A court has turned down an appeal by the Attorney General against five serving and former local council officials together with a travel agency manager, confirming their acquittal over alleged fraudulent refunds on flight expenses.
Paul Cortis, general manager at KD Travel Services Limited, Oreste Alessandro, former executive secretary of the Local Councils Association, Dolores Borg, former Birkirkara mayor, Noel Formosa, mayor of San Lawrenz, Claudette Abela Baldacchino, former Qrendi vice-mayor and Michael Cohen, former president of the Local Councils Association were charged with complicity in the fraudulent racket dating back to 2010.
They were also charged with misappropriation to the detriment of the European Commission and the government of Malta, complicity in making a false declaration in a public document and committing an offence as public officials.
All protested their innocence from the start.
It all began in 2007 when the EU's Committee of Regions flagged potential irregularities by Maltese delegates travelling on EU-related trips when claiming refunds for flight tickets.
Those suspicions triggered an investigation by OLAF, the EU anti-fraud agency. with officials from that agency travelling to Malta to carry out spot checks at the Sliema offices of the travel agency and at the Association’s offices where a number of documents were seized.
Investigations resulted in criminal charges against a number of public officials together with the representative of the travel agency.
Three years ago, all six defendants-together with former Mellieha mayor Guzeppi Borg who has since passed away - were cleared of all criminal wrongdoing by a Magistrates’ Court.
But the AG appealed, arguing that the defendants knew that the invoices presented for reimbursement of the expenses did not give the amounts actually paid.
The tickets were issued at a discount by the travel agent but the Local Councils Association claimed a refund of the full amount they were entitled to.
The difference was funnelled to the association when the Committee of the Regions refunded the full price for the flexible business class tickets each official was entitled to.
Suspicions arose over the too-frequent invoices for flight tickets which all claimed the same amount, as though there was some fixed price.
However, the former president of the Maltese delegation, lawyer Ian Micallef testified that the refunds were taken by the association to help it cope with the additional expenses of covering overseas meetings and events which increased when Malta became an EU member.
Funds allocated by the government of the day were not sufficient to meet those expenses and so the association sought to maximize its income to be in a better position to fulfil its work duties.
This was a typical Malta example of “getting the best out of a situation,” remarked Mr Justice Aaron Bugeja when delivering judgment at appeal stage.
Micallef had even sought advice from a professional auditor about how to handle such discounts and refunds on flight tickets, the court heard.
The association acted upon that advice, operating the scheme “in broad daylight,” always safe in the knowledge that they were not doing anything illegal.
A second advice was sought by the Auditor General from a well-known auditing firm and again, no one flagged any irregularity in the way discounts and refunds were being managed.
Not even when the bills were tabled in Parliament was any irregularity flagged. There was only “praise for the local councils association’s work,” observed the judge.
The handwritten invoices with the full amounts were submitted along with the boarding passes showing the discounted prices to the Committee of the Regions. No irregularity was flagged at that stage either.
All was done above board and those involved relied on the professional advice which they had no reason to doubt.
All defendants believed that they were not doing anything illegal.
When all was considered, the court turned down the appeals and confirmed the acquittals in respect of all six defendants.