While Caruana Galizia's family slept, just before 2am on October 16, 2017, the killers placed a bomb under the driver's seat of her rented Peugeot 108, with a prepaid "burner" mobile phone SIM as the trigger device.

Prosecutors say that later that day Alfred Degiorgio, acting as the spotter on a hill overlooking the Caruana Galizia home, called to tell his brother, George Degiorgio, when Caruana Galizia left the house.

George Degiorgio was on his boat offshore. He had another untraceable burner phone that he would use to trigger the bomb, prosecutors have told Malta's magistrates court.

There would be no connection to the killing … except that once offshore, the assassin realised his burner phone couldn't trigger the bomb.

Six months ago, Maltese journalist Daphne Caruana Galizia was killed by a car bomb. Three men have been charged with her murder but it’s not known who ordered the killing. A European Parliament committee examining her murder has described a “culture of impunity” which followed Panama Papers revelations by Caruana Galizia and The Australian Financial Review. Caruana Galizia’s stories tracked the dark lines of power and money in a global web of influence. These are the Malta Files.... Australian Financial Review Interactive infographic Interactive infographic by Les Hewitt and Neil Chenoweth

It had run out of credit.

Genius George

Caruana Galizia had no time for stupid enemies. "Don't ever get lost in the jungle with these folks, because you might have to eat them to stay alive," she wrote on her website, Running Commentary, six weeks before, of someone else who exasperated her.


Genius George, trapped on a boat and short of time, was a killer who couldn't think straight. His solution was to pull out his regular mobile phone to ask a friend to put €5 ($8) on the burner's account.

His regular number was being tapped by Maltese security services because of George's other suspected criminal activities, so his call linked him directly to the assassination.

The three men have pleaded not guilty to the murder and refuse to speak to police.

No one is suggesting the three men charged with Caruana Galizia's murder were the brains of the operation. Nationalist Party MP Jason Azzopardi told Malta's parliament this week that a police sergeant tipped off the three killers before they were arrested six weeks after the murder – a claim the police commissioner has vehemently denied.

Azzopardi said the tip-off was the reason the three men threw their mobile phones in the sea and carried no keys when they were arrested. George had written his girlfriend's phone number on his hand; if you only get one phone call when you're arrested, numbers can be hard to remember.

Azzopardi said police asked the three men, "How did you know we were coming? Did you smell us coming?"

Malta's rumour mill suggests the contract on Caruana Galizia was worth €200,000. But there is no evidence who ordered the killing. Paul Mendoza / Alamy Stock Photo


Malta's rumour mill suggests the contract on Caruana Galizia was worth €200,000. But there is no evidence who ordered the killing.

In April 18 media groups, including The New York Times, Süddeutsche Zeitung, the Guardian, La Repubblica, Reuters and Le Monde, co-ordinated by Paris-based Forbidden Stories, published the Daphne Project,a joint investigation into her murder and the stories she had been pursuing.

But the new findings are shrugged off in the bitter partisan politics of this historic Mediterranean island, with a population just less than Tasmania's living in the space of a postage stamp.

Caruana Galizia's murder was actually a plot to destabilise the Labour government, Labour supporters claim in closed Facebook groups. Maltese activists have received death threats.

Ali Sadr Hashemi Nejad, founder of Pilatus Bank and son of one of Iran's richest men. Supplied

Prime Minister Joseph Muscat turned the annual May Day celebrations into a protest against Project Daphne and warned of "repercussions for people who have been caught lying to smear Malta's name".

It was a very different side to the genial face Muscat put on in Australia last month, where he attended the Commonwealth Games as the Commonwealth's chair-in-office, met Malcolm Turnbull, and pressed the flesh among the Maltese community – the largest in the world outside Malta. He told SBS Radio that Caruana Galizia's killers had been found. End of story.

Panama Papers hit hard


In January, the European Parliament's ad hoc Rule of Law committee in a scathing report cited a deepening "perception of impunity for criminals" in Malta in the aftermath of the Panama Papers revelations two years ago, and a culture of fear after Caruana Galizia's death.

The ugly calculus goes like this: Caruana Galizia's killers must have thought no one would call them to account, because no one else had been.

This makes it a personal story, because I worked with Caruana Galizia on the Panama Papers, the release of files of Panama law firm Mossack Fonseca.

If the Rule of Law committee's description is correct, then The Australian Financial Review's stories had some part in setting off the avalanche of scandals and calamity that has engulfed Malta and which may have led to her death. It's not a happy realisation.

To call Caruana Galizia my friend is presumption on my part. I collaborated with her over several weeks in 2016.

Two years later I can tell some of the backstory behind that collaboration.

Alexander Nix, chief executive of Cambridge Analytica, had a relationship with the Swiss firm running the St Kitts citizenship-by-investment scheme. Dominic Lipinski

What is now clear is that, unlike anywhere else in the world, Malta's anti-money-laundering investigators were across all of the Panama Papers revelations within days of the worldwide release in April 2016.


By the end of April, all of the pieces were there, ready to put in place. But the government investigators' findings went nowhere. They were betrayed by the system.

The reasons the Panama Papers had such impact in Malta lie in events days before the release, and the shadow players who created Malta's shame.

The banker

Early in the morning on March 20, FBI agents arrested a 38-year-old Iranian in the departure lounge of Washington Dulles International Airport and charged him with breaching US banking sanctions on Iran.

US prosecutors describe Ali Sadr Hashemi Nejad, known as Ali Sadr, as "a sophisticated, well-connected, international businessman with immense wealth and influence … [and] a history of duplicity".

In 2003, Sadr, who was studying at Cornell University, won asylum in the US based on claims he'd been tortured in Iran for his political beliefs, only to lose it in 2009 after his immigration lawyer was jailed for immigration fraud.

While Sadr still claims it is too dangerous to live in Iran, US prosecutors say he made 50 trips there from 2010 to 2015.

After leaving the US in 2009, Sadr took a job with his father, Mohammad Sadr Hashemi Nejad, who is reportedly Iran's richest man. The job involved the family's Stratus Group construction business and a $US475 million building project in Venezuela set up by the Iranian government.


People attend mass at the chapel in Daphne Caruana Galizia's home village of Bidnija, a week after her murder. Rene Rossignaud

By 2008 US and UN sanctions on bank transfers were forcing Iranian companies to route their deals through Dubai. It was an inconvenience, not a showstopper, Stratus Group executives told The Wall Street Journal.

In practice what that meant was that Ali Sadr in 2009 obtained a St Kitts and Nevis passport by paying $US250,000 through a citizenship-by-investment scheme.

The passport whisperer

The St Kitts citizenship scheme was set up in 2006 and run by Henley & Partners, headed by Christian Kälin, who would loom large in Sadr's life.

US prosecutors say Sadr acquired four separate St Kitts passports, all of them current, and used at least two of them interchangeably. Henley says it had "no knowledge" of this.

According to US court pleadings in April, Sadr spent 2010 using his St Kitts passport to set up companies in Dubai, Turkey and Switzerland, each with Swiss bank accounts, and channelled $US115 million in Venezuelan payments through them while insisting "there's no Iranian behind any of the accounts", the US court was told.

"Why the hell do I see the name of Iran in there," he berated a careless Stratus employee after a 2012 invoice.


"If that invoice shows the name 'Iranian' anywhere then we will have serious problems," Sadr said in another email.

Meanwhile, in St Kitts and Nevis, in January 2010, the Labour Party government had won a fourth term in office with the help of Strategic Communication Laboratories.

Christian Kälin, chairman of Swiss group Henley & Partners, which ran the St Kitts citizenship scheme. Supplied

SCL is the British parent company of Cambridge Analytica, the election adviser whose chief executive, Alexander Nix, was caught by Channel 4 cameras in Britain in March bragging about using underhanded techniques to swing more than 200 elections around the world.

In St Kitts, opposition leader Lindsay Grant's campaign failed after SCL filmed him being offered a bribe by an undercover operative posing as a real estate investor.

Henley & Partners says the firm "exchange[d] some information and ideas" with SCL "with a view to better understanding the political landscape in the Caribbean" but had no formal relationship. In December 2010 SCL was in action again in elections in Saint Vincent and the Grenadines when Kälin provided separate advice.

The politician

A former SCL operative emailed Kälin on June 2, 2012, about "interesting developments" in Malta: "I can introduce you to the opposition leader, if that helps, he's young, very purposeful and open to international investment, and many say he'll win."


"Good idea," Kälin emailed back.

Joseph Muscat swept to power in March 2013 in a landslide campaign promising an end to corruption and "Malta For All". In office, Muscat's campaign manager, entrepreneur Keith Schembri, became the prime minister's chief of staff. Another senior Labour figure, Konrad Mizzi, was appointed energy minister.

Within months Muscat announced that Henley & Partners would run a citizenship by investment program for Malta, which in effect provided citizenship in the EU.

Passports would cost €650,000, with another €150,000 to be invested in government bonds for five years, Muscat explained at the London launch of the program on October 31, 2013. New citizens didn't have to live in Malta, just to buy a house or rent accommodation for several years.

Malta's capital, Valletta. Kohls

After his speech, Kälin told Muscat he should meet someone. It was Ali Sadr (Henley says it believes the two had met previously).

The red flags

Every three months since 2009, Malta Financial Services Authority had been publishing notices by the EU's Financial Action Task Force urging "special attention" to money-laundering risks "when considering requests by Iranian financial institutions to open branches and subsidiaries in their jurisdiction".


In May 2014, the US Treasury warned that Iranians were obtaining St Kitts passports "to facilitate financial crime".

When Ali Sadr wanted to open a bank in Malta he used his St Kitts and Nevis passport to do it. Despite the red flags attached to his background, the MFSA approved a banking licence for Sadr's Pilatus Bank in January 2014 and a top up securities licence in August 2015.

If there was one person who might have raised concerns in Malta it was Christian Kälin, who knew of the repeated US warnings of Iranians using St Kitts citizenship. A Henley spokesperson said, "At no point . . . did we have any reason to believe that Mr Sadr was involved in criminal activity."

Kälin invited Sadr to his 20th wedding anniversary in Switzerland, while Muscat and Schembri attended Sadr's own wedding in northern Italy in 2015.

Kälin was beside Muscat in Dubai at a Henley forum in November 2015, declaring, "Malta of course is now the most successful program in the world, raising over 1 billion euros within 18 months."

Malta's economy was booming: cash from passports was producing 3 per cent of GDP. It looked like a win for everybody – until February 2016 when Daphne Caruana Galizia began drip feeding a series of sensational stories.

Joseph Muscat, Malta's prime minister. TOMOHIRO OHSUMI

The 'witch of Bidnija'


How to describe Caruana Galizia? She was already an institution in Malta before she launched her Running Commentary website in March 2008.

Her husband, Peter, is a lawyer. They were bringing up three sons, a close family life overshadowed by the partisan feelings her newspaper columns stirred: alternately hated by Labour Party supporters and loved by Nationalist Party voters.

They called her the witch of Bidnija. The family collie had its throat cut, then their terrier was poisoned. Another collie was shot, while one of her sons came home in the early morning to find someone had piled tyres and petrol containers against the back of the house before setting it on fire.

This was before she began daily posts on Running Commentary.

The trick to running a one-woman news operation is that you have to do it all – the news, the investigations, the analysis and the colour. Caruana Galizia had the complete skill set, capped with a gossip writer's capacity to turn the knife and still be funny. She took no prisoners, Prime Minister Muscat least of all.

Last May, she wrote of Muscat: "It's only a matter of time before that corrupt bastard begins quoting Francis of Assisi's famous prayer at us again as he did in the last general election. To save him the bother, I've rewritten it for him in a contemporary version."

She rattled off a scorching version of the prayer that began:

"Henley make me an instrument of your passports sales …"


The site where Daphne Caruana Galizia died. dpa picture alliance / Alamy Stock Photo

The antipathy was mutual. Muscat was suing her – one of the 46 libel suits current at her death.

From February 22, 2016, Caruana Galizia progressively revealed that Konrad Mizzi and Keith Schembri, Muscat's closest lieutenants, had set up unnamed Panama companies linked to New Zealand trusts. It caused a sensation in Malta, but both men insisted these were harmless structures.

The investigator

The critical moment in the saga went largely unnoticed. In the last days of February, Manfred Galdes, who headed Malta's Financial Intelligence Analysis Unit, gave notice to Sadr's Pilatus Bank that the FIAU would inspect its books.

The Malta Financial Services Authority had visited Pilatus in October 2015 and found large transactions involving politically exposed persons from Azerbaijan.

The FIAU also moved to open an inquiry into Caruana Galizia's reports in March 2016, but Galdes' decision to audit Pilatus, over six days from March 15 to 22, appears to have been unrelated. He was just doing his job. It proved an inspired move, in two unexpected ways.

Twelve days after the audit, on April 3, the Panama Papers made headlines around the world. The files of Panama law firm Mossack Fonseca had been obtained by German newspaper Süddeutsche Zeitung and were revealed in a global collaboration by the International Consortium of Investigative Journalists.


At the time, the ICIJ had no Maltese members. And so it fell to the Financial Review to run a hastily cobbled together story detailing Mizzi and Schembri's offshore holdings – the Australian interest was mainly the New Zealand trusts.

The Panama stories had major impact in Malta and provoked frenzied requests for more information.

The Australian Financial Review's coverage of NZ trusts held by senior Maltese government figures triggered claims in Malta of an ICIJ conspiracy. L'Orrizzant

Who is Egrant?

Over four articles the Financial Review revealed how Nexia BT, a Malta advisory firm that was close to the government, had contacted Mossack Fonseca five days after Muscat's March 2013 election win to "set up a Panama company and possibly a trust". Nexia would tell Mossack Fonseca the name of the ultimate beneficial owner only in a Skype call.

By August that order had grown to several British Virgin Islands companies and three Panama companies – Hearnville Inc, which would be turned over to Mizzi in mid-2015; Tillgate Inc which would go to Schembri; and a mystery company, Egrant Inc.

Eventually Mizzi and Schembri would hold their Panama companies via two new New Zealand offshore trusts. But who was running Egrant?

Fourteen offshore companies administered by Nexia BT were identified in the Panama Papers.


What went unnoticed was that many of these offshore companies had accounts at Pilatus Bank – but after the FIAU's exhaustive audit days before, officers recognised the names of the offshore companies now in the news.

Unlike any other regulator in the world, the FIAU knew just where to begin chasing the Panama stories down.

On Thursday, April 7, FIAU boss Galdes went to Police Commissioner Michael Cassar with a seven-page preliminary report that noted how Pilatus Bank was "exposed to very high risks of Money Laundering and Funding of Terrorism without basic mitigating measures being applied" and that "it appears that there has been a glaring, possibly deliberate disregard of the applicable legislative provisions".

Cassar went on leave the following day then resigned citing health reasons. No police action was taken.

Daphne Caruana Galizia had been sued for libel in London by Henley & Partners. AP

The mystery of 17 Black

On April 7, the day Galdes took the FIAU report to the Police Commissioner, I contacted Caruana Galizia for the first time, asking for some background information on some Maltese names.

She was generous with her help, at once amused and exasperated that the only journalist writing about Malta with access to the Panama Papers knew so little about the country.


Our correspondence went back and forth. On April 22 Caruana Galizia emailed: "Neil, are there any documents/emails that refer to these companies:

Willerby Trade Inc (incorporated in the BVI) – I think this may be Brian Tonna's (partner at Nexia BT)

Mackbridge Ltd [sic]

17 Black Ltd.

I'd be grateful if you could take a bit of a look."

I had just filed my last Malta story. I drew a blank on "Mackbridge" (she meant Macbridge) and 17 Black but sent her documents on Willerby Trade and several other companies. This included a March 2014 profit-sharing agreement under which Willerby, owned by Brian Tonna, was given a half share of fees Nexia BT earned from passport sales, for "referral fees".

Maltese Prime Minister Joseph Muscat with British Prime Minister Theresa May and the Queen at the opening of the Commonwealth Heads of Government Meeting in April. Jonathan Brady

Doing this was a breach of ICIJ protocol that bans members from passing documents on to other media. This wasn't my decision to make. My bad.


Caruana Galizia led her site with the agreement the next day. The FIAU chased it up and discovered that three Russians who applied for citizenship through Nexia BT paid €166,832 directly into Willerby Trade's Pilatus account.

The personal interest

Soon after, Willerby paid €100,000 into the Pilatus account of the Maltese Prime Minister's chief of staff, Keith Schembri.

Tonna and Schembri said this was a repayment of an earlier loan, but the FIAU was sceptical, in a report it passed to police in July 2016, and recommended forensic tests to see if loan documents had been backdated.

The report noted that the PM's office had been extensively involved in setting up the cash-for-passports scheme, and that Schembri was said not only to have a close association with Pilatus Bank founder Ali Sadr but to have taken a personal interest in the licensing process of the bank.

The FIAU report was not conclusive but it recommended police investigate the possibility that the Prime Minister's chief of staff was receiving kickbacks for passports (which he denied).

The police did nothing when the FIAU forwarded the report to them in July 2016.

When the Rule of Law committee for the European Parliament asked Police Commissioner Lawrence Cutajar last year why no investigation followed he simply said the FIAU report "never reached formally the Malta Police".


Daphne Caruana Galizia finished her last column with the now famous words, "There are crooks everywhere you look now. The situation is desperate." AP

On August 8, 2016, six days after FIAU chief Galdes resigned, the FIAU returned to Pilatus and this time all the missing documents had been found; the bank got a clean billing.

The FIAU sent another report to police in November 2016, citing suspected money laundering payments by Keith Schembri's Virgin Islands company to Adrian Hillman, the managing director of Allied Newspapers Ltd, the publisher of the Times of Malta, which Caruana Galizia had reported back in March. Police Commissioner Cutajar said he did not formally receive that one either.

From Azerbaijan to Malta

A fourth FIAU report of 130 pages explores links between Mizzi and Schembri's Panama companies and 17 Black and Macbridge in Dubai – the two companies Caruana Galizia asked me about in April 2016.

In early 2015, Malta signed a controversial $1 billion gas supply contract with Azerbaijan.

The FIAU traced $US1.6 million paid into 17 Black's Noor Islamic Bank in Dubai from a Latvian bank. The payment came from a company in the Seychelles owned by an Azerbaijan national.

It was only this month that Süddeutsche Zeitung revealed new emails that showed Nexia BT acting for Mizzi and Schembri's companies. They show that in December 2016 Nexia BT told a Bahamas bank that Hearnville and Tillgate expected to receive $US2 million a year in income, with 17 Black and Macbridge as their "main target clients".


The FIAU suggested a flow of funds from Azerbaijan to the Seychelles, to Dubai, then to Mizzi and Schembri's Panama companies, then to their New Zealand trusts, and finally to Malta. But the FIAU report was never completed.

Both men deny ever receiving funds from 17 Black. Schembri says 17 Black was part of a business plan that was never implemented.

At the end of 2016, the investigation stalled.

But the FIAU's audit in March 2016 had another outcome that no one expected.

The whistleblower

During the audit, the FIAU repeatedly complained that key documents were missing from files. Pilatus executives blamed all of the problems on Maria Efimova, a Russian woman who had been appointed just eight weeks before as executive assistant to Sadr.

What Pilatus execs didn't know was that when Efimova feared she would become a scapegoat, she decided to make copies of a range of client files.

On March 29, 2016, she was fired. When she lodged a legal complaint that she had never been paid, Pilatus made its own criminal complaint: that she had improperly claimed €2000 in expenses (which she denied), and she was arrested.


With her passport confiscated and facing prosecution, in November 2016 she reached out to Caruana Galizia, and shared her story in February last year.

"In the days before the FIAU investigators arrived [in March 2016], and even during the investigation itself, the bank's executives ordered staff to hide whole files and to remove details of major transactions from other files," Efimova told Caruana Galizia. "Lots of information was concealed from the FIAU investigators."

Efimova said that one of the Pilatus accounts that caught her eye in March 2016 was Egrant Inc.

Efimova said that in March 2016, the same month as the FIAU audit, $US1.016 million was transferred to an Egrant account in Dubai from the Pilatus account of Al Sahra FZCO, a Dubai company belonging to Leyla Aliyeva, the daughter of Ilham Aliyev, the ruler of Azerbaijan.

But who owned Egrant? Efimova claimed that the file for Egrant's Pilatus bank account contained two declarations of trust dated August 20, 2015, which said that Egrant's ultimate owner was Michelle Muscat, the wife of Malta's Prime Minister.

Caruana Galizia's April 20, 2017 article linking Egrant to Michelle Muscat made huge waves.

Prime Minister Muscat flatly denied any link to Egrant. He called the claim "the biggest lie ever told" in Malta's politics, and set up a magistrate's inquiry.

A month before, Henley & Partners had threatened to sue Caruana Galizia for libel in London, after gaining approval from Muscat and his chief of staff, Schembri. Pilatus Bank, meanwhile, sued her in Arizona, where her internet server was based.


Muscat called a snap election in June, which he won handsomely. Three weeks later the FIAU's head of compliance, Charles Cronin, and its head of financial analysis, Jonathan Ferris, were fired.

After testifying to the magistrate's inquiry, Efimova fled Malta, saying that she feared for her life.

She said later: "When we were talking with Daphne I actually mentioned, I told her, 'You should be careful because they put bombs here.' And she told me, 'Ah no, they will not do it, what they do to me, put bombs to my car?'"

Caruana Galizia's reporting continued, now taking to task the new Opposition Leader for his unpaid tax bill, among other targets, but the stress appeared to be taking a toll.

She finished her last column with the now famous words, "There are crooks everywhere you look now. The situation is desperate." She hit the publish command at 2.35pm on October 16, before going out to her car to go to town.

Alfred Degiorgio, waiting on the hill above her, called his brother George.

The runaround

The European Parliament's Rule of Law committee in January reported a round-robin process whereby Malta's Attorney-General, Peter Grech, claimed only police had the power to open a criminal investigation; and Police Commissioner Lawrence Catujara said the police had received the FIAU reports and given them a file number but they could not be investigated because they were not "formally reported".


Last year, the government referred six Panama-related inquiries to separate magistrates to investigate. But these are frozen while the targets of the inquiries pursue legal challenges. In any case, magistrates cannot order police to investigate.

The Rule of Law committee's report was blunt: Energy Minister Mizzi and chief of staff Schembri should step down.

"Keeping them in office affects the credibility of the government, fuels the perception of impunity and may result in further damage to State interests by enabling the continuation of criminal activity," the report concluded.

Muscat dismissed the report. His loyalty to his colleagues and friends – to Schembri and to Mizzi – is coupled with an implacable refusal that they should face police investigation.

Muscat's political problem is that if his judgment is flawed in regard to his friends, how should Malta interpret his equally vehement denials of any link to the mystery Egrant?

He dismisses Efimova as a "dubious" witness, but that is principally because Malta issued an international arrest warrant for her over the disputed €2000 expenses claim – only to have Greek courts cite technical grounds to refuse the extradition application, while European politicians express concerns for Efimova's safety in Malta.

In a BBC interview in January Muscat managed the awkward segue from expressing horror at Daphne's murder, to diffidently identifying himself as the chief victim: "Besides her family I think if there is one person that has suffered from this assassination, it's us. Just because this long shadow has been cast on us."

Muscat and Schembri did not respond to questions from AFR Weekend. Muscat told Malta journalists this week that he would not comment on the Daphne Project's revelations about 17 Black on legal advice.


At the May Day rally on Tuesday he referred only to the Egrant allegations. "One year ago, the biggest political lie to ever be told was levelled towards me and my family and I insist that if a single shard of truth is found, I will leave," he said.

Muscat, meanwhile, is moving on. Besides passports, Malta's other growth industry is online gaming, which has been infiltrated by the Italian mafia.

Now Muscat wants to make Malta the world centre for crypto-currencies.

What could go wrong?