Story Publication logo September 20, 2018

Murder in Malta


The harbor of Marsaxlokk on Malta. Image by Shutterstock.

In October 2017, the most famous investigative journalist on the island of Malta, Daphne Caruana...

Great Siege Monument and temporal Daphne Caruana Galizia Monument. Image by Continentaleurope. Malta, 2017. (CC BY-SA 4.0).
Great Siege Monument and temporal Daphne Caruana Galizia Monument. Image by Continentaleurope. Malta, 2017. (CC BY-SA 4.0).

The slumbering village of Bidnija lies two kilometres inland from the north coast of Malta. A cluster of tawny limestone houses stands around the church with its red dome. Olive oil has been produced here for over 5,000 years and the surrounding landscape is scruffy and rugged, the fields marked out with dry-stone walls. On a nearby hill, a gated community of modest villas commands views of the seashore and the rest of the island to the south.

It was from one of these villas that Daphne Caruana Galizia ran Running Commentary, her blog about Maltese politics. The term “blog” undersells its influence. On a good day, her website received 300,000 visits – the population of Malta is under 450,000. The rhythms of Caruana Galizia’s reporting differed according to the story. On one occasion, when out for coffee with her friends, she posted from her smartphone a leaked photo of a person she claimed was a government minister in a German brothel (the minister denied the allegation and began legal proceedings against Caruana Galizia for libel). But despite a reputation for impulsiveness, she could spend months standing up a story. She spent over half a year investigating Maltese connections in the Panama Papers, a leak of millions of documents in 2016 from the offshore law firm Mossack Fonseca, combing through files and cultivating a Russian whistle-blower in Malta. Caruana Galizia preferred to work late at night, convinced that her mind was sharpest in the small hours. The blog she ran made her not just a household name but something of a celebrity. She noticed people noticing her when she took her three sons to school, her dog for a walk, or went to her sister’s house in the evening to watch TV. And she became part of the fabric of Maltese life. “Reading Daphne” was as routine as doing the dishes or shopping for groceries.

And then it was over in a flash. On October 16th 2017, as she was speeding downhill in her car towards the bank, a bomb exploded beneath the driver’s seat of her Peugeot 108. The vehicle was obliterated. Its chassis, hurled by the blast into a field, looked like the bleached skull of an extinct creature. Caruana Galizia’s remains were strewn across the hillside. She was 53 years old.

Her murder appeared to be the melodramatic climax of the most persistent theme of her reporting. Malta is often held up as one of the European Union’s successes – since 2011, the Catholic country has legalised divorce and same-sex marriage – but Caruana Galizia believed that these liberal gestures masked a darker and more troubling reality. At different times she described the island as a “nest of thieves”, a “den of crooks” and a “slew of ineptitude, violence and corruption”.

“What struck me most was the amount of explosive used,” said Anthony Abela Medici, a retired detective who was the first person to lead Malta’s police forensics laboratory. “A fraction of the amount of TNT would have done the job. The bomb wasn’t just designed to kill Daphne, but to make a statement out of her death.” In the aftermath, two questions lingered like smoke. Who was making the statement? And what were they saying?

Malta is a bony and barren place. The staples required for human existence – water, food, gasoline – are imported from Italy. It is only five times the size of Manhattan, yet the island is of great strategic significance. Lying equidistant from Europe and Africa, it buttons up the collar of the Mediterranean and has been contested since Roman times. Most Maltese can trace their roots back to 90 medieval families with surnames such as Borg (“pile of rocks”) and Farrugia (“feeder of chickens”) that testify to their hardscrabble fight for survival. They speak a knotty strain of Arabic that is the only Semitic language to use Latin characters, and they pride themselves on both their talent for commerce and their history of doughty resistance. The entire island was awarded the George Cross for its resistance against Nazi Germany in the second world war.

This history means that Malta can feel strangely cut off even though it acts as a lodestar to migrants from three continents. The last two decades have seen an unprecedented building boom. Nearly a third of the island is covered with hotels, apartment buildings and warehouses. The north coast has become a near-uninterrupted cliff face of cement and steel, veined with a labyrinth of streets that are packed with cars spewing fumes. Each month, just over 1,000 documented incomers arrive on the island to work in a constellation of boutique industries. From Scandinavia come the administrators of hundreds of internet gambling companies. From the Baltics come the programmers who service the ever-expanding offering of cryptocurrencies. Bulgarians, Romanians and Serbs man the building sites from which new skyscrapers arise. Maids are trafficked from the Philippines. The island offers relief for those in need of a safe haven. Yasser Arafat’s widow lives in downtown Valletta and a brood of former Libyan strongmen hunker down west of the capital. Malta attracts more indigent migrants too. On the other side of the harbour in Valletta, where cruise ships disgorge thousands of fleshy tourists each day, stand the shabby fishing villages of Marsa and Paola, now filled with Eritreans, Yeminis and Sudanese, most of whom were smuggled into the country by dinghy.

Malta is also a financial borderland. In the cobbled alleyways of Valletta, firms of accountants and lawyers have established themselves where the medieval guilds once stood. They specialise in setting up companies. Malta has around 77,000 registered businesses – one for every six citizens (Germany, by contrast, has one business for every 26 citizens). These companies rarely have any presence on the island beyond a nominal address that gives them access to some of the most favourable tax rates in the European Union.

The crucial thing to understand about Malta today is that, until recently, it was not regarded as an offshore financial centre like Cyprus or the British Virgin Islands. Such jurisdictions employ a combination of low taxes and banking secrecy to make themselves attractive destinations for capital. They develop banking sectors vastly out of proportion to the size of their populations. Malta was different: money rarely stayed on the island. In 1996, the government passed an exemption that allowed companies to receive an 85% rebate on corporation tax, which was set at 35%. This effectively set the tax at 5%. Each year, €2bn is returned to companies through rebates. But since the country’s financial-services industry remained small and similar tax benefits did not accrue to personal wealth, Malta served as a conduit rather than a destination for capital. Maltese banks had a reputation for being discerning about whom they took money from.

The size of Malta’s bank assets had grown steadily during the 1990s and 2000s. But this prudence kept the country insulated from the contagion that seized other offshore centres during the financial crisis of 2008. It was precisely this stability that made the country a sanctuary for cash flights, particularly from Cyprus. At its peak in 2010, the ratio of bank assets to GDP in Malta stood at 760% (in Europe, only Luxembourg had a bigger ratio). The overthrow of Colonel Qaddafi in 2011 saw more money hotfoot it across the Mediterranean. At one stage, the Qaddafi family had more than €90m accruing interest in the Bank of Valletta; other Libyan grandees store their wealth in Malta’s real-estate market. In the last six years, the island has attracted money from north Africa, Central Asia and other European financial centres. “The problem with having opened the door to even small amounts of dirty money is that it can scare off the clean money,” said David Borg-Carbott, a senior financial associate with Ganado Associates, a law firm in Valletta. “A place like Malta is forced to compensate for that loss by bringing in more and more dirty money.”

It was against this background of rapid financialisation that the Running Commentary blog gained its devoted following. After two decades as a pugnacious columnist for the Malta Independent, Caruana Galizia set up the blog – which she would refer to as her “notebook” – in 2008, the same year as the crash, as a repository for gossip which the newspaper found too hot to handle. It would soon grow into the only media outlet on Malta that earnestly probed the entanglement of politics and finance.

To outsiders, Running Commentary appears to be blatantly partisan. This reflects Malta’s polarised political scene as much as Caruana Galizia’s character. The country is divided between two political parties – the Labour Party and the Nationalist Party. Traditionally Labour was a left-wing working-class party that had driven through independence; the Nationalist Party represented the island’s Anglophile aristocracy (its advocates can often be identified by their double-barrelled surnames). Both of them are supported by newspapers that volley allegations of fraud and corruption back and forth. And each has an extensive patronage network that awards everything from public jobs to construction licences.

Caruana Galizia was not an instinctive Nationalist. But she despised the Labour Party. She was born in 1964, the year that Malta achieved independence from Britain, and her political conscience was awakened at the age of 18 when she was jailed for protesting against the closure of church schools by Don Mintoff, the Labour prime minister who ruled the island from 1971 to 1984. Mintoff remains a controversial figure on Malta. He ushered in national sovereignty and an emergent middle class, but the end of his term in office was marred by outbreaks of violence. “We had absolutely no idea what it meant to live in Western democracy because we had not grown up in one,” Caruana Galizia later reflected. The fragility of Maltese democracy was a refrain in her writing. She worried about the return of “amoral familism” and “Third World behaviour”. In office for most of the 1990s and 2000s, the Nationalist Party had overseen economic growth and the country’s accession to the European Union. Caruana Galizia believed that the Labour Party, which returned to power in 2013, would reverse this progress.

Caruana Galizia’s overt partisanship meant that half the island was already disposed to doubt her claims. Her tone did nothing to conciliate them. A blog called The Unofficial Daphne Caruana Galizia Insultometer attempted to compile a complete list of the people she insulted. “Can one columnist set a Guinness World Record?” it asked. “Help us start counting.” Running Commentary was hyperbolic and excoriating. It portrayed Malta as an embarrassment – an inconsequential rock, more corrupt than Italy, that deserved its fate. Caruana Galizia was elitist. Her blog was written in English, a language that many lower-class Maltese cannot read. She had little interest in public policy or factional dynamics, preferring to moralise about the lives of politicians. Even when she drew back the veil on the finance industry, she rarely reflected on why Malta attracted so much money.

Caruana Galizia was obsessed with appearances. She pulled people up on their posture. She commented on their clothes. She was intrigued by sexual preferences (a former head of the Nationalist Party told me that Caruana Galizia had called him unannounced one morning to ask whether he was gay). Her nose for investigations seems to have been a haphazard offshoot of her tabloid temperament.

The most widespread accusation hurled against Caruana Galizia was that she was not, in fact, a journalist. In the words of one politician, she was merely a “woman with a keyboard”. John Dalli, a former EU commissioner for health and consumer policy, was regularly derided by Running Commentary. When I asked him about Caruana Galizia, he emailed me a 108-page monograph entitled “Daphne the Pervert Blogger”, which he is currently preparing for publication. “Daphne was nothing but a perverted, sadistic, vindictive and greedy person,” he said. Her style was off-putting even for many of her supporters. One of her readers, a schoolteacher in St Paul’s Bay, told me that it should have been enough for Caruana Galizia to demonstrate that a politician was a thief, without calling him one outright.

Yet Caruana Galizia also possessed remarkable strengths as a reporter. She cultivated an astonishing array of sources and gleaned information from them over the course of years. There was a property manager in Gzira, a bartender in Paceville (the epicentre of Malta’s party scene), an aide to a former prime minister, two former heads of the Nationalist Party, a shopkeeper in Valletta: all of these people had not only passed Caruana Galizia crucial nuggets of information, they also spoke proudly of their role in expanding her understanding of Malta. They described her as a careful listener and a gracious, almost maternal confidante. Despite her gossipy manner, she double sourced all her stories before publishing them. And she was a collaborative international journalist who worked with colleagues from Argentina to Greece to Azerbaijan to understand how money flowed into Malta.

Her eye for the superficial also proved to be a journalistic asset, as she teased stories out of details that few other reporters would linger over. On one occasion, she spotted a politician’s wife wearing a fur coat in a photograph posted on social media. So she scoured the high-end boutiques on the island to find the coat in question, photographed the price tag and then mused aloud about the disparity between the cost and the couple’s reported income. A number of times a glimpse of a holiday snap or a house spurred deeper investigations.

Caruana Galizia’s investigations ranged wider after the Labour Party victory in 2013. Previously she had been an acerbic commentator on Maltese politics. Now she styled herself as the unofficial opposition. Foremost among the people ranged against her was Joseph Muscat, the new prime minister. Muscat, the son of a fireworks magnate, was himself a former journalist. Young, charming and rhetorically gifted, he stood in contrast to the silver-haired career politicians who had historically run the country. Caruana Galizia referred to him as “Metrosexual 1” on account of his penchant for open-necked shirts (“As for those brown shoes – oh God. Oh God. Oh God again”).

The political stage, Joseph Muscat. Image by The British Foreign and Commonwealth Office. Britain, 2014. (CC by 2.0).
The political stage, Joseph Muscat. Image by The British Foreign and Commonwealth Office. Britain, 2014. (CC by 2.0).

On the campaign trail, Muscat had vowed to run Malta like a business. Caruana Galizia grew convinced that he planned to run it as a family firm. Her suspicions were aroused in early 2014 when, with little advance notice, the government signed a number of agreements that opened up Malta to investment from the autocratic state of Azerbaijan. In December that year, two government functionaries signed a deal in Baku to pump Azeri gas to a new power station on the island – an arrangement that meant Malta bought energy at almost double the rate found on the open market. Over the next four years, Caruana Galizia would relentlessly track the invisible influx of money into the country.

In April 2016, she gained access to the Panama Papers a month before they were published, thanks to her son Matthew, a journalist with the International Consortium of Investigative Journalists. Among revelations of torrents of cash sluicing around the globe, she broke the story that Konrad Mizzi, minister of energy and health, had been the beneficiary of shares in an offshore company in Panama.

Caruana Galizia knew that money was coming into Malta. She knew that it was being moved out of the country into tax havens. But she didn’t yet know how these flows were connected. Her investigations led her to a cream-coloured building across a bay from the old town of Valletta called Whitehall Mansions. From its roof flies the British flag, for the building houses the British High Commission as well as a number of other embassies.

In January 2014 a new tenant moved in. Ali Sadr Hasheminejad was a 33-year-old Iranian in possession of four passports. According to the American authorities, he spent his late 20s routing money from Venezuela to Iran via companies in Switzerland and Turkey in order to evade sanctions. He and his father, a prominent Iranian banker, were under investigation by the FBI when they were granted a licence by Malta’s financial authorities to set up a new boutique bank called Pilatus. Pilatus hired a dozen employees. Some had no background in banking. Arienne Gaerty, an executive-search consultant, had previously worked as an opera singer. Others had been picked off the very oversight bodies that were supposed to be regulating the bank’s activities.

In February 2017, Caruana Galizia began to have meetings with a new source who had direct knowledge of the bank’s inner workings: Maria Efimova, a former Pilatus executive assistant. She told Caruana Galizia that she had become suspicious because, she claimed, her superiors nonchalantly encouraged her to forge clients’ signatures and insisted on their close ties to the Maltese government. One afternoon, as a compliance officer paid a visit to Pilatus’s executives, Efimova surreptitiously entered the bank’s kitchen where the safe was kept, opened it and scanned the documents she found inside. “Daphne was the only one writing critically about the Pilatus Bank,” Efimova told me. “It was not that she was the natural journalist for me to approach with what I had found. She was the only one.”

Efimova was a trove of information. According to Caruana Galizia, the documents showed that much of Pilatus’s capital came from four leading members of the Azeri regime including Leyla Aliyeva, daughter of Ilham Aliyev, the president. There were accounts in the names of a number of leading Labour party figures, including Michelle Muscat, wife of the prime minister. One document caused everything to snap into place in Caruana Galizia’s mind: it purported to show a series of transactions that sent $1m from an account belonging to Aliyeva, via Dubai, to a Panamanian company called Egrant. Efimova presented Caruana Galizia with evidence that the beneficiary of this company was none other than Michelle Muscat.

On April 20th 2017, Caruana Galizia published her claims. Within hours, Hasheminejad had landed in Malta. Upon disembarking, he made straight for the Pilatus Bank as night fell, carrying a large, brown briefcase and a black computer bag. Noticing that lights in the bank had been turned on, reporters began to gather on the steps of Whitehall Mansions. Caruana Galizia observed the scene live on TV. When Hasheminejad emerged, reporters badgered him with questions. What was he doing? What was in the suitcase? Hasheminejad remained silent – not out of reticence, Caruana Galizia remarked to a relative, but because he clearly could not understand Maltese. As these events were unfolding, the police chief refused to abandon his dinner of fried rabbit to secure the premises. (1843 approached him, the Aliyevs and Hasheminejad for comment but received no reply.) There was palpable outrage. The leader of the opposition called for the prime minister’s resignation and protests were held in the streets. Joseph Muscat said that neither he nor any members of his family were beneficiaries of bank accounts and companies outside of Malta. He immediately established an inquiry into his wife’s financial affairs led by a magistrate, promising to resign if anything untoward was found. And he defiantly called a general election.

Though Caruana Galizia’s revelations gripped the country, her popularity plummeted. Those who had never trusted her believed that her hatred of the Labour Party was the result of patrician disdain. Even among her allies, it became clear that the tenor of her writing was alienating supporters. “Before 2017, she had the support of one in two Maltese,” said Caroline Muscat, a journalist with Shift News (and no relation to the president). “Now it became closer to one in four.” Joseph Muscat won the snap election with a greater majority than he previously held. In a pointed riposte to Caruana Galizia, a group of Labour supporters celebrated victory on the steps of the Pilatus Bank. Caruana Galizia had herself been briefly arrested for publishing political commentary on the day before the election.

Caruana Galizia was feeling the strain. It became increasingly difficult to go out in public. She was photographed when she went to a café and jeered at in the street. Shortly after the election, a man blocked the exit ramp of a car park as she attempted to leave when he spotted her behind the wheel. “They have made me into what in effect is a national scapegoat,” she said. In its last three months of publication, Running Commentary became more frothing and bombastic in tone. Politicians were rarely mentioned by name; they were simply referred to as “those crooks”. She rattled off attack after attack on Adrian Delia, the new leader of the Nationalist Party, whom she believed to be as corrupt as Labour politicians. She despaired of Malta ever being redeemed. “I advise young people to leave Malta if they can before it is too late. You do not need to live like this,” she wrote.

Around four months after Muscat’s re-election, Caruana Galizia asked for police protection after receiving a series of threatening phone calls. None was given. She had asked for protection on a number of occasions before, yet it seems unlikely she genuinely wanted members of a police force she distrusted shadowing her every move. The request may have been just another attempt to needle her enemies. At the beginning of October, according to a reconstruction of events made by the police, a small white car began to trail her as she wandered around Bidnija. When she was at home, it took up a position 200 metres west of her house. The driver smoked as he observed Caruana Galizia, tossing his cigarette butts out of the window. He improvised a toilet in a nearby bush and dismantled a section of wall in order to get a clearer view. Whenever she left the house, the driver reported her movements to the person who had hired him.

On the night of October 15th 2017, a man leapt over the low perimeter wall encircling Caruana Galizia’s house and stashed a bomb under her car. Twelve hours later, three men took up their positions. Two of them stood on a hill overlooking her home. Just before 3pm, they saw her leave the house and get into the car. She had just uploaded what would be her last blogpost: “There are crooks everywhere you look now. The situation is desperate.” Using a burner phone, one of the spotters alerted another conspirator who was sitting in a motorboat several miles off the coast. Foolishly, he was still in range of a cell tower that he had gone out to sea purposely to avoid. Even more foolishly, he used his personal phone to top up his burner with €5 of credit, rendering his precautions useless. The next call was to the phone that detonated the explosives under Caruana Galizia’s car. The explosion left behind a crater two metres wide. “Open a bottle of wine for me, baby,” texted the killer to his girlfriend after the job had been completed.

The government offered its condolences to Caruana Galizia’s family in the immediate aftermath of the murder. An adviser to Lawrence Gonzi, Malta’s former prime minister, told me that Muscat had looked genuinely distraught the day after the death. Eight days later he was in Dubai insisting to an audience of oil princelings that Malta remained “open for business”. The Pilatus Bank immediately attempted to roll back Caruana Galizia’s work, threatening lawsuits against anyone who repeated her allegations. The press quoted anonymous sources that suggested the killer was Maria Efimova, the Pilatus whistleblower. Efimova fled to a village in Crete, fearing for her own life.

Arrests were made six weeks later. In the grubby port of Marsa, 15km south-east of Bidnija, ten men were apprehended in a vegetable warehouse in an operation that involved police, the army and the security services. The authorities had been tipped off by the Italian secret services and an FBI team that happened to be conducting cell-tower triangulation exercises in the Mediterranean at the time of the killing. Three of the men remain in custody: Alfred DeGiorgio and Vincent Muscat (again, no relation), accused of being the men on the hill, and George DeGiorgio, accused of being the person on the motorboat.

These three men could not be further from the worlds of finance and politics that Caruana Galizia investigated. Vincent Muscat and Alfred DeGiorgio have previously been charged, though never convicted, of armed robbery. The Maltese press has reported that they are involved in oil smuggling. Two intriguing facts have emerged from the court case. First, George DeGiorgio’s mobile phone was being monitored in the weeks leading up to Caruana Galizia’s murder and those following it. Yet the same authorities that have charged him with murder appear to have been oblivious to the plot. Second, the accused seemed to have been tipped off. They tossed their phones into the sea. “You knew we were coming,” a police officer was recorded asking them in the interrogation room. “Who told you we were coming?”

Government-supporting newspapers suggested that Caruana Galizia was killed by a Semtex bomb shipped in from Libya, in order to thwart her investigations into oil smuggling. They linked the murder to other recent car bombs on the island. Yet the bomb that killed Caruana Galizia was different. For a start, it was made from TNT, a substance readily available in the dozens of fireworks yards across the island. Out of the 20,000 articles Caruana Galizia wrote, she speculated about oil smuggling in only a handful. And she never mentioned the arrested men once. It has also been suggested that Caruana Galizia was killed pre-emptively: for a story she was about to write rather than one she had written. But a relative told me that, at the time of her death, she was investigating the same subjects as she had covered previously.

As time goes by, contempt for Caruana Galizia in the political class has re-emerged. “The situation is desperate. There are happy people everywhere you look,” tweeted Jason Micallef, chairman of Valletta Capital of Culture, parodying Caruana Galizia’s final blogpost. Her sons, who have also fled Malta, have been told on Twitter that they deserve to have been blown up with her. Others have suggested that, since they have refused to hand over Caruana Galizia’s laptop to Maltese investigators, they must have been involved in her murder and are trying to conceal evidence.

The few civil-society groups that have attempted to honour Caruana Galizia have been rounded on. Photographers from pro-government newspapers aggressively snap attendees at vigils in her memory. The monument to Malta’s victory over the Ottomans in 1565 has been turned into a memorial to Caruana Galizia and a symbol of defiance to her murderers. It is ravaged by vandals on an almost weekly basis. “Clearing this memorial will not cleanse your shame!” read the posters, surrounded by flowers and large framed headshots of Caruana Galizia.

On the evening I arrived on the island, four months to the day after the murder, several activist groups had erected a handful of red billboards on the side of main roads, in imitation of the strategy involved in the film “Three Billboards outside Ebbing, Missouri”. “A Country Robbed. No Justice”, read one; “A Journalist Killed. No Justice”, read another. The state planning authority ordered that they be taken down within hours, at the very moment that Caruana Galizia’s family and supporters were conducting a vigil for her in downtown Valletta. Caruana Galizia’s sources have gone silent. Journalists who have carried on her investigations are routinely subjected to cyber-attacks. One of them, Manuel Delia, told me that he has installed security cameras around his yard and will only work from home.

The government says that justice will be served with the plea deal that they have offered Muscat and the DeGiorgios. But it is unlikely we will learn who put out the contract on Caruana Galizia’s life. Relaying money and orders through an intermediary – possibly a number of them – the mastermind sits at a credible distance from the blast. Those charged with pushing the button are not co-operating. At preliminary proceedings the trio refused even to confirm their names to the judge. Whatever the outcome, there will be dissatisfaction. A heavily politicised judiciary and police force is now expected to investigate the murder of a woman who repeatedly accused the government of being crooks.

The lesson from Malta is not that journalists can be killed in tranquil places. This has always been the case. But, as Nicholas Shaxson, author of “Treasure Islands”, a book about tax avoidance, told me: “When a tiny country has turned so heavily dependent on a financial sector that has itself become so vast, and when the checks and balances of a normal democracy were never quite there to begin with, it does not take much for the rule of law to be entirely swept away.”

Caruana Galizia’s story took another twist in July 2018. At an expectant press conference, Muscat, the prime minister, unveiled the results of the 15-month-long independent inquiry into the allegations regarding his wife’s offshore holdings. Visibly joyful, he declared that the inquiry had found no connection between Michelle Muscat and the Panamanian account that Caruana Galizia had attributed to her. Muscat did not mention Caruana Galizia by name. The implication was that she was misinformed, misled or, at worst, lying.

Caruana Galizia’s supporters now worry that her legacy risks complete dismemberment. Though the inquiry was narrowly focused on only one of Caruana Galizia’s allegations, doubt has been cast over her entire body of work. Meanwhile her detractors believe that the inquiry proves what they had suspected all along: that her personal grievances and politicised scorn contaminated her objectivity as a reporter.

Whatever the truth, the murder of Caruana Galizia has drawn international attention to Malta like no other event in its recent history. It forced the Maltese to confront the question of what sort of polity their country ought to be. And it has taken the assassination of a journalist for outsiders to scratch the patina of Malta’s prosperity and see what lies beneath.


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