncovered signs of “undeclared income” and “unexplained bank deposits”. Grech’s failure to operate a separate bank account for his clients’ funds, instead depositing these funds in his own account, made it difficult for the department to identify with precision the amounts generated from his professional activity as a lawyer, especially as he did not keep adequate records.
In 2018, the tax authorities agreed on an €81K settlement with the future PN and opposition leader for unpaid taxes.
A few days prior to assuming the PN leadership, Grech settled a €30K income tax bill and €17K VAT dues. People with unsettled VAT dues have been imprisoned.
It does not appear that it crossed the mind of any tax official to investigate how a lawyer earning €6k annually from his profession would be able to settle €47K in one go.
Elements within the PN, foremost among them Karol Aquilina, have repeated ‘ad nauseam’ that the due diligence carried out by the Individual Investment Programme is ‘fake’. What is undoubtedly fake is the due diligence carried out on candidates vying for PN leadership. Grech’s predecessor Adrian Delia also miserably failed the test.
According to Daphne Caruana Galizia, Delia concealed ownership of a Jersey bank account. He was, indeed, outed in the ICIJ Offshore Leaks Database as Judicial Representative and shareholder of several companies holding offshore bank accounts.
In March 2018, the FIAU had handed the police a 30-page report recommending an investigation into potential financial crimes involving the then Opposition leader, after it concluded that sufficient information was available to conclude that Delia and his bank account in Jersey “may have been used for money laundering”. Three years later, we are none the wiser.
Let us not forget that Delia also had serious tax issue, including failure to submit returns in time, dues of €280K and failing to abide by agreed repayment arrangements.
Grech might also clarify how Jason Azzopardi, who has built a political profile around issues of good governance and the fight against corruption, only submitted his completed tax returns for the years 2017 – 2019 in March 2021, after facing harsh criticism for failing to do so earlier. Azzopardi explained his failure to disclose his professional income by pointing to the fact that he is currently undergoing separation proceedings from his estranged wife. The Inland Revenue Department made it clear that this was not grounds for non-submission of tax return. Incidentally, Azzopardi’s earnings from his profession amounted to €19k in 2017, €29k in 2018 and €23k in 2019. No eyebrows were raised at the Inland Revenue.
It has since emerged that Azzopardi acts as the local lawyer of a prominent car manufacturer but, apparently, no income has been declared from this source.
Perhaps Grech might also be able to shed some light on the accusations faced by Azzopardi about the Fekruna and Löwenbräu cases.
The government’s Internal Audit Investigations Department found that land expropriated at Fekruna was overvalued by €1M when Azzopardi was Parliamentary Secretary responsible for Lands. The deal also breached the rule which sets out that the value of the public land given in exchange for privately-owned land which is being expropriated cannot exceed 30% of the value of that expropriated land.
Judge Anthony Ellul ruled that Azzopardi must shoulder political responsibility for the way the former Löwenbräu brewery in Qormi changed hands back when Azzopardi was parliamentary secretary responsible for government lands. Azzopardi had allegedly used his influence to ensure the land was sold to businessman Zaren Vassallo for €706K, despite the National Audit Office having valued the land at €8M.
Bernard Grech’s contribution on the national task force might be valuable indeed, unless he too believes that the above cases are nothing more than ‘dnubiet ta’ l-abbatini’.