Earlier today, we witnessed the first hearing in the 17 Black case.
A quick refresher for our readers: in 2018, we learned that 17 Black, a Dubai-based offshore company that was later renamed to Wings Developments Ltd, was owned by Electrogas shareholder Yorgen Fenech.
Electrogas is the consortium that was awarded a massive power station contract, the cornerstone of the Labour Party’s 2013 electoral pledge to reduce electricity tariffs.
17 Black was just one of several offshore companies linked with the power station deal.
Daphne Caruana Galizia was the first to expose this network of companies which were extraneous to the Electrogas consortium itself, all of which would later turn out to be linked to key players involved in making the deal happen.
The crux of the matter lies in the fact that 17 Black was set up with the intent of disbursing payments to other companies which, on paper, were not directly linked with the consortium. Two of those companies were Hearnville Inc and Tillgate Inc.
We eventually found out that the latter two were ultimately owned by disgraced former chief of staff to the prime minister Keith Schembri and disgraced former energy minister Konrad Mizzi, respectively.
Fast forward to today.
This morning, a total of seven individuals and eight companies were charged in court following the conclusion of a magisterial inquiry.
That inquiry, which was originally initiated following a successful request for investigation by former opposition leader Simon Busuttil, concluded that these individuals were to be charged with money laundering, corruption of public officials, trading in influence, and criminal association.
Besides Fenech himself – who was recently granted bail ahead of a criminal trial in which he stands accused of masterminding Daphne Caruana Galizia’s murder – several familiar faces stand among the accused, including Schembri and Mizzi. Mizzi is additionally being accused of committing perjury.
The other co-accused are Brian Tonna and Karl Cini – formerly of Nexia BT fame.
Nexia BT was a corporate services provider that served as an essential node in the complex network surrounding the Electrogas deal.
Paul Apap Bologna (another shareholder involved in the Electrogas consortium) and Mario Pullicino, the agent who brokered the deal for the floating LNG offshore storage unit moored in Delimara, are also among the accused.
All of them pleaded not guilty.
As for the companies in question, all of them were linked directly with the individuals listed above. Pullicino is linked with OEGB Ltd and EN3 Ltd. Tonna and Cini are both linked with Nexia BT and BTI International.
Wings Developments Ltd (the rebranded version of 17 Black) and Wings Investments Ltd (a separate company) were linked to Fenech via investigative reports which were published on the subject. So was New Energy Supply Ltd.
Nonetheless, Fenech declined to assume responsibility for the companies in question, ostensibly on the basis that the companies no longer exist as registered entities.
Using the same logic, Apap Bologna declined to assume responsibility for Kittiwake Ltd, a company which was also linked with him in the past.
So, now that we’ve covered the basics, what other key aspects emerged from today’s hearing?
Freezing orders up to €18 million, no recusal
Since the charges against the accused include money laundering, the prosecution tabled a request for freezing orders to be issued following a lengthy testimony by police inspector Brian Paul Camilleri.
Though it is usually difficult to pinpoint where and how proceeds of crime are derived from such a complex money laundering case, the prosecution was able to testify at length about its findings.
It was also able to quantify the exact amounts to be frozen following a cumulative analysis of all the transactions which were traced within the network of companies under examination.
A freezing order amounting to €18 million was imposed on Yorgen Fenech. Konrad Mizzi, Keith Schembri, Karl Cini, and Brian Tonna also face a freezing order of €12 million. Paul Apap Bologna’s freezing order amounted to €390,000, while Mario Pullicino’s amounted to around €200,000.
The companies which stand accused also had freezing orders imposed on them – €12.4 million for Wings Developments (17 Black), €5 million for Wings Investments, and €670,000 for New Energy Supply Ltd.
The court, presided by magistrate Rachel Montebello, accepted the freezing orders issued by the prosecution in their entirety.
Montebello also threw out a separate request by the defence for her recusal. The defence requested her recusal due to the fact that she is also presiding over the case involving disgraced former police inspector Ray Aquilina, who is being separately accused of corruption at the hands of Yorgen Fenech.
The extensive level of detail compiled by the inquiry, prosecution
For the purpose of keeping this explainer piece as brief as possible, we will not go into all the detail that inspector Camilleri went into when testifying for over an hour today.
The executive summary version of his testimony is that the inspector was able to explicitly refer to several unexplained or dubiously framed transactions which occurred between the companies standing among the accused.
Some of the transactions which were scrutinised by the inquiry also involved other companies which do not stand among the accused in this case.
“All of these companies are connected through transactions which tie them together,” the inspector explained, further pointing out that the relationships between the accused were clearly more than just strictly business.
In fact, the inspector noted that communication between Schembri, Mizzi, and Fenech in particular occurred on a weekly basis at the very least.
By way of example, 17 Black’s creditors were all companies which were somehow linked to the deal, furthering suspicion that it was solely set up for the purpose of serving as a node on a network meant to facilitate illegal payments to politicians who were responsible for pushing through the Electrogas deal.
Furthermore, Cini and Tonna served as key facilitators for setting up these companies, including Hearnville and Tillgate. The similarities between the two – same incorporation date, same corporate service provider, same bank etc… – further convinced investigators that they were set up in tandem for the purpose of laundering money.
The inspector also specifically referred to investigative news reports and the National Audit Office’s extensive reporting on the Electrogas deal as “intelligence” which helped inform the police force’s investigations.
Parallels between the defence’s strategy in the hospitals concession case, 17 Black case
Any readers following today’s proceedings via live blog would be forgiven for thinking they were reading the wrong transcript whenever they heard the defence complaining about how court experts were appointed.
Those who followed last year’s coverage of the hospitals concession case know that a key line of attack from the accused stems from the way court experts were appointed to assist with the inquiry and claims that they were not qualified and fit to serve in the inquiry.
It is pertinent to remember that Konrad Mizzi, Keith Schembri, Brian Tonna, and Karl Cini all stand among the accused in the hospitals concession case. Most of the defence team on the 17 Black case overlaps with the defence team in the hospitals concession case.
Given that the 17 Black inquiry seems to have relied on the same experts – including the now-liquidated Harbinson Forensics and court expert Miroslava Milenovic – the same claims are being made in this context.
In fact, the prosecution was effectively forced to ask magistrate Rachel Montebello to confirm the admissibility of the experts’ input following claims of a lack of reliability by the defence.
The magistrate confirmed the experts’ input, arguing that it cannot be contested so early on in the proceedings.
All in all, this case promises to be yet another long, arduous maze filled with potential pitfalls for the prosecution.
The next hearing was set for 19 February at 10am.