A Maltese bank that was a frequent target of Daphne Caruana Galizia, the investigative journalist and anti-corruption crusader who was murdered last year, is facing scrutiny by European banking regulators.
The European Banking Authority (EBA) told the Guardian it was conducting preliminary inquiries into Pilatus Bank following requests by the European commission and the European parliament.
Pilatus and its chair, Ali Sadr, were frequent targets for criticism by Caruana Galizia, who was killed by a car bomb last October. The murder sent shockwaves across Europe and raised a public outcry over the deteriorating rule of law on the Mediterranean island. Three men have been arrested and charged with carrying out the killing.
Caruana Galizia was being sued in a US court by Pilatus and Sadr at the time of her death. The lawsuit accused the journalist of malice, defamation and causing damage to the bank’s “reputation and actual and prospective economic relationships”.
The case, which was withdrawn after her murder, revealed the extent of the legal threats being faced by Caruana Galizia as a result of her often scathing journalism.
Financial authorities at the EBA, which monitors the integrity of the EU banking sector, have been asked by the European parliament to examine whether Maltese financial authorities, which have oversight of Pilatus and other banks, are fully equipped and free from conflicts of interest in their work. The EBA has also been asked to assess whether Pilatus should continue to hold an EU licence or whether the European Central Bank or EBA should intervene.
A spokesperson for the European commission, which also sent a request to the EBA, told the Guardian it wanted to “ensure that financial institutions in Malta, including the Pilatus Bank, satisfy the requirements laid down in [EU] anti-money laundering and counter-terrorism legislation”.
“While the enforcement of anti-money laundering rules is the responsibility of member states, the European commission is responsible for checking the way in which EU anti-money laundering legislation is transposed and implemented by the member states,” the spokesperson added.
The EBA declined to offer more details about its initial examination of the issues.
A spokesperson for the bank said: “Pilatus firmly believes in the rule of law and stringent regulation, as this is paramount for the integrity of the financial systems in which we operate. Our Maltese licence was assessed and issued by the [Malta Financial Services Authority] in full compliance with the laws after a two-year process. Our robust compliance and governance meet the highest European standards and is thoroughly and independently audited.”
Pilatus filed its lawsuit against Caruana Galizia in May 2017. It alleged that she made “false and misleading” statements about the bank on her blog, Running Commentary, including allegations that the bank was being used to launder money, that it secretly held documents related to Michelle Muscat, the wife of the prime minister, Joseph, and that the bank had ordered staff to conceal information from Maltese financial authorities.
“Pilatus has not committed any criminal acts,” the court filing said. “Mr Sadr has not committed any criminal acts.”
Caruana Galizia was also accused of misappropriating the bank’s confidential information, such as client names.
The bank has denied holding any accounts for the prime minister or his wife. It also said in the court filing that Caruana Galizia’s references to Sadr’s nationality and country of origin, Iran, were a “malicious attempt to smear his character”.
Caruana Galizia’s son Matthew, who is also a journalist, told the Guardian the lawsuit was a sign of how aggressively his mother was pursued.
A spokesperson for Pilatus said: “She published serious, false and defamatory allegations against the bank based on dubious sources with no evidence.”
The case against Caruana Galizia was filed in the state of Arizona, where her blog was registered by a company based in Arizona.
