It's unclear who everyone was involved in the affair and how, but with several people caught lying or bending the truth, it increasingly looks like Dalli was trapped, and this could reach up to the President of the European Commission, José Manuel Barroso. It all sounds like a bad crime novel. I attempt a summary of Dalligate below the fold.

However, the tobacco company bribe case soon unravelled. First Dalli made a lot of noise contesting the circumstances of his dismissal and demanding that the evidence against him be made public. Then as the evidence was slowly revealed, it became clear that the key witness was a liar and herself a culprit, the rest proves nothing, and several rules were broken during the investigation. Finally, from leaks over the past week, it appears that a group of high-level bureaucrats who all knew about the investigation against Dalli agreed to change the draft of the revised Tobacco Directive – behind Dalli's back.

Last October, John Dalli was forced to resign as European Commissioner for Health and Consumer Policy, over a bribery allegation: the EU's anti-corruption unit OLAF concluded that he was involved in an offer to modify the Tobacco Directive for the benefit of a company. Dalli faced corruption allegations earlier as Malta's finance minister from the conservative Nationalist Party and as Commissioner he was responsible for new rules for the introduction of genetically modified crops, thus he wasn't beyond suspicion.

This summary is organised according to the chronological order of the events of the bribery attempt and Dalli's demise, rather than the chronological order of the leaks and revelations since Dalligate broke.



Act I: Meeting the lobbyist

The issue at hand is the EU ban on the sale of snus – a form of orally consumed tobacco (moist snuff) popular in Sweden – outside Sweden. The ban was instituted in the 1992 version of the Tobacco Directive, has been upheld in the current version (2001/37/EC), and was also to remain (see justification) in the next revision, which last year was in the drafting phase under Dalli's leadership.

The key person in the bribery affair (and the only one indicted in Malta thus far) is Dalli's close associate Silvio Zammit, a businessman and well-connected local politician from Dalli's Nationalist Party. Zammit's connection to the issue of snus was that he discovered a gap in the market and began importing snus for Swedes working in Malta.

On 6 January 2012, Zammit arranged a meeting between Dalli and young Maltese lawyer Gayle Kimberley, who was paid 5,000 by snus manufacturer Swedish Match for getting access to Dalli. (Kimberley knew his Swedish Match contact, lawyer Johan Gabrielsson, from a stint in the legal service for the European Council.) According to her own written account to her customers about the meeting, Kimberley laid out the case for lifting the EU's snus ban. While nothing further happened in this meeting, OLAF noted that Dalli violated the World Health Organization's (not the EC's) ethics code by not declaring his meeting with a tobacco lobbyist.

However, Dalli denied knowing that the "young Maltese lawyer" Zammit got him to meet was representing Swedish Match. Indeed at the time, Kimberley had a day job with Malta's Lotteries & Gambling Authority, and her link to Zammit was a fellow LGA employee with whom she had an extramarital affair and who knew Zammit from an earlier business venture. What's more, in her report to Swedish Match – which was attached to the OLAF report and was leaked last week – Kimberley actually wrote that she hasn't revealed her connection to the company.

For long the public version was that Kimberley met Dalli a second time on 10 February 2012, immediately before Zammit delivered the bribery offer in the same hotel room. Sounds like a smoking gun. However, in March this year, José Bové, MEP for France's EELV in the Greens-EFA faction, dropped the first bombshell. He interviewed Gabrielsson and another Swedish Match lawyer, who revealed that the meeting never took place, but was a lie Kimberley tried to impress her customers with. Gabrielsson said he actually learned this from OLAF on 19 September but claimed that both OLAF and Maltese police asked him to keep silent, so that the revelation won't disturb the latter's investigation. Maltese police issued a categorical denial. The OLAF report (leaked five weeks ago) confirmed that the meeting never took place, and OLAF relied on more circumstantial evidence.



Act II: Indecent proposals

It's pretty well established that Zammit offered in Dalli's name to remove the snus ban from the revised Tobacco Directive for an astronomical sum of 60 million. As indicated in the previous section, Zammit first delivered the offer to Swedish Match via Kimberley, who appears to have been more of an accomplice than an intermediary. On 13 February, Zammit also met Gabrielsson, in the company of Kimberley and her husband. Swedish Match and Gabrielsson claim that they immediately rejected the offer and Gabrielsson was ordered to cease contact with Zammit. Kimberley also claimed she ceased contact with Zammit, which OLAF disproved with telephone records of over a hundred calls, usually initiated by her. [UPDATE: in July 2013, an email was leaked to Malta Times showing that the Kimberleys also drafted an email offer Zammit sent in the second attempt to get the bribe, detailed below.]

Acknowledging that the 10 February Dalli–Kimberley meeting was a lie, what circumstantial evidence did OLAF use to evidence Dalli's knowledge of the indecent proposal? A meeting between Dalli and Zammit on the same day, Zammit's alleged notes on the meeting to Kimberley, and telephone calls between Dalli and Zammit both before and after the 6 January and 10 February meetings. However, as Malta Today points out, this is too weak of a hypothesis: it ignores that Zammit was a well-connected politician with other stuff to talk about and indeed the records show he made calls to other Nationalist Party leaders at the same time.

On 7 March 2012, Dalli met tobacco industry representatives (including Swedish Match's) for an official consultation on the directive. Meanwhile, if Swedish Match's claims of categorical refusal are true, Zammit was undaunted: he arranged another meeting started email and telephone communication with with Ingr Delfosse, the boss of the European Smokeless Tobacco Association (ESTOC), a lobbying organisation fronting for Swedish Match & co, and repeated his 60 million offer, which was rejected again. In a later OLAF interrogation, Kimberley admitted her lover husband's involvement in this second offer [UPDATE: as told in the update to the before-last paragraph, the email evidence which was also CCd to her has now been leaked], and claimed that it was based on a suggestion from Gabrielsson at the February meeting, which the latter denied.



Act III: Investigation

When Zammit made his second offer on 29 March 2012, Delfosse taped it in secret. Some time later, she handed the tapes to [ESTOC Chairman and Swedish Match Vice-president Patrik Hildingsson, who gave it to] Michel Petite, a French lawyer with Clifford Chance, a lobbying firm working for the tobacco industry. Before this job, Petite was none other than the Director-General of the Legal Service of the European Commission. Petite handed the tapes to Catherine Day, Secretary-General of the European Commission, although she is not allowed to meet businessmen. Then on 21 May 2012, Swedish Match officially reported the first bribery attempt. On 25 May, Day requested OLAF to start an investigation.

The OLAF investigation was seized by OLAF boss Giovanni Kessler himself. In the course of the investigation, he to interrogate Kimberley, he caught up with her on 15 June 2012 while she was having a long weekend on a business trip with her lover in Portugal, pretending to be a Spanish official interested in her gaming expertise. (They then lunched together the next day, but contradict each other on the details.) Kessler then went to Malta to get Zammit's and Dalli's telephone logs and to interrogate Zammit on 4 July 2012. On 16 July, Kessler asked Dalli himself about the alleged two meetings. On 17 July, Paola Testori Coggi, the Director General under Dalli, was also interviewed, where she claimed neither Dalli nor anyone else tried to water down the snus ban. Dalli himself wasn't interrogated, however.

In sum, the investigation was conducted with remarkable single-mindedness. Kessler broke several rules in the process, for example, he managed to interrogate Zammit (for which he had no authority in the bribery case) by first claiming that he wants to talk about the misappropiation of EU funds. Already in October, it was reported that the OLAF's own supervisory board saw problems and one member resigned over his own handling of the case. And a month ago, the summary of a report of the supervisory board was leaked, listing several instances of Kessler & co going beyond OLAF's mandate, violating people's rights and possibly breaking laws.

When Dalligate broke, the OLAF investigation was followed up by an investigation in Malta, which is still not closed. What's strange is that Zammit was the only one charged (for bribery, trading in influence and money laundering). Kimberley escaped indictment. Zammit's lawyers suggested her complicity in setting the level of the bribe, but she rejected the charge in cross-examination. For a time, there was talk of an EAW for Dalli while he was in Brussels launching his own lawsuit and being treated, but authorities didn't move a finger after he returned home.

In particular Kessler's investigation in Malta also throws up the question about the role of the Maltese government: Maltese authorities were cooperating, thus the government must have been in the know, why did they keep silent? Here the speculation is that a personal re-shuffle starting with the replacement of Dalli was politically advantageous for the prime minister before elections.



Act IV: Dalli out of the loop

Dalli maintains that he insisted on upholding the snus ban in the draft of the revision of the Tobacco Directive (which was then finalised in that form on 19 December 2012, after Dalligate broke). This was certainly his position in April 2012, but it proves little if the bribe wasn't paid.

However, there was actually a draft with the snus ban removed, but apparently without Dalli's knowledge. This was the final bombshell, dropped last week by website New Europe. The undisclosed draft was prepared on 7 September 2012 by Paola Testori Coggi (the Director General under Dalli), based on an agreement reached in a 4 September inter-services meeting she had with Catherine Day (the Secretary General directly under Commission President Barroso) and Luís Romero Requena (Petite's successor at the head of Legal Service) – all persons who knew about the investigation against Dalli. The emails weren't CCd to Dalli and didn't reference him. The new draft wasn't about the snus only: there were five other changes, all of them watering down the Tobacco Directive. I rather doubt that the top lawyer's inclusion in the 4 September meeting was warranted by any legal issues with the watered-down passages...

A few weeks later, this same Luís Romero Requena drafted a resignation letter prepared in advance for Dalli to sign.



Act V: Barrosogate

After receiving the finalised OLAF report, European Commission President José Manuel Barroso confronted Dalli and demanded that he resign with immediate effect. Dalli wasn't interrogated himself for the investigation, wasn't allowed to defend himself, had no 24 hours to consider, in fact he wasn't allowed to see the charges against him (and the OLAF report was kept from the public eye with various excuses subsequently).

Dalli was presented with the resignation letter by Romero Requena and Barroso's Head of Cabinet, who were also to serve as witnesses. Dalli however refused to play his part, and only resigned verbally. Then the Commission hurriedly issued a press release stating that Dalli resigned voluntarily. But Dalli again refused to play his part: he immediately denied the voluntary resignation and insisted that Barroso send him a written request for a written resignation for it to take effect. Barroso denied that the written version is necessary. Dalli has sued since.

All this was a rather unusual procedure.

Add to this that Barroso re-appointed Michel Petite, the man of revolving doors between the Commission's legal service and a tobacco lobbying firm, on – you won't guess it – his ethics committee advising on lobbying.