Former Energy Minister Konrad Mizzi negotiated an agreement for Enemalta to absorb €5 million in excise tax owed by Electrogas, without the Finance Ministry's knowledge, an inquiry heard on Friday.

Those negotiations had taken place around September 2017 and the Finance Minister had only got to know later, in January 2018, of the agreement burdening Enemalta, the top civil servant at the Finance Ministry, Alfred Camilleri, explained in court.  

Camilleri divulged Mizzi's €5 million arrangement after lawyer Therese Comodini Cachia, quoting internal emails sent behind Camilleri's back, noted that lenders who had financed a bridge loan for the Electrogas power station were getting "extremely nervous". 

Their nerves had been rattled by Electrogas defaulting on a €450m loan agreement, prompting a flurry of emails between stakeholders. 

Camilleri was again testifying in the public inquiry into the assassination of Daphne Caruana Galizia, continuing where he had left off last week, fielding another three hours of questioning by the three judges on the board and lawyers for the victim’s family. 

Closing off the chapter on the controversial power station project, lawyer Therese Comodini Cachia quoted from an email exchange including one sent by Turab Musayev of Socar Trading to other players in the Electrogas project stating.

The email stated: 

“Dear all, Minister is working on solving on excise tax issue. Yorgen and I spoke this morning to Konrad Mizzi and David... We clearly emphasised that current deadline is not attainable. They agreed. An extension of the bridge loan at this stage is not on the table.”

That was some three days before Camilleri was alerted by Bank of Valletta about the default on the bridge loan, prompting him to call an urgent meeting of all concerned within two days.

Yet, although he had answered the bank’s email within 10 minutes, copying a list of persons, his own minister, Edward Scicluna, had not been copied in.

“How come?” asked Comodini Cachia. 

“Of course, I informed him immediately afterwards,” explained the permanent secretary. 

Finance Ministry left out

Camilleri confirmed that the finance ministry had only been involved at the guarantee stage and not at all in the tendering process, prompting Chief Justice Emeritus Joseph Said Pullicino to ask whether things would have been done differently had it been involved in the planning stage of the project. 

“When we are involved in detail, we ask a lot and some do not like it,” came the reply. 

“It was a cabinet decision to give the guarantee… taken by all ministers and don’t talk to me about kitchens,” said Camilleri, referring to the “kitchen cabinet” mentioned by Minister Edward Scicluna when testifying before the inquiry, knowledge of which Camilleri himself denied. 

Once that €360 million guarantee on the €450 million bridge loan had been issued by the government, the finance ministry had monitored the works very closely, keeping track not merely of the financials but also of material issues, including “a crack in the boiler,” reports of which had been published in the media. 

Pressed further about the implications of the bank guarantee, Camilleri affirmed that he had “never shirked responsibility” and would “not abdicate”.

“I could have resigned when the guarantee issue cropped up. But what would that have solved? The guarantee would have been issued nonetheless at a lower expense. I was accused of piling up expenses. That indeed would have been system failure,” he said, pointing out that he had sought to minimise risks and ensure a sound financial safety net. 

“Love me or hate me, I always state my opinion,” said Camilleri, when the questioning turned to the subject of direct orders and Projects Malta. 

'Look into my eyes'

He claimed to have always stood his ground, including one day in November or December last year when, while people were protesting outside parliament, then minster Konrad Mizzi had approached Camilleri, inside the Parliament building, telling him, “Look me in the eyes. I had nothing to do with it.” 

“I don’t look anyone in the eyes and I simply don’t care,” came Camilleri’s reply to the minister who had directly appointed him as director at Projects Malta. 

He divulged the information in response to questioning by lawyer Jason Azzopardi.

Even back in June 2015, Camilleri had asked the Projects Malta board about its functions in respect of the Vitals hospitals concession. 

The reply he got was that that was a government project, contracted by the energy and health ministry and that Projects Malta’s role was to administer. 

The evaluation committee had also been selected by Mizzi’s ministry, Camilleri said.

As for direct orders handed out to Nexia BT, Aron Mifsud Bonnici’s law firm and to former Projects Malta CEO William Wait, Camilleri said that he had written to Wait, stating that direct orders had to be “justified” and strongly advising “to open up the procurement system to competition”.

Direct orders under €139,000 were contracted by the particular ministry, approved by the minister or his delegate and only then moving to the finance ministry for clearance. 

Panama Papers

How had the ministry reacted to the Panama Papers revelations, the board asked. 

“Do your job. That was my reaction. I always gave all help to institutions to do their job,” said Camilleri, adding that, “it was a matter for the tax authorities” and the finance ministry did not go into that. 

Had his manner of dealing changed after the Panama revelations, for instance, in respect of Konrad Mizzi and his alleged implication in the whole affair, Comodini Cachia pressed on. 

“I was much more on my guard. We double-checked everything. Yet, even today, were there any convictions?” the witness remarked. 

Moneyval concerns

As his testimony neared its end, parte civile lawyer Jason Azzopardi focused on the Moneyval report and the implications of a possible grey listing for Malta’s economy. 

That would bring about a detailed programme of reforms and very close monitoring by the Financial Action Task Force set up under the G20.

“A fail is a fail, no matter how much,” stated the witness, who also chairs the Moneyval action committee, pointing out that grey listing would likely impact foreign investment by making Malta “less attractive”.

“We don’t know yet when the decision about Malta is to be taken. It is still work in progress,” he said, stressing that success called for the input not only of government but also the private sector. 

“We must believe in the project which is to our collective benefit. We must resolve to do the right thing. We must work well and not relent to ensure a sound and sustainable framework,” he stressed. 

“No pious quotes, platitudes or good intentions can save us. We have to work and do our jobs to achieve our goals.”

The inquiry continues on Wednesday. 

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