I’ve been writing articles for years about the European Bank for Reconstruction and Development (‘EBRD’ – funded by 73 countries including Malta to foster transparency and democracy) using fraud to help Putin-linked oligarchs steal our money while wrecking the fledgling democracies in Eastern Europe.
Some of my articles were published by Maltese opposition bloggers with specific goals of alerting Malta’s former EBRD Governor Dr Edward Scicluna and current EBRD Governor Clyde Caruana. Scicluna and Caruana never reacted and therefore Malta continues to lose more money to the EBRD. Therefore I feel it’s necessary to explain again how Malta is losing money, this time with more details, and how the EBRD connects with the Putin Regime.
The EBRD fraud campaign is super simple. I was an early witness because I was a whistleblower when the assets of the largest bank in Latvia, Parex Bank, were embezzled in 2004 and the EBRD used fraud to cover-up the embezzlement putting billions of Euros of losses to Latvian and European taxpayers. The embezzlers were Putin’s oligarchs including Eduard Khudainatov who was found later to be the front owner of Putin’s superyacht currently seized in Italy.
The Latvian government decided not to use my whistleblowing to save money. Instead, the government decided to purposefully lose billions of euros by secretly paying the EBRD to pretend to invest in Parex thus creating an illusion that Parex wasn’t looted even though it was. The numbers were as follows: (1) the EBRD announced it invested 80 million Euros in Parex because it was valuable, (2) the government quietly wrote off fake Parex assets for several years without prosecuting anyone, (3) the book value of Parex assets was 4.9 billion Euros at the beginning, (4) the government eventually admitted that 800 million of those assets were fake meaning Parex was insolvent at the time EBRD invested, (5) Latvia made a surprise announcement of paying 190 million Euros to the EBRD to reverse the investment with the EBRD getting, and the Latvian people losing 110 million Euros.
The EBRD fraud was secret for a while in the sense that Latvia didn’t tell the public about the pre-negotiated reversion until it was done. Latvia even designated it as a ‘state secret’ meaning anyone telling the truth about the national debt could be prosecuted and imprisoned. Besides the eventual confession of the government, which only a small minority of voters in Latvia understood, the fake accounting was also revealed in documents from Eurostat. Eurostat wrote that Latvia asked to make the EBRD-Parex deal ‘confidential’ and Eurostat agreed. People who aren’t trained in accounting might not understand the significance of this type of fraud (secretly paying someone to pretend to buy something) however any finance minister of any country can falsify national debt to sell fraudulent bonds to the public in this way.
The evidence from Eurostat is in this video, filmed in Malta
Somehow the mainstream media missed the Latvian confession and Eurostat evidence even though I sent it to all the top journalists who are supposed to be covering Russia. And, nobody from the 73 countries getting robbed by the EBRD spoke up. Journalists and politicians who proclaim they are fighting Putin’s money launderers become silent as soon as they have an opportunity to shut down a real Putin money-laundering network. As a result, the EBRD is running similar scams with at least four Putin-linked banks right now in 2023: Citadele of Latvia, Siauliu of Lithuania, Ameriabank of Armenia, and Bank of Cyprus.
Now let’s focus on how Malta loses. Malta was an original member of the EBRD which was established when the USSR collapsed. Malta owns 00.01% of EBRD shares. According to the EBRD’s 2022 annual report, the value of its assets on December 31st was 71.625 billion Euros and its liabilities were 52.289 billion Euros. This leaves an equity book value of 19.336 billion Euros. We can multiply this by 00.01% and figure that Malta’s shares are worth 1,353,000 Euros.
The problem is that the EBRD’s balance sheet is fake. The EBRD did admit to a small part of the problem in 2022. The EBRD normally reports huge profits from funding affordable lending to small entrepreneurs in impoverished dictatorial countries with no rule-of-law. Amazing how the EBRD manages to earn huge profits from this when no other credit institution has ever been able to do so. At least in 2022 when Russia invaded Ukraine with support from Belarus, the EBRD did write off about 3 billion Euros of its assets in Russia and Belarus. The EBRD reported a net loss of 1 billion Euros instead of the usual net profit of 2 billion Euros. An obvious question could have been ‘Why did the EBRD lend 3 billion Euros which ended up in Putin and Lukashenko’s pockets even though the EBRD has a mission of fostering democracy?’ however again the mainstream media missed this.
To examine how I know that, even after this write-off, the EBRD still has fake assets on its books, I’ll turn quickly back to the Parex example. When the EBRD announced investment into Parex and booked that as an asset, it was a fake asset. The seller (Latvian government) and buyer (EBRD) both knew its value was zero according to a report by their consultant Nomura which was leaked later. The EBRD initially pretended the asset was worth 80 million Euros and later pretended it was worth 190 million Euros even though really its value was zero the whole time.
Evidence from Eurostat, in the video link above, shows that the EBRD’s current investment in Parex successor Citadele bank is similarly fake. And, strong clues suggest the EBRD’s current investments in Siauliu (former Ukio) Bank of Lithuania, Ameriabank of Armenia, and Bank of Cyprus are similarly fake. If the EBRD is forced to write off all assets where they purchased something worthless because they got secretly promised a back-hander to do that, then the EBRD will be exposed as insolvent.
Then is the problem of the 52 billion Euros of liabilities that the EBRD admits to. From that, 43 billion is made up of bonds that the EBRD has issued which all should be publicly acknowledged to be in default since all were issued using false financial disclosures. Normally, since the EBRD is a limited liability company, shareholders would not be responsible for repaying the bonds. However since the EBRD is a fraud and I’ve been notifying all of the member countries of this for years by sending them the evidence, the member countries are legally obliged to pay back these bonds. This problem is magnified by the fact that EBRD bonds are issued with Triple-A ratings which the ratings agencies justify on the theory that the member countries are guaranteeing the bonds. Member countries should ask the ratings agencies not to write that these bonds are guaranteed since officially they aren’t, however, so far nobody has complained thus again making the Member countries liable.
For Malta, 43 billion euros times 00.01% represents a 4,300,000 euro loss which is a liability currently not admitted to by Malta. This liability gets larger every year since the EBRD issues more bonds every year.
If that isn’t bad enough, consider that all countries that have received fake investments from the EBRD have clear grounds to sue the EBRD. Again using Latvia as an example, if Latvia will ever vote new politicians into power who decide to recover amounts stolen by Parex and the EBRD under the old politicians, the amount Latvia can sue for isn’t only the 110 million Euros lost directly to the EBRD. It’s also the amount that was embezzled from Parex which was at least 800 million Euros (the government now admits to this loss) and possibly as much as 4.9 billion Euros (if all Parex assets were fake, which is possible). That’s a big liability for the EBRD, wiping out a quarter of its equity. Forcing the EBRD to admit to instances where they have done the same to other countries will expose deeper trouble.
Also, the EBRD does many of its ‘investments’ using off-the-books ‘special funds,’ a trick sometimes used by financial institutions to hide liabilities from people reading their annual reports. According to the EBRD website, as of February 2023, Malta had invested 104 million Euros in these ‘special funds.’ The EBRD makes it sound like these special funds are targeted to help countries like Ukraine. However don’t get too excited because clues I will explain later indicate that the EBRD investments in Ukraine are similar to what the EBRD did in Latvia where they announced an investment, but later it turns out the investment was a scam and they ripped off all the people they were supposed to be helping. Malta should try to recover this 104 million as soon as possible before other EBRD investors also start trying to get their money back which will cause the EBRD to collapse swiftly.
If we add in as liabilities the problem that the EBRD’s subsidiary banks laundered many billions of Euros for the Putin Regime and are still doing that now, then we should consider all bonds issued by the EBRD to be unrepayable, except by member countries coming out-of-pocket to pay them back. If member countries somehow get out of paying the bonds directly, many banks, insurance companies, and pensions invested in EBRD bonds will realise they got robbed and some of them could need bailouts.
Here is finally good news for Malta. According to the EBRD annual report, the EBRD will buy back shares from any member country. All the member country needs to do is ask. It’s not clear what amount the EBRD will pay however maybe the amount is the 1,353,000 book value. Malta should ask for this money right now since this option is better than getting zero which is what the shares are worth. If Malta divests immediately, then will start a slow process where Malta’s liabilities related to the EBRD will decrease instead of increase every year.
Once Malta is out, there will still be two remaining problems. The European Central Bank has purchased bonds from the EBRD and from countries falsifying their national debts in cooperation with the EBRD including Latvia (definitely), Lithuania and Cyprus (probably), and any other country in the EU where the EBRD is running financial tricks. And, the biggest problem of all, is the continued military threat of the Putin Regime which is exacerbated by Putin’s bankers channeling bribes to Western governments. If Malta quits from the EBRD, these problems will still exist however at least Malta won’t be contributing anymore.
Coming up in Part 2: Learn how the EBRD right now is cheating Ukrainian taxpayers with a fake ‘investment’ in Megabank. Hint – this deal is similar to the old Parex deal. And, learn how the World Bank’s IFC is involved. Malta is a member of the World Bank.
By: John Christmas, exiled whistleblower against the Parex-Latvia-EBRD fraud and co-author of ‘KGB Banker’
Thanks to brave Mark Camilleri for exposing a scam most journalists are afraid to talk about! I sincerely hope Malta will cut its losses and get out of the EBRD.