Exclusive - In Malta, a private accountant’s government job sparks controversy

LONDON (Reuters) - A private accountant who set up offshore companies for two senior political figures in Malta was given a government consultancy in recent years worth nearly 60,000 euros (53,435.95 pounds) per year, documents obtained by Reuters show.

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Brian Tonna, who created companies in Panama for a Maltese government minister and the prime minister’s chief of staff, held the consultancy full-time from August 2014 to August 2016, and part-time from then until August 31, 2017, contracts obtained from a Freedom of Information request show. His pay - about 55,000 euros annually plus expenses - was almost as high as that of the prime minister.

Simon Busuttil, a former leader of the opposition Nationalist Party in Malta, told Reuters that Tonna’s work as a personal accountant for government figures and his government contracts created a conflict of interest. “The bar for ethical standards has now been lowered so far by this government, it has been crushed into the ground,” he said.

Tonna declined to comment. A spokesman for Joseph Muscat, Malta’s prime minister, said the prime minister was not involved in granting Tonna’s government contract.

Tonna was hired as an adviser to Owen Bonnici, minister for justice. The work was in addition to previously disclosed business contracts, worth more than 800,000 euros, awarded by other government ministries to NexiaBT, an accountancy firm that Tonna owns.

In a statement, a spokesman for Bonnici said that Tonna and NexiaBT “offered advice and technical guidance on purely financial matters relating to infrastructural projects in the field of culture.” Asked if Tonna’s employment involved any conflicts of interest and how this was managed, the spokesman did not respond.

Tonna set up companies in Panama that in 2015 he transferred to Keith Schembri, the prime minister’s chief of staff, and Konrad Mizzi, then energy minister and now tourism minister. Tonna has known Schembri as a personal friend and client for 20 years, according to a written declaration made by Tonna and seen by Reuters. Mizzi engaged NexiaBT as a personal accountant in 2015, according to his own statements. Schembri and Mizzi did not respond to questions about the contracts given to Tonna.

Tonna’s role in creating companies for Schembri and Mizzi was first disclosed by Daphne Caruana Galizia, a journalist who was murdered in October 2017. No evidence has emerged that connects her death to any of her journalism. Details of Tonna’s personal government consultancy contract emerged from Freedom of Information requests for details of any payments made to either Tonna or Nexia BT since the current administration took power in 2013. The requests were filed by the Times of Malta and the results shared with Reuters.

They showed that his full-time contract was worth 54,684 euros annually, plus 7,474 euros in allowances for his expenses, including for his car and mobile phone. The part-time contract was worth 38,241 euros plus 3,736 euros in expenses. The prime minister earns 55,978 euros plus 6,769 euros in allowances, his spokesman told Reuters.

In May 2017, Maltese authorities launched a judicial investigation into payments totalling 100,000 euros made by Tonna to Schembri at a private bank. As Reuters reported in April here, the probe was launched after Malta's anti-money laundering watchdog, the Financial Intelligence and Analysis Unit (FIAU), said in a report that the payments gave rise to "reasonable suspicion of money laundering." Both men have denied any wrongdoing and said the 100,000 euros were repayment of a personal loan. The FIAU declined to comment on the investigation, which continues.

In November, Prime Minister Muscat came under political pressure from opposition lawmakers to sack or suspend Mizzi and Schembri after Reuters reported new details here about 17 Black, an obscure company based in Dubai. That company, according to an email from NexiaBT, planned to pay up to 2 million euros to Panama companies owned by Mizzi and Schembri.

According to government statements following the Reuters report, 17 Black's activities are now the subject of both a criminal probe by police and a judicial investigation. Muscat told reporters here in Malta that if he were implicated in any wrongdoing by the probes, he would resign.

Tonna said he was “fully committed to cooperating with the authorities.”

Reporting by Stephen Grey; editing by Richard Woods and Janet McBride