By Agathe Duparc, Montse Ferrer & Antoine Harari
In Libya, a country that has been torn apart and bled dry since the fall of Gaddafi, international criminal networks with connections to Europe and Switzerland make big profits through fuel smuggling.
Public Eye and TRIAL International uncovered business transactions in 2014 and 2015 between the Swiss trader Kolmar Group AG and a smuggling network whose main players are now facing trial in Sicily. This is the story of a long-running investigation in Switzerland, Malta and Sicily.
Operation ‘Dirty Oil’
In January 2015, Catania’s Guardia di Finanza launched a vast, covert operation in Sicily, code-named ‘Dirty Oil’. By tapping phone lines and tailing boats in the high seas, the police managed to identify suspected smugglers of Libyan fuel.
The legal documents that we were able to consult reveal that the Italians first took an interest in Fahmi Ben Khalifa, who was also involved in human trafficking. While investigating his entourage, the Italian investigators came across a former Maltese football star – Darren Debono.
Officially, the former Valletta Football Club player had gone into the fishing business, opening the successful seafood restaurant the Scoglitti. Now known as the Porticello, the restaurant located in the Maltese capital of La Valetta was recommended by all the guidebooks at the time.
The police discovered that Darren Debono had purchased highly sophisticated satellite phones in Sicily using his company card, a rather bizarre purchase for an alleged fishing businessman. He controlled several companies, two of which are registered in Malta: Oceano Blu Trading Ltd and ADJ Trading Ltd.
In the latter he associated himself with Fahmi Ben Khalifa, whose two petroleum tankers – the Basbosa Star and the Amazigh F – regularly travelled along the Libyan coast.
While the investigators were taking a closer look at the two men’s business activities, they were alerted to possible irregularities in the movement of gasoil to Italy by the Italian petrol giant ENI, which had operated in Libya for several decades.
In the midst of this, they identified another Maltese national: Gordon Debono, the football player’s namesake, a Ferrari-driving businessman who boasts owning one in every colour available. His small trading company, Petroplus Ltd, chartered two ships: the Ruta and the Selay, which travel to Libya regularly. The trio have accomplices in Sicily.
A WELL- OILED MACHINE
The Italian investigators laid out the network’s modus operandi. The chain starts in Zawiya, a coastal town situated 45 km west of Tripoli, where the country’s main refinery – run by Azzawiya Oil Refining Company, an affiliate of the NOC – is located.
Fahmi Ben Khalifa, nicknamed ‘the king of Zawiya’, had struck gold. There, he cooperates with the Shuhada al Nasr brigade, which is supposed to guard the facility but in reality takes a cut of the profits from smuggling activities.
The armed group’s reign of terror also involves in human trafficking. In June 2018, the UN Security Council and the US Office of Foreign Assets Control imposed sanctions on the brigade’s leader Mohammed Kachlaf and five other heads of migrant smuggling rings in Libya.
The gasoil, imported from Europe and then subsidised to make the product affordable for the local population, is diverted from the refinery tanks and transported in trucks to the ports of Zuwara and Abu Kammash, where Fahmi Ben Khalifa has built a makeshift oil terminal.
Small fishing boats loaded with the product then set sail and unload their shipments onto Darren and Gordon Debono’s oil tankers, which are waiting along the Libyan coast. These ships then sail to Malta or Sicily, with some transferring their cargo to larger oil tankers.
The Guardia di Finanza filmed some of these ship-to-ship transfers, which were posted to their Twitter account.
In March 2016, the UN Panel estimated that fuel smuggling was one of the country’s armed groups’ main sources of funding, alongside human trafficking and arms smuggling. They estimate that it employs some 500 people through approximately 20 networks.
DIRTY FUEL IN PETROL PUMPS
While tracking Debono’s four ships from June 2015 to June 2016, the Italian investigators discovered that Maxcom Bunkers SA, a company based in Augusta, Sicily, was the main recipient of the 82,000 tonnes of smuggled fuel.
The fuel was bought for EUR 27 million, although the same volume would be worth EUR 51 million at market price. According to our estimates, the product was sold for EUR 0.28 per litre instead of the 53 cents in the official market.
In Libya, this type of 0.1 % gasoil – i.e. gasoil with a sulphur content of 1,000 ppm max. – can be used to power cars. But in Europe, applicable standards only allow this type of fuel for maritime use.
According to the Italian investigators, this fuel, mixed with other components, was sold in petrol stations in Italy, France and Spain, even though it is unfit for automobile consumption in Europev.
The Dirty Oil investigation stopped at the Italian borders and only covered a short period of time, from June 2015 to June 2016. As a result, a chapter of the story was left in the dark: Kolmar’s adventures in Malta and the Zug-based company’s collaboration with Ben Khalifa’s network starting in the spring of 2014.
Kolmar’s suspicious payments
The name Kolmar does not appear in the indictment submitted to the court in Catania, a 284-page document of which we obtained a copy. Yet, the Italian investigators did uncover some concerning facts.
Colonel Francesco Ruis, head of the Guardia di Finanza, confirmed that at one point in time he had been interested in the Zug-based company because it had an office in Milan. ‘Kolmar was a close partner of Gordon and Darren Debono through its bunkering activities [i.e. supplying fuel for ships] in Malta’ he told us, while refusing to comment further on the matter.
Another source close to the case explained that the links with Italy had ultimately been considered too tenuous to warrant a case being opened there. ‘At the time, we were not able to prove that the Libyan products bought by Kolmar had been sold in Italy,’ he added.
In spring 2018, the name Kolmar was however mentioned by the media in connection with the smuggling.
Three journalists of the Investigative Reporting Project Italy (IRPI) published an investigative report on the smuggling of Libyan fuel through Malta, providing details of operation Dirty Oil, which was ramped up in the wake of the death of Maltese journalist Daphne Caruana Galizia.
The investigation sought to pay tribute to Galizia, who was assassinated by a car bomb on 16 October 2017 and who was, at the time, investigating a number of issues including gasoil smuggling through Malta.
In the middle of a paragraph of IRPI’s article and with no further clarification, we learn that Kolmar was renting an oil storage unit in Malta in which ‘at least one of the Debono Group’s tankers offloaded a shipment of smuggled fuel.’
The journalists reported on ‘substantial payments’ made by Kolmar to ‘one of Darren Debono’s companies’ and wrote that these payments were analysed by the Italian police. At the time, the Zug-based company did not respond to a request for comment.
FOLLOWING KOLMAR’S TRACKS
We managed to dig up the ‘substantial payments’ noted by the Italian journalists. A well-informed Maltese source provided us with a copy of a bank statement from Oceano Blu Trading Ltd, one of the companies linked to Darren Debono, which had accounts at the Banif Bank in Malta.
It shows that from 18 June to 22 July 2015, Kolmar made 11 transfers totalling over $11 million to the small company registered in the town of San Gwann, in the outskirts of the Maltese capital. No information is given regarding the reason for these transfers or the identity of the bank from which they originated.
Oceano Blu Trading Ltd was run by Darren Debono until May 2014. It was then administered by Nicola Orazio Romeo, an Italian national suspected of having links to the Sicilian mafia and who is also accused in the Catania legal case.
According to an Italian legal source, if the two men were indeed working together, there is no doubt that the former Maltese footballer was the one dealing with the Libyan side of the business.
During their investigation, the Italian police identified Oceano Blu Trading Ltd as one of the main companies used by the Ben Khalifa network, which strengthens the hypothesis that the $11 million paid by Kolmar corresponds to the purchase of Libyan fuel from this network.
KOLMAR AND ITS MALTESE STORAGE TANKS
Malta has always been a strategic location for companies involved in the trade of petroleum products in the Mediterranean. The small island is located at the crossroads of several maritime routes and its oil terminals are in high demand.
Kolmar set up shop there in 2012, thereby launching, according to its own LinkedIn page, a new business in the ‘gasoil blending, breakbulk cargoes, cargo supply in Med’ sector.
The Zug-based firm offered bunkering services, providing marine gasoil to barges that operated as floating petrol stations shuttling between Malta’s port and the coast where vessels stopped to refuel. It also blended products onshore, a practice that consists of mixing fuels to alter their quality, but which can also enable those with fewer scruples to hide the origin of their products.
Several Maltese sources who work in the sector witnessed the rise of the Zug-based company in the island. The issue is so sensitive that these people were only willing to testify anonymously. One of them told us that ‘Kolmar was supplying fuel to ships, but this business was not sufficiently profitable due to a high number of competitors.
Therefore, their tanks in Malta also became a place where smuggled Libyan petroleum products were stored and blended,’ says one of the sources. The purpose of blending: ‘to conceal the Libyan origin of the product.’
‘The smuggling of fuel from Libya via Malta picked up around late 2013 and early 2014, peaking in 2016,’ says another observer. He added that ‘there were two phases: petroleum products are first delivered to terminals in Malta, after which the ships move along the coast of Malta to the edge of Maltese territorial waters – to an area called Hurd’s Bank [a more shallow area where passing ships can lay anchor to resupply or transfer goods] to make ship-to-ship transfers’.
It was during the first phase, starting in the spring of 2014, that Kolmar made a name for itself. We travelled to Malta, where the Zug-based company was able to operate under the radar for over a year, while neither the Italian nor the UN investigators noticed the Ben Khalifa network.
Agathe Duparc is a journalist for Le Monde.
Montse Ferrer is a Senior Legal Advisor and Investigator of the International Investigation and Litigation (IIL) program of TRIAL International.
Antoine Harari – Swiss freelance investigative journalist based between Geneva and Palermo.
PUBLIC EYE For around fifty years, the Swiss NGO Public Eye has offered a critical analysis of the impact that Switzerland, and its companies, has on poorer countries. Through research, advocacy and campaigning, Public Ey world. With a strong support of some 25,000 members, Public Eye focuses on global justice.
TRIAL INTERNATIONAL is a non-governmental organization fighting impunity for international crimes and supporting victims in their quest for justice. TRIAL International takes an innovative approach to the law, paving the way to justice for survivors of unspeakable sufferings. The organization provides legal assistance, litigates cases, develops local capacity and pushes the human rights agenda forward.