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Malta votes in early elections tied to Panama Papers scandal

Associated Press logo Associated Press 3/06/2017 By STEPHEN CALLEJA, Associated Press

VALLETTA, Malta — Maltese voters are heading to the polls a year early after Prime Minister Joseph Muscat called snap elections following an investigation into allegations his wife owned a company related to the Panama Papers scandal.

Surveys show Labour's Muscat is likely to win a second, five-year term Saturday. But polls indicated one-fifth of voters were undecided, giving the Nationalist Force made up of the Nationalist Party and newly formed Democratic Party a slight chance.

The Panama Papers scandal, which detailed offshore companies and other financial data of the rich and powerful, exposed Malta's energy minister and Muscat's chief of staff as having acquired a company in Panama.

Muscat called new elections and ordered a magisterial inquiry after allegations surfaced that his wife also owned a company in Panama. They deny wrongdoing. Maltese voters went to the polls a year early on Saturday in a snap election called by Prime Minister Joseph Muscat following an official investigation into allegations his wife owned a company related to the Panama Papers scandal.

Surveys showed Labour's Muscat was likely to win a second, five-year term. But polls indicated one-fifth of voters were undecided, giving the National Force made up of the Nationalist Party and newly formed Democratic Party a slight chance.

The Panama Papers scandal, which detailed offshore companies and other financial data of the rich and powerful, exposed Malta's energy minister and Muscat's chief of staff as having acquired a company in Panama.

Muscat called new elections and ordered a magisterial inquiry midway through Malta's first-ever stint at the presidency of the European Council after allegations surfaced in April that his wife also owned a company in Panama. The Muscats deny the allegations.

Setting up an offshore company is not illegal or evidence of illegal conduct, but shell companies can be used to avoid taxes or launder money.

After the publication of the Panama Papers last year, Muscat was criticized for retaining Energy Minister Konrad Mizzi and chief of staff Keith Schembri, whose names figured in the document dump. They acknowledged that they acquired the companies but deny wrongdoing.

Since then, two other magisterial inquiries have been opened after money laundering and kickback allegations were made against Schembri by opposition Nationalist leader Simon Busuttil. Schembri denies any wrongdoing.

None of the investigations had finished before Saturday's vote, prompting Busuttil to accuse Muscat of taking the country to the polls early to "save his skin."

During the campaign, Busuttil — Muscat's prime challenger — charged that accusations of corruption had hurt Malta's financial services industry and would continue to damage the island's reputation.

Muscat has insisted he has done nothing wrong, and has pledged to resign if the inquiry concerning him and his wife, Michelle, reveals any link to the company opened in Panama.

During the campaign, he promised continuity and greater wealth for a country that has the lowest unemployment rate ever at 4.1 percent — the third lowest in Europe — and in 2016 registered a budget surplus for the first time in three decades. Muscat also championed civil rights causes, introducing civil unions in 2014.

Voting takes place all day Saturday. There are no exit polls and counting of votes is carried out manually as starting Sunday morning. Results are expected later Sunday.

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