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Charges brought against ‘most powerful unelected official’ in Malta; powerful business people and politicians brought to court over laundering and corruption allegations

By Dan Byrne for AMLi

THE FORMER CHIEF OF STAFF to the Prime Minister of Malta has pleaded not guilty to a string of serious money laundering and corruption offences.

Keith Schembri and ten others appeared in a Maltese court Saturday for a marathon 14-hour questioning spree.

It was described by the national newspaper as “a watershed moment” in the country’s recent struggle to root out corruption at the highest levels of politics.  

Most were denied bail Saturday night because they were deemed untrustworthy and easily at risk of absconding due to their potential access to offshore assets, the Times of Malta reported Sunday.

Schembri himself had served as Chief of Staff to the Prime Minister from 2013 to until his resignation in 2019, when information connecting him to the murder of an investigative journalist began to surface.

He was described as “once the most powerful unelected official” in Malta, and his charges now come after an extensive investigation involving opposition politicians and the state prosecutor’s office.

The allegations against Schembri included suggestions that he had made payments to the former managing director of Allied Newspapers Limited – the company that owns the Times of Malta – and that he was connected to kickbacks originating from the sale of passports.

His financial advisors, Nexia BT, were thrown into national limelight in 2016 with the release of the Panama Papers and was alleged to have set up Schembri’s offshore companies.

Schembri was charged alongside his father Alfio and two business associates in one of several cases heard back-to-back Saturday.

In court, his legal defence team persisted with their arguments for bail to be granted, claiming that the prosecution was seeking a “Keith Schembri Justice” – a term understood in-country as suggesting he was the victim of a witch hunt.

State prosecutor Elaine Mercieca Rizzo dismissed these requests however, saying that vocal pleas did not take away from the seriousness of alleged offences.

The other cases heard Saturday involved similar allegations of money laundering, accountancy fraud, false testimony and falsifying documents.

One case revolved around another former managing director of Allied Newspaper Limited Vincent Buhagiar.

At 73 years of age, and due to have heart surgery in a matter of weeks, his defence team argued that he should not be considered a flight risk.  

Buhagiar was ultimately granted bail as a result, on condition that he sign the bail book daily and make a personal €40,000 guarantee.

For Schembri, this weekend’s charges are the latest a huge corruption probe that began to unravel following the murder of investigative journalist Daphne Caruana Galizia in 2017.

Galizia had done extensive digging into the affairs of several of Malta’s high-profile politicians before her death, and Schembri had been accused of being the mastermind behind it since.

He was arrested for questioning in the direct aftermath, but later released.  

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