“Ronnie Demajo came to our house at least three times while I was there and gave Alfred Lm50,000 cash each time” – former companion of Central Bank Governor-designate

Published: June 17, 2016 at 10:14am

Anna Zelbst, the former companion of Central Bank Governor-designate Alfred Mifsud, has decided to speak publicly after Mifsud sued me for libel last Tuesday and told the press that reports on this website, that he had taken cash bribes from a supplier to Mid Med Bank when he was that bank’s chairman in 1996 to 1998, “come from sources that are untrustworthy and motivated by revenge and hate from a failed personal relationship, after refusing unreasonable demands for financial settlement”.

Mrs Zelbst had confirmed to me even before the reports were written that, should Mifsud sue for libel, she would voluntarily come forward as a witness and testify to everything she had said under oath in court.

“But now I think I should remove all last shreds of doubt that the story is true by speaking publicly and on the record,” Mrs Zelbst said last night.

“When Alfred was chairman of Mid Med Bank in 1997 and 1998, Ronnie Demajo came to our house in Balzan at least three times, and each time he brought with him Lm50,000 in cash. I was there, of course, because it was my home. The cash deliveries were made to our house because they couldn’t be made to the office or anywhere else, and I suppose Ronnie came personally because he couldn’t risk involving anyone else. The fact that I saw just three of these deliveries does not mean that there weren’t any others. I wasn’t at home all the time,” Mrs Zelbst said.

“When Alfred was removed from his position as bank chairman in 1998, I know – because he used to complain about it – that Ronnie Demajo still owed him Lm70,000 but never paid it because now Alfred was no longer at Mid Med. That had really upset him.”

Lm50,000 are equivalent to €116,500; Lm70,000 are equivalent to €163,100. Mifsud was asked to resign by Fenech Adami’s incoming government after the surprise general election in late 1998.

I asked Mrs Zelbst how she knew the exact amount of cash in each delivery.

“After Ronnie left, Alfred would go into his study and count the cash. Then he would give me Lm10,000 of it and tell me to deposit it in my account at the Bank of Valletta the following morning, and immediately write him a cheque for the full Lm10,000 so he could transfer it to his own account and it would look like money coming from me. I very much regret doing it, but at the time I just obeyed him. It was only much later that I understood the implications of allowing him to use my bank account that way.” Lm10,000 is equivalent to €23,300.

I then asked Mrs Zelbst if she knew why Ronnie Demajo had been going to their home and handing over such large amounts of cash to her companion. Had Mifsud himself ever given her the reason or mentioned anything? “No, but I know that at the time the bank was buying a computer system from Ronnie’s company, because Alfred had mentioned it, so I put two and two together.”

Mrs Zelbst had no idea what computer system this was, or any further information on the 1997 deal, so I spoke to former senior officials of Mid Med Bank, which is how I acquired the rest of the information to put what Mrs Zelbst had told me into context.

When he was appointed chairman of Mid Med Bank by incoming Labour Prime Minister Alfred Sant in late 1996 (Mifsud had been chairman of the Labour Party’s television and radio stations), Alfred Mifsud immediately set in train the process to change the bank’s software system from the Bankmaster that had been installed a relatively short while before.

Bank officials noticed at the outset that he was pushing for a system by a marginal US supplier called Eastpoint, which then had experience only in software for American local banks which didn’t have foreign exchange requirements. Eastpoint’s Malta intermediary, through its partnership with IBM, was the M. Demajo Group.

In 1999, the government sold Mid Med Bank to HSBC, which – I am informed by former senior officials of the bank – was forced to scrap the Eastpoint system because it was unworkable and causing problems. Eastpoint then entered into litigation with HSBC Holdings/Mid Med Bank. The legal papers linked here give a comprehensive background to the project, including timeframes.

Mrs Zelbst also said that despite Alfred Mifsud’s claims to the contrary, the only reason tobacco giant Philip Morris International paid him €2,750 a month for 18 months, when John Dalli was European Commissioner for Health, was to gain access to Dalli.

“It was Philip Morris International which approached Alfred. All I know is that Alfred’s brief was to talk to Dalli about Philip Morris’s issues. The subject was something to do with cigarette filters. When Dalli had to leave his European Commissioner post, Philip Morris stopped paying Alfred. He was really angry about it. Alfred accepted a lot of hospitality from Philip Morris, including travel to watch football matches in a special box as guests of the company. I went with him to one of those games.”

“Now Alfred says that I am untrustworthy and is trying to discredit me,” Mrs Zelbst said. “But in 2003 he asked me to hold his 65% shareholding in Crystal Finance in my name. He stood for election with the Labour Party that year and was convinced that he would be elected and immediately made Finance Minister, and so he would have to distance himself from Crystal Finance. But he wasn’t elected. It is he who is untrustworthy. Somebody who does these things, and then lies about it too, should not be made governor of a central bank.”

“That is when I decided to speak to the press. Alfred told me that if I spoke to the press he would ruin me and leave me with nothing to live on. I am 62 and gave up my career because he constantly told me that only bad mothers work. I have no money of my own and no income, no rights because even though we were together for 24 years and have two children, we were never married. Now he is threatening to starve me into submission and blackmail me into not speaking about this. But I am not scared of him. I told him, ‘You have always underestimated me. Now do your worst.'”

Alfred Mifsud, who will become governor of the Central Bank of Malta on 1 July.

Alfred Mifsud, who will become governor of the Central Bank of Malta on 1 July.