Alex Borg demands public inquiry into Fortina land transfer scandal

Updated with PN, PN statements

Opposition leader Alex Borg on Monday demanded a public inquiry and a police investigation into shortcomings found by the Auditor General in the transfer of public land to the Fortina Hotel.

Borg spoke in an urgent parliamentary debate demanded by the Opposition. The Speaker had originally declined the request for the debate, saying it was not urgent in terms of standing orders.

However, government whip Naomi Cachia, who earlier also said the debate was not urgent, said the government had agreed to an immediate debate.  

The new opposition leader observed that the Auditor General had found that public land was undervalued when it was transferred to the Fortina and information had even been hidden from parliament.

A public inquiry should be held into all these shortcomings and the police commissioner should conduct the necessary investigation. This case demanded the need for accountability and transparency, he insisted.  

Public land should be enjoyed by the people, and when it is handed over, it should be transferred after proper valuation in the national interest. 

Government has made major changes since case, minister says

Culture and Lands Minister Owen Bonnici said this was the first report he could remember where the Auditor General had scrutinised the operations of the Lands Authority. 

It was the present government which set up the Lands Authority, to keep land transfers at arm's length from the politicians. Therefore, what was being scrutinised were the operations of public officers, not the government itself. The report clearly showed that politicians were misled.

Bonnici said he was disappointed by the way matters at the Lands Authroity had been handled, according to the report, but it was wrong to blame everyone at the Lands Authority for what had happened. 

Furthermore, major reforms had been made since this case took place. Among them, a new chairperson and a new CEO had been appointed at the Lands Authority. They, in turn, had carried out major changes in the operations of the Authority, including a more robust method of property valuations, handled by a specially-appointed committee. There were also checks by the authority's auditor and its governors, ensuring there were various levels of scrutiny.

In 2024 and this year, various legal notices were issued on the method of revocation of conditions in property transfer deals in case of sales. 

"Following the facts as explained in the auditor's report, the government made many changes, and it is determined to make further changes to further improve the operations of the Lands Authority," Bonnici said.

As for a police investigation, Bonnici noted that 'the Opposition's friend' Jason Azzopardi had already filed a police report. So what the opposition wanted was already being done. 

Furthermore, the issue could also come up before the relevant parliamentary committee.

There was no doubt that there were lessons to be learnt, Bonnici said, but he was also confident that the committee would also find that the reforms already made had addressed the need for objectivity in property valuations.

The government 'cannot shirk responsibility'

Opposition shadow minister Darran Carabott said it was dangerous for a government minister to argue that it was public officials, not the government, who were being blamed for this case. By that measure, the government would be created authorities to shirk responsibility.

The government had a duty to safeguard the national interest, including public land.

While minister Bonnici had sought to shift the blame from the government to public officials, the auditor himself said it was the duty of the government to ensure there was value for money from this deal.

And the deal could only advance after a resolution was moved in parliament by a minister, who therefore assumed responsibility for it.

Six years ago in parliament, the Opposition was already raising questions about the valuation of this property. 

And now the Auditor General had declared that the value realised by the government was "significantly lower" than established by the experts.

Opposition MP Adrian Delia said it was unbelievable how Bonnici had almost implied that the government should be happy with its actions since this case developed, while avoiding the case itself. 

Delia explained how the property had initially been handed to the Fortina for a particular purpose, which was then changed with the government's consent. The crux of the issue was the immense discrepancy in the valuation of the change, from the €21 million calculated by the experts, to the €8.1 million that were actually paid.

And it was also found that there was fraud - with documents having been hidden so that the decisions which were taken were contrary to the public good and proper governance. 

"The whole process was vitiated from the very beginning when documents were hidden," Delia said.

The Board of Governors had failed in their duties, and the government's ministers were equally responsible because the Lands Authority was a government entity. Would they shoulder their political responsibility? 

In a parallel case, Delia, pointed out, when documents were hidden and a process was vitiated - the Vitals case - the whole process was nullified.  

Other speakers in the debate were Ramona Attard (PL), who spoke about under-valued property transfers when the PN was in government and reforms made since by the present government, and Rebekah Borg (PN), who asked what was to become of the funds stolen from the Maltese people by this property deal. She said proper reform was needed into how property valuations were made.

Claudette Buttigieg (PN) said €16 million had been stolen from the people. And the Auditor-General had said his biggest concern was that the valuation was kept by the chairman (of the Housing Authority to the detriment of the public interest and in an anomalous manner the payment to the audit company was authorised by the chief of staff of the prime minister.

Alex Muscat (PL) a former board member of the authority, observed that it was being alleged that a valuation report was sent to the chairman of the Lands Department but not passed on to the board and the government. The board therefore worked on the information available to it, another valuation, made by Deloitte, estimated at €2.7 million. No one interfered in the work of the board. 

But it was worth noting that under the former PN government, no payment was demanded when conditions were changed in property transfer deals.

Nationalist MP Beppe Fenech Adami said the Opposition, yet again, was being proved right, as it was when it spoke about corruption in the issue of passports, the Vitals case, Electrogas and so many other scandals.

So much could have been done with the €16 million stolen in this case. And the least the government could do now was to apologise. 

Winding up, Deputy Prime Minister Ian Borg recalled how the government years ago replaced the Lands Department by an autonomous Lands Authority which was 'at arm's length'. The role of politicians was only to bring the work of the authority to parliament. 

"We never interfered", Borg said. 

In this case, the decisions were taken on the basis of the recommendation of the chair of the Lands Authority and available information. It was the auditor-general who said that the chairman kept a valuation report hidden.  And it was the chairman himself who wrote the resolution presented to parliament. Concluding Borg said one could see what lessons could be learnt to improve the operations of the Lands Authority.

'Yet more theft' - PN

Meanwhile, the Nationalist Party in a statement accused the Labour government of “yet another theft” of public money, following the publication of the damning report.

The report confirms that the government transferred public land in Sliema for a price far below its real value, behind everyone’s back and in clear breach of good governance, the PN said in a statement.

The PN insisted that the findings vindicated its opposition to the deal when it was first brought to parliament in 2019.

Opposition leader Alex Borg told parliament that the case struck at the heart of public trust.

“While Robert Abela’s government often speaks about transparency, accountability, and good governance, it is evident that what it says in words it contradicts in deeds. While you are paying through the nose to buy your first property, the government has no qualms about giving away our land for a third of its value to its inner circle – millions stolen from each and every one of us.”

Labour – ‘More of the same’

But the Labour Party dismissed Borg’s intervention as a disruption and a continuation of the PN’s past.

“The fifth leader of the PN in 12 years will continue with the tradition of those who came before him,” the party said in its statement.

“Alex Borg had also not finished his first intervention as Leader of the Opposition, and disrupted the first parliamentary session after the summer break in which an important reform on road safety was to be discussed.”

Labour insisted that the government was open to debate, but added: “Alex Borg will continue following the footsteps of Bernard Grech. He’s more of the same!”

'Scandalous' - Momentum

Momentum chairperson Arnold Cassola described the findings of the National Audit Office report into land concessions to the Fortina Group as “scandalous,” saying they confirm long-held suspicions of irregular political manoeuvres.

Cassola recalled that over four years ago, he had requested an NAO investigation into whether the evaluation process was transparent, whether good value for money was obtained, and whether the public interest had been safeguarded.

“The NAO has now confirmed that my information was correct,” Cassola said.

Cassola also expressed outrage at the political involvement of former Prime Minister Joseph Muscat and his Chief of Staff, Keith Schembri, in the Fortina dealings.

“It is scandalous that Muscat himself got involved in talks to speed up Fortina’s interests, and that Schembri convened meetings he had no authority to attend. Muscat and Schembri should be investigated for their manoeuvres to favour Fortina, whose owner is a major PL donor,” Cassola declared.