An article published on Bloomberg on March 11th speaks about Christian Kalin – the Passport King – and how he managed to turn from editor of a guide to doing business in Switzerland to a key figure in the budding passport industry, as well as a main protagonist in the infamous Henley & Partners. The article outlines how Kalin first set up a Passport Selling scheme for the Caribbean island of St. Kitts and then proceeded to sell the formula to five other countries. Including Malta. As has become par for the course under Joseph Muscat’s Labour we find more information here about Malta’s scheme than was ever tabled in parliament by the Optimist Party. The tone of the article and critical analysis of how and why passport schemes will not be lost on most readers.
Particularly jarring is how part of the Henley contract includes an obligation for the Prime Minister of a sovereign state to act as some kind of ambulant salesman and participate in fairs across the globe pitching a sale. Jason Azzopardi is quoted as saying that the scheme “prostitutes citizenship”…. to say nothing about how it insults the whole institution of the office of the Prime Minister – transformed into a cheap cosmetic salesman: but hey, cosmetic salespersons get somewhere nowadays no? After all isn’t Phyllis Muscat using her great expertise as an importer of waxing products to “run” the CHOGM show. Malta Ottimista indeed.
From the article: The Passport King (Bloomberg)
In the summer of 2013, Kalin took his product to Malta, an island of 420,000 people near Sicily. The stakes were now much higher. Maltese citizenship confers the right to live and work anywhere in the European Union and to travel visa-free to the U.S. “That’s pretty much the entire story,” says Demetrios Papademetriou, an expert on investor immigration programs and founder of the Migration Policy Institute in Washington.
In January of last year, Malta started selling citizenship for €650,000. (Over the next few months, it added additional investment requirements.) During its first year, the program raised more than €500 million—an amount equal to 16 percent of the government’s 2014 budget. Henley earns a 4 percent commission on all the funds paid to Malta. The firm also gets €70,000 from each of its clients, and additional fees if their spouses or children apply.
Kalin says he designed the program with higher barriers to entry than elsewhere. Applicants are run against law-enforcement databases and checked by a due diligence firm. Even then, a candidate who comes up clean might be rejected simply because something doesn’t feel right, Kalin says, offering the hypothetical example of a Pakistani national with a pharmaceutical business in the Central African Republic.
Despite these apparent safeguards, then–EU justice commissioner Viviane Reding blasted the program in January 2014. “Citizenship must not be up for sale,” she said. The truth is, though, the EU can do little about the program other than make speeches. There’s no legal basis for stopping a member country from exercising its sovereignty. “The reason the EU commission really slammed down on this,” says Papademetriou, “was because it amounted to selling an EU passport and they didn’t trust Malta to do the due diligence.”
Jason Azzopardi, a Maltese lawmaker from the opposition Nationalist Party, calls the program the “prostitution of our citizenship.” He says the prime minister deceived voters by waiting until after being elected in June 2013 to mention the idea of selling passports.
Kalin brushes it all aside. “This is the key point,” he says. “The opposition realizes that this program is going to keep them out of power for a long time. It’s going to bring in a lot of money, and whoever is in office is going to benefit.”
Malta’s Individual Investor Programme was eventually modified to include a residency requirement that is vague even according to the program’s CEO, Jonathan Cardona. “It doesn’t say physical residency,” Cardona says. “We expect an individual to be in Malta for a number of days; we don’t go into the specific number. If you’re asking me, are these people going to move here entirely, I would say, ‘Listen, let’s not fool ourselves.’”
“Forget residency,” says Apex Capital’s Katz. “There’s not even an educational requirement. You don’t have to have graduated high school. The only criteria are you have dough and you’re not a criminal.”
Prime Minister Muscat presents things differently. He describes Malta’s citizenship program as an exclusive membership club open only to the best and brightest of the wealthy. “If you are after the cheapest route to citizenship,” he tells the audience at Henley’s Singapore conference, “Malta is not for you. If you’re after a program that allows in all and sundry, then, sorry again, we’re not for you. But if you want to join the highest-end talent program in the world, we welcome you.”
As the prime minister speaks, a PowerPoint glitch plays an unfortunate trick on him. He’d come onstage after a slide show introducing Henley’s salespeople, the last of whom was blond-haired Christopher Willis, the firm’s rep in St. Kitts. Willis’s giant head shot, next to a map of the Caribbean, is frozen on-screen. It looms over the prime minister’s shoulder the entire time he’s pitching Malta and its better class of citizenship program. However Muscat tries to sell it, nobody watching will be able to forget where it all started.
