Malta: Decade-Long Erosion of the Rule of Law

Daphne Caruana Galizia, the lead journalist in the investigation of the Panama Papers and corruption in Malta, was assassinated last week by a car bomb near her home. Ms. Galizia brought the spotlight to Malta’s connection to the infamous Panama Papers.

• She had also recently exposed in an article on her blog - which was often had a larger readership than the combined circulation of the country’s newspapers - the connection of Prime Minister Joseph Muscat and two of his closest aides to offshore companies and the sale of Maltese passports and payments to the government of Azerbaijan.  
• While there have been several terrorist explosions in Malta in recent history, Ms. Galizia had filed a police report just two weeks prior to her death because of death threats she had received. 

Opposition politicians in Malta argue that the crash of the rule of law in Malta dates to Muscat’s return of the labor party to power in 2013. Four police commissioners have resigned under his leadership, with the newest commissioner, Lawrence Cutajar, taking up his post in August 2016.

• According to the World Bank, all of Malta’s gains in the rule of law in the decade spanning 1996 to 2006 have been erased in the decade since. The inclusion of Maltese entities in the Panama Papers scandal was certainly a factor in the decline. 
• Malta’s deterioration in the rule of law is not as severe as in other economies worldwide, such as Belize and Mauritania and conflict-torn Syria and Libya.
• Notably, the countries with the steepest decline in rule of law during the 2012 to 2016 period declined further when Panama Papers were released.