The political intrigue behind
The Malta Financial and Business Times continues the
serialisation of MaltaTodays exclusive reportage on the notorious
dissipation of Cecil Paces BICAL empire
As featured last week, the BICAL bank was already in the
eye of the Finance Ministry as a run on the bank threatens the bank
with closure. A DOI statement in the days preceding 25 November announced
the bank has encountered liquidity problems. Bank president Cecil Pace
assures his clients that there was no danger facing his banks
liquidity, and that assets by far exceeded liabilities.
But Cecil Pace is already concerned that actions by one of his directors
has complicated matters ahead of BICALs closure.
Cachia Zammit lends the PN a hand
Unrecorded foreign transactions at BICAL had been allegedly used to
pay for printing equipment purchased by the Nationalist party, through
the intervention of a joint manager at the bank without
the approval of the BICAL board.
The late Lawrence Cachia Zammit, brother of Alexander "Sandy
Cachia Zammit, PN Minister of Health before 1971, was the treasurer
of the Nationalist party during the BICAL crisis.
It had been revealed in a much publicised court sitting that Lawrence
Cachia Zammit had concealed government documents at the Rabat BICAL
branch for his brother Sandy, today Maltas resident ambassador
to the Vatican.
During that November month in 1972, Cecil Pace would get to know through
Hambros Bank that the credit limit in BICALs account of 360,000
pounds had been exceeded. Cecil Pace was baffled - none of the bank
records in Malta had indicated that this was the case. He called for
Lawrence Cachia Zammit, and asked him to come in from leave and meet
on the Kihna, Paces yacht: "I am aware that there is a shortage
that has not been recorded in the books. What happened?" Pace asked
Cachia Zammit denied any wrongdoing, but was pressured by Cecil Pace
into admitting to having made unrecorded foreign transactions of up
to 360,000 pound sterling. Cachia Zammit insisted that he had meant
to repay Pace for the money that went missing.
The foreign transactions were allegedly made to pay for printing equipment
purchased by the Nationalist party apart from other personal expenses
by Cachia Zammit in the expensive pastime of keeping racehorses. The
bank appears to have never been repaid by the Nationalist party for
the disbursements of foreign payments made through Hambros bank.
Cachia Zammit had in fact written a letter confirming the discrepancy
in the funds, offering to make up for the missing funds by personally
transferring property to Cecil Paces companies. Certainly, a segment
of the misappropriated money appears to have been utilised to sponsor
expenses related to the upkeep of racehorses by Cachia Zammits
wife, Angele nee Borg Manduca in Malta, Rome, Madrid, Paris and London.
A more considerable segment however had been allegedly used to pay for
the printing equipment purchase by the Nationalist Party.
Mintoff lays his claim
According to Cecil Pace, he had been asked to accept to become deputy
leader of the Labour party by Mintoff. An employer of 3,000, and a popular
personality, Pace had the ability to garner great support for the MLP.
"Not being politically minded, I rejected the offer. Soon I was
approached again this time with the proposal to sign away half my equities
to nominees and I would be rewarded with choicy contracts
for my companies whilst my bank would be handling Government accounts
and permits to open branches all over the island," Pace says.
"None of these proposals interested me, but I was told better agree
than go to jail. I asked on what grounds and I was told that reasons
would be found. And so it came about that I was arrested, mainly based
on the pretext that I stole, by devious means, all the monies deposited
and hence a controller was to take over all my assets to protect all
depositors, creditors and shareholders."
The contents of the letters have now been corroborated by new facts
that are published in MaltaToday.
To come to terms with the background of this statement one has to return
to the early seventies. One of Mintoffs closest aides Anton Buttigieg,
later to become President of Malta, met Cecil Pace for lunch at the
Excelsior Hotel, one of the many hotels owned by Cecil Pace and later
to be given away unscrupulously for a pittance to well placed
Mr Paces refusal to offer his services as deputy leader and hence
bolster Labours chances at the polls had not thwarted others from
making other proposals to him. This is the exchange between poet and
politician Anton Buttigieg and Cecil Pace, as recalled by Pace himself:
Anton Buttigieg: "Why not welcome him [Mintoff] as a partner. He
is quite the businessman you know." Buttigieg suggests to Cecil
Pace he transfer part of the bank that was later to be closed down,
to Mintoffs nominees. In return Cecil Pace would have the possibility
to open new branches and to take over government accounts.
Cecil Pace: "Then all this is to make him richer."
Buttigieg did not stop here. He also referred to Paces companies
and insinuated that they too be partly transferred to Mintoffs
And there were other messengers. allegedly Frans Dalli also suggested
to Cecil Pace that he should consider the idea of partnering up with
Dom. Certainly, the comments that remain enshrined in Cecil Paces
memory are those allegedly made by Karmenu Mifsud Bonnici, who way back
in 1972 had already appeared to have taken up his role as Mintoffs
emissary. He had just taken over as BICAL controller following the suspension
of the bank licence on 25 November 1972.
KMB: "Are you going to sign the deal with Mintoff?" he reminded
Cecil Pace a day before his arrest on the 6 January 1973. The conversation
took place in the presence of Dr George Schembri, who was later to be
appointed a judge. "His proposal offers you advantages."
Cecil Pace: "And if I dont sign?"
KMB: "They will arrest you."
Cecil Pace: "Why arrest me?"
KMB: "They will find reasons. They will come for you tomorrow morning.
You have time to sleep over it."
The next day Cecil Pace waited for the police to arrive. It was the
6 of January 1973, the feast of the three kings. Sergeant Joe Cordina,
later to become a director of prisons and now head of the Civil Protection
Unit, arrived to take him off to Kordin. Cecil Pace would remain there
for the next 14 years.