The Labour government is currently going through an internal debate on what to do vis-à-vis its former party treasurer and electoral candidate, accountant extraordinaire Joe Sammut.

Mr Sammut has been running a full-service Maltese visa and residency permit operation, predominantly for Libyan clients, by registering companies and securing Maltese residency permits against a hefty €7,500 fee per person.

Details emerged in The Malta Independent last week following reports that Mr Sammut was being held for questioning by the police over the registration of some 850 such companies in the past months, resulting in a turnover of just under €6.4 million.

In the meantime, police sources have confirmed with this newspaper that officers on Friday paid a visit to Valletta’s Evans Building, where residency permits are issued and related files are kept, where they removed a number of files on Libyan and Philippine nationals and brought more people in for questioning.

This newspaper last week revealed that it was the Malta Financial Services Authority that had drawn the attention of the relevant authorities to the matter of companies being registered under false pretences. The MFSA was following its strict financial due diligence process which, until now, has proven to be foolproof when evaluating new companies.

But should the police arraign Mr Sammut, as is expected, the Labour government would find itself in a fix, since all the details pertaining to how Joe Sammut managed to open at least 850 BOV accounts for his Libyan clients, by-passing the bank’s due-diligence process, will end up in open court.

The bank, represented by its Chairman John Cassar White, will have to testify under oath and explain how these dubious companies and/or individuals managed to get through the financial scrutiny usually employed by BOV. It will also have to declare what type of political influence, if any, was exerted by Mr Sammut on BOV to be able to open such accounts which the MFSA found to be irregular - to the point of it being compelled to alert the authorities, including the police.

 

Anġlu Farrugia tried to clean up the PL in 2003

While the government will be facing an embarrassing situation should details of how Joe Sammut got BOV to open 850 accounts to his Libyan clients and proceeded to secure them Maltese residence permits, the Labour Party itself could also be in for a drubbing.

Back in 2003, former Deputy Leader Anġlu Farrugia reportedly tried to clean up the PL from such individuals who traded in influence with shady characters. He had suggested the creation of a judicial authority with ‘super’ powers to investigate and prosecute suspected individuals responsible for the misuse of public funds since Malta became a Republic in 1974.

The motion he presented also proposed that the period for which a crime can be time-barred is increased to 30 years. Farrugia’s proposal was unanimously approved by the MLP Naxxar local club general conference, only to be turned down by the national Labour executive council.

Contacted by the newsroom to comment on whether his 2003 motion would have prevented certain individuals from abusing their position of trust within the Labour government, Mr Farrugia, today the Speaker of the House of Representatives, said that he is no longer part of the Labour Party and that he will not be drawn to comment on such matters.

However, on corruption and abuse of power, he said that this is something he has been battling all his life and is currently making good use of the links established with GRECO, the group of states against corruption within the Council of Europe, to investigate matters of such concern. 

 

Joe Sammut handled Gaddafi’s finances

Once Mr Sammut is taken to court, he will have to explain how his clients were given a red carpet and fast-track treatment throughout the whole residency permit process. Mr Sammut, who is a former Labour Party candidate and party treasurer, has a rather chequered past due to his allegedly close ties with the Gaddafi family.

Mr Sammut was held by the police for questioning last week over his registration of multiple companies on behalf of Libyan nationals, in a purported scam for Libyans to gain Maltese residency permits, which foreign nationals are granted when investing at least €100,000 in a new company. However, no such sums are ‘invested’ in the new companies being set up by Mr Sammut’s offices. This should have been enough proof for BOV to raise the alarm and withhold such accounts, something which didn’t happen.

Joe Sammut’s business relationship with top Libyan businessmen and the Gaddafi family is not new to BOV.  Legal filings show that the dictator’s son had as much as €55 million dollars in his BOV account, often racking up €100,000 on his BOV Visa Platinum card in a matter of weeks.

When contacted a few weeks ago, BOV Chief Executive Charles Borg told the newspaper that neither the bank nor its executives are being investigated for any wrongdoing in accepting Mr Gaddafi’s business.

The Wall Street Journal says that Mr Gaddafi started opening BOV accounts in 2002, under the guise of Malta-incorporated companies that he controlled. The accounts’ assets swelled from €700 to at least €60 million in early 2011, just before the Libyan revolution. Joe Sammut opened a number of shell companies on Gaddafi’s behalf. Court transcripts of the testimony given by Mr Sammut show that he did not flag the large money transfers in and out of the BOV accounts in question as being suspicious.

 

BOV Chairman and CEO refuse interviews

In light of such events and other stories already revealed by this newsroom regarding alleged political influence at BOV, we asked for an interview with Chairman John Cassar White, which was politely turned down. 

A second tentative was made by this newsroom to interview BOV’s CEO Charles Borg but even that was refused in a very polite reply to our emails. Should Joe Sammut be taken to court, BOV’s top brass cannot refuse to answer questions such as; how were 850 bank accounts opened by Mr Sammut in a speedy manner with limited, if any, questions asked?