New Zealand: Konrad Mizzi has lied to parliament, to the press and to his party
Cabinet Minister Konrad Mizzi, who will be elected tomorrow as deputy leader of the Labour Party, has sought to preempt damage of potential New Zealand revelations and to reassure the delegates who will elect him, and members of the party hierarchy, by speaking lies and half-truths to Malta Today.
Bear in mind that I know they are lies and half-truths because I am in possession of the facts. I cannot, however, reveal those facts in their entirety because I am under obligation to my sources. You will understand that this is extremely frustrating because I have to stand by and watch him be elected as the Labour Party’s deputy leader by delegates who trust him and who believe him, and I can do little or nothing to stop it even though I have done my best by suggesting, as well as I could in the circumstances, that there are serious reasons why they shouldn’t touch him with the proverbial barge-pole.
Below I will tell you what I may, and with luck the delegates and those members of the Labour Party hierarchy who are not Joseph Muscat will read it and begin asking questions. I hope other people in the media will ask questions too. They have to, because this is really important.
1. Konrad Mizzi told Malta Today that the trust was set up last year. This is correct.
2. He said that the beneficiaries of the trust are he, his wife and their children. This is not true. The ultimate beneficiaries are his wife and children alone. He is not a beneficiary. Roughly around the time the trust was set up in his wife’s name alone (+ the children), the government, working through parliament, removed the long-standing obligation of cabinet ministers to declare their wife’s assets to the House – an obligation that existed even where the spouses have separate estates. This means that Konrad Mizzi would have been under no technical obligation to declare the trust to parliament, but now feels he has to do so to limit the damage – which is one of the reasons why he is saying he is a beneficiary when he is not.
3. He said that the trust was set up to manage the family’s assets. He then contradicted himself by saying that it holds no assets. People do not set up trusts on the off-chance that at some point in the future they might have assets that need managing, and more so, assets large enough to be held by something like a trust, which is there only for holdings of extraordinary size and not a few hundred thousand euros here and there.
4. If the assets are not yet in the trust, where are they? In his declarations to parliament, he has not declared any assets of the nature that justify a trust – so much so that his bank deposits were exactly equal to his bank loans.
5. If he still plans to make these assets, and has set up the trust in anticipation of making them, then how does he plan to do this? He is a cabinet minister on a cabinet minister’s salary. His wife is a Malta government employee on a state salary.
6. Konrad Mizzi told the newspaper that the trust (which “doesn’t have any assets”) holds “a shell company”. He did not tell the newspaper in which jurisdiction the company – which is NOT a shell company – was incorporated. He left people with the assumption that the company held by the trust is incorporated in New Zealand, like the trust. It isn’t. It is incorporated in the shady jurisdiction of Panama.
7. Mizzi did not say when the company was incorporated, and who owns it, or that the ownership of the company is different to the ownership of the trust, which means that the trust was set up to effectively transfer ultimate ownership of the assets held by the company to the beneficiaries of the trust: his wife and children. Why was the trust set up to transfer ownership of his assets to his wife and children early last year?
8. The fact that his wife or ex wife is a beneficiary of the New Zealand trust, along with her children, means that she has known about the company incorporated in Panama, and any assets it may hold, all along. Right there, you have the source of her leverage on the government of Malta so as to obtain what she wants under her contract while not being accountable to anyone and not doing any visible work. She had the means of blackmail through revelation – but let’s not call it blackmail. Let’s call it leverage.
9. “Due to the ongoing work pressures and long hours I do not have time to manage my financial affairs effectively,” Konrad Mizzi told Malta Today. What financial affairs? He’s in his 30s and for the last three years he has been on a government minister’s salary as his only declared source of income.
10. “This will protect our assets and will ensure we realise a fair rate of return. Our assets will be managed by a professional set-up and trustees,” he said of the reason for setting up the trust. He then immediately said that it holds no assets. “This may be used in the future to hold my existing property and possibly investments,” he said. What property and investments? The assets he has declared to parliament – a small flat in an insignificant part of London and a small flat in Sliema – do not require a trust to hold them, still less a trust set up on the other side of the world.
11. Mizzi is a government minister in Malta, a stable and trusted financial jurisdiction which markets itself internationally for its financial services. Yet he chose to set up his trust in New Zealand, in another hemisphere. “The trust is regulated and registered in New Zealand, a stable parliamentary democracy that is one of the world’s most well-governed nations, having ranked in the top tier of indexes on the strength of its democratic institutions, government transparency and lack of corruption,” he said. If we take him at his word, then what he is saying here is that the financial regime in New Zealand is better than the one in the country which he governs. But of course, that is not the reason Sai Mizzi Liang set up her trust in New Zealand.
12. The arrangements for both the trust and the company were made by Brian Tonna of Nexia BT, who is extremely close to Joseph Muscat and who is a regular at the Auberge de Castille, to the point where some say he even has, unofficially, a desk there. Though he is bound by law not to reveal details about his clients, knowledge about a key cabinet minister’s (and now also Labour Party deputy leader’s) fishy financial arrangements will give him, like it has given Mrs Konrad Mizzi, massive leverage over the prime minister, the Health&Energy Minister, and the government. You need to look at whatever financial advantage Nexia BT might be getting in return.
13. No accountant or financial consultant would ever advise a client to incorporate a company in Panama and then, after that, a trust to hold it in New Zealand, if there are no extraordinarily significant assets to hold, and beyond that, assets which the client wishes to conceal from the authorities back home. Konrad Mizzi is in government now but he is not going to be in government forever. That is why he needs to use a company incorporated in Panama, rather than one incorporated in Malta, in another EU jurisdiction, or anywhere else which is obliged to exchange information with the authorities in Malta.
14. I can’t see Brian Tonna of Nexia BT telling Konrad Mizzi, “Hey, why don’t you incorporate a company in Panama and then a trust in New Zealand to hold the company, just in case you ever have any massive assets you want to put in it in future – for example, if you and your wife get a salary increase from the government of Malta?”
15. Trusts cannot exist without holding assets – more to the point, without holding very significant assets. There can be no such thing as a “shell trust” holding a “shell company”. Malta is packed to the gills with lawyers, accountants and financial advisers who know this. Konrad Mizzi must be desperate to have launched a lie like that into an island community which largely sells financial services for a living, and where there are hundreds of professionals who know exactly how these things work.
15. While Konrad Mizzi was doing all this, he was yelling ‘Shame on you’ at the former finance minister and hyping up a scandal about a faux ‘arlogg tal-lira’ worth 400 euros. Words now fail me.