A company secretly backed by Keith Schembri was handed €400,000 in government contracts by Konrad Mizzi’s health ministry, fuelling suspicions of corruption.

Government money began to flow just three weeks after the company, Impaqt Limited, was registered in May 2014.

A year later, Impaqt paid €193,000 to two companies owned by Schembri, raising suspicions that the payments could be kickbacks in return for the government contracts.

Schembri, who is currently facing criminal charges related to bribery and money laundering, served as the all-powerful chief of staff to then-prime minister Joseph Muscat throughout the period.

He has long faced accusations, which he denies, of using his time in government to further his business interests.

Police were handed details of the suspected scheme in March 2021, following a wider magisterial inquiry into Schembri’s business empire.

The direct orders, for consultancy and project management services, continued to flow to Impaqt, albeit at a slower rate, even after Mizzi was removed from the health portfolio after the Panama Papers scandal.

A freedom of information request shows how by the end of 2019, Impaqt had received a further €270,000 worth of contracts from the health ministry, under Chris Fearne, taking the total up to €670,000. 

The health ministry contracts accounted for just under half of Impaqt’s entire revenues between 2014 and 2020.

Kasco Engineering funded Impaqt

Impaqt’s registered shareholder and director is Alan Comerford, a British national who, according to his lawyer, moved to Malta in 2012.

Although Schembri had no visible link to Impaqt, documents reviewed by Times of Malta reveal his fingerprints all over the company.

The €1,200 share capital used to set up Impaqt was paid via a cheque issued by Kasco Engineering in April 2014, documents reviewed by Times of Malta indicate.

Financial crime experts questioned why it was Kasco Engineering, rather than Impaqt’s shareholder Comerford, who paid the modest initial share capital.

Kasco Engineering is co-owned by Schembri and his business partner Malcolm Scerri.

Further suspicions about Schembri’s potential hidden role were raised after investigators discovered how Kasco’s financial controller Robert Zammit had direct access to Impaqt’s HSBC account and was able to execute transactions.

Scerri was a co-signatory to the same account, documents indicate.

Payments to Schembri 

By the end of 2015, after just a year-and-half of operation, Impaqt had netted over €400,000 worth of contracts from the Health Ministry, split across 10 contracts.

That same year, payments started to flow from Impaqt to companies owned by Schembri.

In April 2015, Schembri’s Kasco Engineering received a €93,000 payment from Impaqt, marked as being for “loan+purchases”.

No traces of the initial “loan” between Impaqt and Kasco Engineering was found by financial experts, fuelling suspicions about the reason for the payment. 

The payment to Kasco Engineering came three months after Impaqt was awarded a €234,000 contract by Mizzi’s ministry for consultancy services and project management services.

Schembri is already facing money-laundering charges for a suspected fake loan between himself and Nexia BT’s managing director Brian Tonna.

The fake loan is suspected to have been used to justify a €100,000 “kickback” on passport sales passed on to Schembri by Tonna. Both men deny the charges.

Impaqt used to operate from the same building as Nexia BT, the now-defunct audit and advisory firm used by Schembri and Mizzi to establish secret companies in Panama.

The company shifted to another address just before the Panama Papers scandal broke in 2016 and ditched Nexia BT as its auditors a year later.

Schembri and Mizzi resigned from government in November 2019 under a cloud of corruption claims.

An ‘inappropriate’ payment

Potentially suspicious payments by Impaqt to a design company co-owned by Schembri and his wife Josette  – 3City Designs – were also flagged to the police.

The interior design company received €100,000 worth of payments from Impaqt in 2015, marked as being payments for furniture and office improvements^.

All the payments to 3City Designs were made in round-figure amounts. The first payment, amounting to €20,000, was made in February 2015.

Further payments of €5,000, €10,000, €5,000, €30,000, €10,000, €10,000 and €10,000 were made through the same year.

Investigators have questioned why a small start-up company would spend such a large amount on office furniture, interior design and refurbishments.

Schembri Vella and 3CityDesign were charged with money laundering in September 2021.

A document obtained by Times of Malta indicates there was friction between Comerford and Kasco’s financial controller Robert Zammit over one particular payment to 3City Designs.

In the August 2015 letter, Comerford accused Zammit of having used his access to Impaqt’s accounts to carry out an “inappropriate transaction” to 3CityDesign, which is described as a “creditor” in the letter.

Comerford warned Zammit that the transaction was carried out without his prior approval.

“It is the opinion of the directors that in accordance with the Accountancy Profession Act there has been a breach of professional duty.

“Kindly note, that the execution of any future creditor transaction should not be implemented without prior approval from the directors of Impaqt Ltd,” the letter warns Zammit.

A little help from Kasco

Contacted for comment, Comerford’s lawyer strongly objected to any suggestion that the payments to Schembri’s companies by Impaqt were a form of kickback.

Explaining the nature of the relationship, the lawyer said Comerford first met Kasco Engineering CEO’s Malcom Scerri while working for a multinational company out of Malta.

Scerri introduced Comerford to legal and financial practitioners to help him set up Impaqt, the lawyer said.

“Being a very small operation, not employing secretarial or accounts staff, considering also that most initial work assignments that Impaqt obtained, through Mr Comerford’s labour, saw Impaqt working closely with Kasco Engineering Group.

“This latter company, for the initial stages, assisted our client in this manner,” Comerford’s lawyer said.

The lawyer said Impaqt’s "loan" payment to Kasco Engineering was for the initial share capital that Kasco gave Comerford.

All other payments to Kasco Engineering were in connection with costs incurred during the setting up of Impaqt’s new offices at Smart City, the lawyer said.

 “Allow me to remind you that these offices were in shell form and works that Kasco Engineering had to undertake related to all mechanical, electrical, plumbing services, data and IT services, finishing works and gypsum works.

“Design of these offices and relative furniture were all handled by and bought by 3City Designs Limited.

“All transactions are duly invoiced, accounted and paid and clearly declared according to law in the company’s audited accounts. All said acquisitions are still physically available for inspection.

“My client strongly denies any and all allusion of impropriety, in all its form, with anyone,” Comerford’s lawyer said.

When contacted, Konrad Mizzi said he could not comment on the contracts awarded to Impaqt or Comerford, “since I have no access to procurement details”.

“However, it is my understanding that civil servants at the Ministry of Health would have followed due process for such contracts and ascertained that the work was duly carried out.

“My role as health minister ended in April of 2016, and I understand that Mr Comerford was given direct orders for many years by the ministry of health under the tenure of my successor.

“I have no knowledge of any matter relating to Kasco Engineering, or of any connection between Mr Schembri and Impaqt. Any attempt to link me to any suspicion of wrongdoing in this context is absurd,” Mizzi said.

Keith Schembri, Malcolm Scerri and Robert Zammit did not respond to a request for comment.

When contacted, ex-health minister Chris Fearne said he is not aware of any investigations into Impaqt or Comerford, nor was he aware of any wrongdoing.

“Had it been the case, as I have always done throughout my political career, I would have immediately reported them to the Police Commissioner without fear or favour.

“Furthermore, at no point in time did I give any instructions to, nor were any approvals sought from me, by the FMS board in regard to Impaqt Ltd or Alan Comerford,” Fearne said.

A spokesman for the police declined to comment.

Who is Alan Comerford?

Comeford’s lawyer says his client, a project management consultant, is “a noted specialist in the field, with over 30 years’ experience”.

His ties to Konrad Mizzi were first brought under public scrutiny in 2014.

At the time, Opposition health spokesperson Claudette Buttigieg had demanded in parliament to be given details about Comerford’s precise role within Mizzi’s health ministry.

In a terse reply, Mizzi said Comerford was providing project management and engineering consultancy to the health and energy ministry.

Between 2014 and 2019, Comerford’s company Impaqt received over €670,000 in direct orders and contracts from the health ministry, split across 15 different contacts.

These ranged from small contracts worth €4,500 for “project management and engineering consultancy,” to a €36,000 retainer fee and a €234,000 contract for “consultancy and project management services”.

In 2020, the Foundation for Medical Services even appointed Comerford as a project manager, on a position of trust basis, with an annual pay of €35,000, plus allowances.

This position of trust contract was renewed in 2021 and 2022.

This article was produced with support from OCCRP and the Daphne Caruana Galizia Foundation.