Shqip 16 Jul 14

Albania Ex-PM’s Daughter Takes Legal Route to Riches

Confidential bank files reveal how a law firm owned by the influential daughter of Albania’s former Prime Minister Sali Berisha became a gateway for major foreign investors looking for licences, permits and political support from her father's government.

Besar Likmeta BIRN Tirana
Argita Malltezi launched a profitable law firm while her father, Salli Berisha, was in power. | Photos by TV Klan Print Screen/YouTube and European People's Party/Flickr

From complex negotiations over billion-dollar energy projects to neighbourly disputes, solicitors Malltezi & Kola were the firm to turn to – if you could afford them.

A few months after Sali Berisha was elected Albanian prime minister in 2005, his daughter Argita Malltezi returned home from Pristina, leaving behind a well-paid job with the United Nations Interim Mission in Kosovo, UNMIK, to open a law firm in the capital Tirana.

Teaming up with one of her friends and co-workers at UNMIK, Flutura Kola, they set up three solicitors’ firms – Malltezi & Kola, Kola & Associates, and Malltezi & Associates – sharing an office and a growing list of lucrative clients.

In a matter of months, they became the go-to solicitors for multinationals looking to invest in Albania’s fast-growing economy.

But former clients claim that they employed Malltezi for her family links and to sidestep threats of racketeering, not just for her legal skills. Berisha’s daughter denies all wrongdoing, insisting that she never used her father’s position to further her career.

One of Flutura Kola’s business accounts with Kola & Associates was credited with 350,000 euro in just ten months in 2008.

Click here to see document.

According to documents obtained by the Balkan Investigative Reporting Network, BIRN, one of Flutura Kola’s business accounts with Kola & Associates was credited with 350,000 euro in just ten months in 2008. She earned a further 250,000 euro from other business contracts through another, personal, account over three years.

Many of the businesses obtained permits and licences from the government, often with Berisha’s personal endorsement, having employed Malltezi & Kola, although BIRN has no evidence that Malltezi’s familial links played any part in the decisions.

The bank statements were seized as part of a money-laundering investigation into Berisha’s controversial friend, Bosnian businessmen Damir Fazlic. Allegations against him were dropped and Fazlic has maintained his innocence.

But the cache of files reveals, for the first time, Malltezi and Kola’s extensive list of high-profile clients, and is likely to reflect only a fraction of their business as information related only to Flutura Kola and Kola & Associates was sequestrated.

No documents linked to Malltezi, Malltezi & Kola and Malltezi & Associates were collected because, a source close to the investigation told BIRN, prosecutors were fearful of targeting the daughter of the prime minister.

‘Clean hands’

Berisha successfully campaigned on a ‘clean hands’ platform in 2005, promising to rid the country of the endemic corruption that had plagued its institutions since the fall of the communist regime in 1991.

But his tenure as Albania’s prime minister from 2005 to 2013 was marked more by corruption scandals than probity.

Bank account of Kola & Associates.

Malltezi & Kola became embroiled in some of the allegations – most notably for the firm’s role in the Fazlic affair – and Argita Malltezi was accused by the opposition of acting as a gatekeeper to the Prime Minister.

Berisha and his family have always denied any wrongdoing and have painted the accusations as a smear campaign by the Socialist Party, which was then in opposition. Malltezi even successfully sued two MPs for defamation when they alleged that she had abused her father’s position. She refused to be interviewed or respond to questions posed by BIRN.

However, despite the court rulings in her favour, the allegations undoubtedly tarnished Berisha’s image, contributing to his party’s defeat by the Socialists in the June 2013 parliamentary elections.

Malltezi was widely considered as an eminence grise in her father’s government. She is described as such in two internal memos by US embassy in Tirana at the time, which were published by the website WikiLeaks.

In one conversation between the embassy and journalist Mero Baze, a former Berisha adviser who became one of his most vocal critics, it is claimed that “Berisha makes decisions without consulting ministers” and “only heeds advice from family”, particularly his daughter, Malltezi.

According to business registration records, Malltezi’s law firms were established on December 19, 2005, but only started to receive attention from the press a year later when she voluntarily disclosed her wealth as the daughter of the prime minister.

Malltezi revealed she had real estate and bank accounts worth more than 600,000 euro, which sparked accusations of corruption from the Socialist opposition. She rejected the claims, arguing that her wealth was the fruit of her well-paid job with UNMIK.

Her law firm’s first major controversy came in October 2008, when, following a number of reports in the Albanian media, the prosecutor’s office launched an investigation into money-laundering against one of the firm’s star clients – the Bosnian-British businessman Damir Fazlic, who had worked as an election adviser to Berisha during his successful campaign in 2005.

The probe against Fazlic infuriated the Albanian premier who described him as “a family friend”. The investigation revealed a web of companies between Albania and Cyprus involving in a series of suspect property transactions and share transfers which had been facilitated by Malltezi & Kola for Fazlic.

But the case against the prominent businessman was dropped when requests for information from Cyprus and Bosnia went unanswered. The move also followed intense political pressure on the prosecutor’s office from the government and Berisha.

However, new evidence discovered by the BIRN suggests that Malltezi, and her lawyer colleague, Flutura Kola, may have earned more than a million euro from the sale of worthless agricultural land in the Porto Romano area of Albania to their client Fazlic.

Berisha included Fazlic’s Porto Romano holdings in an energy park, pushing up the price of the land eight-fold in the following years.

Click here to see document.

Malltezi also does not appear to have been declared to the authorities the earnings as part of her official disclosures as the daughter of the Prime Minister.

Soon after the transactions, Prime Minister Berisha included Fazlic’s Porto Romano holdings in an energy park, paving the way for refineries and power plants, and pushing up the price of the land eight-fold in the following years.

In an exclusive interview with BIRN, Fazlic argued there was nothing illegal with doing business with the prime minister’s daughter, but did admit that her powerful position meant he would “never get racketeered” which, he said, was a problem that other businessmen faced.

High-profile clients

The confidential documents obtained by BIRN reveal that in 2008, apart from the controversial Bosnian businessman, Malltezi & Kola had at least a dozen other high-profile corporate clients, many of them bidding for deals with Berisha and his government.

The clients, who paid hundreds of thousands of euro in fees every year, ranged from the construction companies Diekat and Superbeton, to energy corporations like Viloil, Union Eolica, Italgest, Stream Petroleum and ASG Power, to the internet service provider Albania Online and telecoms company Unifi.

In 2007, ASG Power, a US-Swiss consortium, received permission from the Albanian government for an energy project including a 1.9 billion gas facility near Fier and a new electricity interconnection line between Albanian and Italy. Construction never went ahead.

Italgest hoped to build a 150MW wind farm on the Albanian coast and met with the Prime Minister in 2007 to discuss the plan. Berisha said in a statement at the time that “the government had provided support for the success of this project”. The scheme has yet to take off.

Union Eolica Albania received permission to build a 150MW wind farm near the town of Kavaja, although construction has not started.

Canadian oil firm Stream Petroleum has been exploring the country’s energy reserves and was name-checked by the Prime Minister in a 2008 speech lauding his government’s success in attracting foreign investment.

In October 2010, Berisha gave the green light to Unifi Communications to build an underwater telecommunication cable between Albania and Italy.

Despite the impressive roster of clients that contracted Malltezi & Kola, not everyone was happy with the firm’s work.

One particularly disgruntled former client, the Pakistani businessman Zafar Ansar, gave a glimpse of how the law firm operated by leaking a number of emails to the daily Tema in 2009.

Ansar, who was formerly the Albanian honorary consul in Pakistan, had hired Malltezi’s law firm in 2007 to mediate with the local authorities over the construction of a power plant in Albania worth nearly 100 million euro.

However, according to Ansar, apart from seeking legal fees of 200euro an hour, half the monthly average wage in Albania, Malltezi asked for a success fee worth up to three per cent of the total investment, touting her father’s influence as a guarantee.

In an interview for Top Channel TV in January 2013, Ansar said he signed up with Malltezi & Kola because the firm was owned by the daughter of the Prime Minister and could smooth things over with the local bureaucracy.

“I found the correspondence a bit odd, as a consulting fee with a 'success' fee was a bit unusual for a legal firm,” Ansar said.

“I agreed, knowing she was the daughter of the Prime Minster [and] would be instrumental in achieving the goal of setting up the power plant without difficulties,” he added.

Ansar says that after the initial contacts, Malltezi pressured him to buy a plot of land worth millions of euro for the power plant. When he refused, he says, the local authorities killed the whole project.

“The land that she offered me was a raw piece of land without any infrastructural facilities, very expensive and it did not meet the requirements,” Ansar said.

“Since I did not agree to buy, I was told the project to set up 120 MW power plant would have difficulties and might not be approved,” he added.

Picking up on Ansar’s revelations, the Socialist Party of current Albanian PM Edi Rama, who was then in opposition, accused Malltezi of trading of trading in her father's influence to enrich herself.

In response to the allegations, Malltezi said she had done nothing illegal.

“The businessman in question contacted me six years ago, not the other way around, requesting legal assistance in the preparatory phase of the project,” she said in a statement. “Every action of my legal office has been totally private,” she added.

Malltezi also accused Socialist leader Rama of slander and said that she would bring legal charges against his party.

“I wanted to remind Mr Rama that only in dictatorships are the legal fees of private businesses set by governments,” she said. “Accusations about blocking investments are ridiculous,” she added.

But her law firm’s influence on affairs - big and small – is difficult to deny.

An intervention by the firm to mediate in a dispute between a bookshop and a contractor in 2008, recounted in a US Embassy cable published by WikiLeaks, explains why her services were so much in demand.

The international bookshop, which is located in the ground floor of the Palace of Culture, a communist-era building in Tirana’s Skenderbej Square, had its inventory damaged by poor renovation work done by an Italian contractor on the floor above.

A conflict ensued between the bookshop and the Italian contractor, which was immediately resolved out of court after the store’s owner contracted Malltezi’s services.

“Mrs [Argita Malltezi] Berisha, whose private law practice in Tirana has flourished in recent years, has increasingly found an enviable demand for her services,” the US Embassy noted in the leaked cable dated June 2008.

“In what can only be described as a demonstration of her keen legal skills, the owners of the second floor business paid damages the next day, an uncommonly fast resolution in a country where law suits can take years to resolve themselves,” it added in the tongue-in-cheek dispatch.

The law firm was closed in 2009, but many of the firm’s former employees, such as Brikena Kasmi, Lealba Pelinku and Joana Qeleshi, went on to receive important appointments in the public administration and the justice system, while accusations of corruption against Malltezi persisted.

Kasmi was appointed as the deputy minister of justice, Lealba Pelinku was nominated the head of Albania’s public procurement office, while Joana Qeleshi was appointed as the chief justice of the Durres District Court.

Malltezi, on the other hand, has largely withdrawn from public life, perhaps preferring to lie low after years in the limelight.

This article was produced as part of a programme titled “A Paper Trail to Better Governance”, with funding from the Austrian Development Cooperation (ADC) and implemented by BIRN Kosovo and BIRN HUB. The content does not reflect views and opinions of ADC.

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