Between Two Parties

Ever since its 1964 independence from Britain, Malta has been held hostage by just two parties: the Labour Party and the Nationalist Party. Observers usually characterize the PL as social-democratic and the PN as conservative, but these labels do not reflect the parties’ true political coordinates.

In the 1960s and the 1970s, the rivalry between the two groups was rooted in politics: the PL had connections to Third World independence and socialist movements and was committed to maintaining the welfare state. These policies set it on a collision course with the PN and the Maltese Catholic Church, the conservative party’s close ally.

The PN’s rejection of Labour’s economic policies and the results of the 1981 general elections sparked a political crisis, followed by violent clashes between the parties’ supporters.

But, as in other countries, the parties have since met in the neoliberal middle. Today, so-called social issues — like divorce, LGBT rights, and IVF — are all that separate them.

Indeed, since returning to power in 2013, the PL has pursued a Third Way economic policy, privatizing public assets and attracting global capital. That is, it has largely followed the course set by its predecessor, the PN.

However, this lack of political differences has not ended the rivalry. Both parties own TV and radio stations, allowing them to broadcast partisan interpretations of economic, social, and cultural reality. The political discourse in Malta resembles a competition between two fan clubs.

Disguised as rivalry, the relationship between the parties is in fact symbiotic. Both undermine any constructive criticism by labelling it as their opponent’s propaganda, a strategy that helps them implement neoliberal policies with little public resistance.

Biased and Partisan

Daphne Caruana Galizia wrote about topics ranging from national identity and food to Maltese politicians’ secret bank accounts. She was a towering, if controversial, opinion-maker whose influence in Malta was unrivalled — a position that won her twenty-sixth place in Politico‘s list of “the twenty-eight people who are shaping, shaking, and stirring Europe.” Her blog had as many followers as all the major local media outlets combined.

Caruana Galizia’s unparalleled influence and tragic death should not prevent us from critically assessing her legacy and motivation.

In 2016 she gained international attention for publicizing the Panama accounts of two PL government officials. The following year, she once again stormed the local and international headlines with a new revelation. Based on the testimony of a former bank employee, she claimed that the prime minister’s wife owned Egrant, a Maltese company featured in the Panama Papers. Further, she said that the corporation had received enormous sums of money from the Azerbaijani government. The allegations prompted a snap election, in which the incumbent Labour Party won by a landslide.

These stories make it seem like exposing corruption ranked high on Caruana Galizia’s list of priorities, but she was far from unbiased.

Her journalism seemed more interested in exposing than investigating. She did not always publish reliable or politically relevant stories. Apart from the sources like the Panama Papers, she circulated information provided by contributors whose claims could not be verified. These practices made Caruana Galizia a target of numerous libel suits, some of which she lost.

We also can’t define her journalism as nonpartisan because she rarely targeted the Nationalist Party. For example, when the PN lost to the PL in 2013, she did not criticize the outgoing administration, and not because it has a spotless record of immaculate performance and socially beneficial policies. Instead, she regularly praised the PN government’s decisions. Not only did she not investigate the administration’s role in the Malta shipyard scandal — which lost the shipyards €80 million and led to their privatization — she applauded the move.

Another reason to doubt Daphne Caruana Galizia’s unbiased “crusade against untransparency and corruption” was her reluctance to expose and condemn the offshore accounts of former PN ministers who appeared in the Panama Papers. Moreover, when Italian authorities linked the son of the former conservative prime minister to the Ndrangheta money-laundering ring, Caruana Galizia tried to place himtried to place him above suspicion because he “is immediately recognizable — even to those who haven’t a clue who his parents are — as well brought up.” Finally, at least a few scandalous revelations came from anonymous informers whose insight could only be acquired by participating in the very misdeeds they were reporting.

Caruana Galizia’s uncompromising attitude toward the PL was shaped by her activism in the turbulent 1980s. Her antipathy ran so deep that she rejoiced at the death of Dom Mintoff, former party leader and prime minister, and frequently called the Labour Party “essentially a malign organisation.”

Her anti-Labour bias had an elitist tone. She published politically relevant information alongside tabloid-style hit pieces about (mainly) Labour Party politicians’ and their (largely working-class) supporters’ bad fashion and “tacky taste.” She disdainfully referred to PL officials as “bogans.”

It appears that Caruana Galizia saw a link between politicians’ inappropriate manners and their inclination to corrupt practices. Practically everyone Caruana Galizia regarded as a crook also, in her opinion, lacked style and/or had terrible grammar. She seemed to believe that the people she classed as bogans should never hold any position of power.

Caruana Galizia’s social background helps illuminate this connection. Born in Sliema, the predominantly Anglophone bourgeois town, she graduated from the prestigious, Jesuit-run college preferred by Malta’s ruling class. She became the leading voice of the Anglicized upper-middle class, who shared her disdain for the upwardly mobile. Privileged circles venerated her as much as she was unpopular among the working and lower classes.

Her intolerance of the Labour Party was so profound because, in her opinion, it stood for the interests of — and was represented by — “philistines,” “trash,” and “peasants.” For that reason, the PL “could never be on the same footing as the Nationalist Party.” She dedicated numerous articles to deriding the first lady’s clothes and frequently scoffed at the prime minister’s “peasant utilitarianism.”

More evidence of Caruana Galizia’s devotion to the upper crust came when Adrian Delia was elected leader of the PN. She seemed to regard him as an unpolished political newcomer who had dared to infiltrate the conservative party’s highest ranks. Though she loyally supported the party, her distaste for Delia aligned with her belief that only a select few are suited to govern the “essentially criminal” Maltese people.

Caruana Galizia claimed that Delia used an offshore account to process the profits from a London-based brothel. She paired this politically important revelation with derogatory remarks about his manners, supposedly identical to those of the Labour Party leader. She also slammed him for his “horrendous posture” and a possible extramarital affair with a “white trash” model. When Delia’s supporters reacted to Caruana Galizia’s revelations with threats, she described them as “rabble” with poor grammar.

Caruana Galizia only condemned corruption of a very particular kind. She did her utmost to expose the illegal behavior of so-called bogans, but she ignored the identical misdeeds of the old elite and their associates. She decried mismanagement of finance, offshore accounts, bribes, and abuse of power only if they involved “craven, useless, low-IQ” “guttersnipes.”

Calling Caruana Galizia’s activism anti-establishment is completely unjustified: rather than assaulting the powerful, she guarded the establishment’s privileges from the aspiring elites she deemed inferior.

The Offshore Malta

Malta’s relationship with financial scheming extends beyond its civil servants’ offshore accounts: the country is the European Union’s number four facilitator of corporate tax avoidance. Almost a quarter of Malta’s GDP — “one of the fastest-growing economies in Europe” — relies on financial services and online gambling.

The Nationalist Party administration set this economic model in place in 2005, a year after Malta joined the European Union.

According to research undertaken by the network of European Investigative Collaborations (EIC), every year Malta wipes out €2 billion in foreign tax by giving shareholders 85 percent tax rebates. According to data leaks, 70,000 offshore companies are registered in Malta.

The country’s tax regime drains revenue from other EU countries, but we must understand this situation in the context of Malta’s integration in the global economy and the single market. In order to stay afloat, small peripheral member states compete with established ones by underbidding on tax rates.

When it assumed power in 2013, the Labour Party added another dubious source of revenue: the Individual Investment Programme (IIP). The IIP is designed to make the country a haven for the global rich. Promoted as a means to “attract [ . . .] talent, expertise and business connections,” the IIP allows wealthy individuals to purchase citizenship. Anyone willing to contribute €650,000 to a national development fund and invest €150,000 in government stocks or bonds can apply.

In May 2017, during Malta’s European Union presidency, the international community was steaming over the MaltaFiles — a set of investigations into the country’s shady world of financial services. The documents revealed the scale of illegitimate transactions that pass through the country: secret accounts belonging to Azeri state oil companies, Russian and Turkish elites, shell companies of tax-dodging German corporations and Ndrangheta-run gambling companies.

The revelations shocked the press and prompted one of Germany’s regional finance ministers to denounce the country as the “Panama of Europe.”

One would expect that, after having dedicated considerable effort to exposing some politicians’ offshore accounts, Caruana Galizia would criticize Malta’s economic model and tax regime. Alas, this was not the case: an unsurprising fact when we consider her economic beliefs and partisan loyalty.

After all, Caruana Galizia was a free-market evangelist. “Uniquely for a (Maltese) journalist,” she wrote in the comments section of one post, “I was raised in a business environment.” She frequently flaunted her insight into the rules of the business world.

Also, she was under investigation for tax evasion: the tax department claimed she owed €101,194 after a tax audit discovered sources of undeclared revenue.

Caruana Galizia did not criticize Malta’s tax regime or its economic model — which an administration she supported had introduced — but limited her disapproval to her opponents’ corruption, tastelessness, and immorality. Rather than challenging the legitimacy of all money-laundering facilities, she focused exclusively on a private bank with alleged ties to Labour’s prime minister.

The MaltaFiles did not prompt Caruana Galizia to recognize the economy’s systematic faults. Instead, she argued that the PL’s tarnished reputation threatened the country’s economic success: “Malta was getting along swimmingly before the Prime Minister and his two henchmen decided to set up companies in Panama,” she wrote, adding that “only since April 2016 [has]  . . . Malta  . . . attracted this kind of hostility.”

She also failed to inquire into the online gambling industry’s links to organized crime. When rumors spread that a large Swedish online gambling company might leave Malta, she lamented that the PL’s incompetence and bad reputation was putting jobs at risk. She wrote:

A remote gaming company cannot operate in a jurisdiction where the behavior of politicians in government, and the malfunctioning of institutions, have caused reputational damage that has in turn drawn the attention of banks in other jurisdictions to Malta as a potential money-laundering risk.

When the gambling giant confirmed it would continue operating in Malta, she expressed her relief.

In other words, Daphne Caruana Galizia did not criticize the crooked economy, just the damage crooks in power did to it. Her relentless attacks on “bogans” were not merely ideological but also practical — she seemed to believe that their tarnished reputation was hurting Malta’s offshore economy. Her journalism aimed to oust political newcomers and restore the rule of the pedigreed elites. She failed to consider that her enemies’ crimes were not committed in vacuum and were inseparable from the fabric of the country’s tax regime, the interests of global capital, and the activities of organized crime.

Regardless, her vociferous revelations must have become a threat to the interests of the financial and the political powers.

We do not known who ordered and committed this ruthless assassination. However, it is clear that seeking justice and preventing future crimes like this must go beyond Caruana Galizia’s superficial critique of reputation and moral credentials or Malta’s purported “culture of impunity.”

The true crusade for justice should challenge the ethical foundations of the existing economic model — Daphne Caruana Galizia’s murder might itself become another strong argument for change.