Malta Murder Investigation Closes In on ‘Mafia State’

By Andrew Higgins

Evidence is mounting that the bomb plot that killed the journalist Daphne Caruana Galizia reached deep into the government and business elite.

Protesters holding pictures of Daphne Caruana Galizia, the journalist murdered in 2017, outside the office of Prime Minister Joseph Muscat of Malta last month.
Protesters holding pictures of Daphne Caruana Galizia, the journalist murdered in 2017, outside the office of Prime Minister Joseph Muscat of Malta last month.Credit...Rene Rossignaud/Associated Press
Andrew Higgins

VALLETTA, Malta — Soon after a car bomb killed Malta’s best-known journalist, Daphne Caruana Galizia, two years ago, the prime minister’s chief of staff had a hot tip for reporters covering the murder: It was a mafia hit by an Italian fuel-smuggling racket.

More than two years later, Keith Schembri, the official who promoted that bogus story, is now himself under a cloud of suspicion in the murder plot, along with a multimillionaire businessman, Yorgen Fenech, 38, a close friend who was arrested at sea while trying to flee on his yacht.

Slowed down for months by phony leads and obstruction by the government, which tipped off suspects about imminent arrests, the investigation into Ms. Caruana Galizia’s murder suddenly picked up speed late last month after a self-confessed middleman in the murder plot, fearing for his life, started talking.

The inquiry is now closing in on what the murdered journalist’s family and many others see as the real culprit: not Italian Mafiosi but what many here call Malta’s own “mafia state.”

A mounting public uproar forced the resignation late last month of Mr. Schembri, just before he was taken in, briefly, for questioning by murder investigators. Two others ministers also stepped down. After days of protests in the capital, Valletta, the prime minister, Joseph Muscat, then announced that he was quitting, too, but would not leave office until January, a delay that triggered yet more protests.

A key witness in the case, Melvin Theuma, granted immunity in return for his testimony, said in a court appearance last week that Mr. Fenech, the businessman, had given him 150,000 euros, around $165,000, to hire the contract killers who carried out the murder. He also said that, just days after recruiting the three assassins, who were arrested in December 2017, he had been summoned to meet Mr. Schembri and given a no-show government job.

Testifying in court on Wednesday as a witness, Mr. Schembri denied initiating the meeting and said Mr. Theuma had been sent to him about a possible job. There was nothing suspicious in this, he added, since “there are many people like Melvin Theuma who came to me, five or six every day” in search of work. Insisting he had nothing to do with the murder plot, he also denied leaking information about the investigation to suspects.

The spectacle of a member state of the European Union veering so far from the rule of law — especially one whose prime minister, Mr. Muscat, was once seen as a possible candidate to take over the presidency of the bloc — has stirred dismay and outrage across Europe.

“I never knew growing up in a small village in Africa that I would ever see what I see here in a member of the European Union,” said Assita Kanko, an elected member of the European Parliament from Belgium who was raised in Burkina Faso and visited Malta recently as part of a delegation of alarmed European legislators.

Sophia in ’t Veld, the Dutch leader of the delegation, said calling Malta a “mafia state” was “going too far,” but added that she had “very grave concerns” about the erosion of the rule of law and the integrity of Malta’s institutions.

Mr. Muscat, under growing pressure to leave office immediately, told the visiting legislators that he felt “betrayed” by his former chief of staff, Mr. Schembri, whom he had for years defended against persistent corruption allegations.

He has rejected accusations that the rot extended throughout his government, telling the nation in a televised address that “our institutions are strong and they function.”

A former British colony tugged for centuries between cultural influences from Europe and North Africa, the Mediterranean island nation of Malta, which joined the European Union as its smallest member in 2004, is in some ways a victim of its own success.

Surging economic growth, particularly in recent years, when the economy grew by more than 6 percent a year, has been accompanied by a flood of foreign money into property, banking, gambling and other ventures, and also into the purchase of Maltese passports, which raised hundreds of millions of euros.

This all opened mouthwatering vistas for corrupt officials, unrestrained by rickety law enforcement and judicial systems that could not keep pace and are largely beholden to the prime minister, who controls all key appointments.

In Malta, said Simon Busuttil, a former opposition leader and friend of the dead journalist, “there has always been some corruption. But now it is from the top down.”

A deeply polarized political system has reinforced a sense of impunity at the top, with Mr. Muscat enjoying the support of a loyal Labour Party base that, fed fake social media reports about Ms. Caruana Galizia’s views — a favorite lie is that she wanted all their children to die of cancer — often believes that she was to blame for her own murder.

As evidence mounts of potential misdeeds by the prime minister’s staff, even some longtime Labour supporters are coming around to the view that corrupt ties between business and politics and the culture of impunity they engendered are what killed the journalist.

“They had this feeling of omnipotence, and thought they could get away with anything,” said Saviour Balzan, the owner and managing editor of Malta Today, and a recipient of Mr. Schembri’s bum tip about Italian fuel smugglers.

Just how high the murder plot might reach became clear late last month when Mr. Fenech, the business magnate who has known Mr. Schembri since childhood, was arraigned in court in Valletta and charged with complicity in murder and two other crimes relating to the murder. He pleaded not guilty.

The prime minister’s former chief of staff, Keith Schembri, who promoted what turned out to be a bogus story, is now himself under suspicion.Credit...Darrin Zammit Lupi/Reuters

After attending the arraignment and sitting just behind the man accused of paying for the murder of his mother, Matthew Caruana Galizia, the dead journalist’s oldest son, said he had “wanted to grab his head and bash it into the wooden bench.”

But, he added, more important now was to get charges brought against Mr. Schembri and others in the government who his family and others accuse of involvement in the murder, either in orchestrating it or covering it up. Mr. Fenech has himself testified in court that Mr. Schembri was involved in the cover-up.

Speaking briefly to The New York Times during a break in the court proceedings, Mr. Fenech said the prosecution case casting him as the sole mastermind of the murder plot “is all a cover-up.”

Standing impassively before the judge in a musty courtroom hung with a crucifix, Mr. Fenech wore a tailored business suit, gray tie and pressed white shirt. He looked every inch the successful businessman, which is what he was until early in the morning of Nov. 20, when the Maltese armed forces intercepted his yacht as he tried to escape after receiving a tip-off from Mr. Schembri.

He told a court on Thursday that Mr. Schembri had regularly passed on confidential information “in real time” from investigators, alerting him that he was a prime suspect, that his phone was being tapped and that the three suspected hit men were about to be arrested.

Mr. Schembri denied this in court on Wednesday. He acknowledged speaking with Mr. Fenech by phone the night before the businessman tried to escape by yacht but insisted that he had urged him not to leave and did not know that his friend was about to be arrested.

The yacht on which he tried to flee had sailed from Portomaso, a marina, casino and property development built by Mr. Fenech’s family conglomerate, Tumas Group, which holds the franchise to Malta’s Hilton Hotel and owns a string of other assets, including casinos and a stake in the country’s main electricity generator, Electrogas.

Unlike Mr. Fenech, whom Ms. Caruana Galizia wrote about just once, the electricity company featured regularly in her writings, particularly after it received a loan guarantee from the government of 360 million euros, about $400 million, soon after Mr. Muscat took office in 2012 and struck a curiously expensive gas supply deal with Azerbaijan, a part owner of the power plant. (Neither the Tumas Group nor Electrogas has been implicated in the murder.)

Writing in her hugely popular blog, Running Commentary, a mix of serious reporting and scabrous personal attacks, she reported in 2016 that Mr. Schembri and Konrad Mizzi, the energy minister at the time of the loan guarantee, secretly owned offshore companies.

These offshore companies, according to documents leaked as part of a vast trove of confidential material known as the Panama Papers, were set up to receive 2 million euros a year, or $2.25 million, from a mysterious firm called 17 Black, which turned out to be owned by Mr. Fenech.

As a pupil in the early 1990s at St. Edward’s College, then Malta’s most expensive private school, the young Mr. Fenech wrote an essay for the school magazine in which he said he would like to grow up to be like Silvio Berlusconi, the Italian tycoon who was then a rising star in the art of mixing business and politics.

How closely they had become entwined in Malta was evident from the court testimony of Mr. Theuma, Mr. Fenech’s former driver and self-confessed middleman in the murder plot. He told the court that the businessman first asked him to find contract killers in early 2017, but then ordered him to put the murder on hold until after a June general election.

After it became clear that Mr. Muscat’s party had won re-election, he said that Mr. Fenech told him: “Tell them to get on with it. I want Daphne dead.” Mr. Theuma said the businessman wanted the journalist killed to prevent her from publishing unspecified information about his uncle, Raymond Fenech, the chief executive of Tumas Group.

Asked at a public inquiry recently whether the murder of his wife was avoidable, her widower, Peter Caruana Galizia, said: “Yes. Without the corruption, she would still be alive.”