Lands chief received payments from Fortina CEO in year of ‘undervalued’ deal

Ex-Lands Authority CEO James Piscopo received payments from Fortina’s CEO in 2019, the same year the authority was involved in a cut-price deal for the group to redevelop its Sliema hotel site into apartments and offices, an intelligence report shows. 

Piscopo was paid over €50,000 in 2019 from two companies co-owned by Fortina Investments CEO Edward Zammit Tabona, and a further €153,000 from another company linked to Zammit Tabona between April 2021 and March 2022.

Piscopo and Zammit Tabona confirmed the existence of the payments but insisted they were private and legitimate, with no connection to the Fortina deal.  

An intelligence report handed to the police for potential investigation over three years ago, in July 2022, detailed suspicions that the payments may be linked to “corruption and bribery”.

The report flagged how bank accounts of a company owned by Piscopo mainly received money from businesses linked to Zammit Tabona, raising suspicions it may have been set up for “dubious purposes”. 

Police did not reply to questions about the status of any potential investigations into the payments. 

Piscopo was the subject of a police investigation into corruption, tax evasion and money-laundering investigation concerning his time at Transport Malta and, later, as CEO of the Lands Authority.

Fortina have been in the spotlight after a report by the Auditor General revealed last week how the group potentially saved over €10 million following a series of questionable decisions within the Lands Authority. 

The National Audit Office (NAO) report found Lands Authority chairman Lino Farrugia Sacco “suppressed” an external valuation saying Fortina should pay the government between €18 million to €23 million for the redevelopment. 

Instead, Fortina paid €8.1 million based on a partial internal valuation by the authority that failed to consider all the lands being redeveloped. 

Fortina contests the NAO’s findings and say that should the same exercise be conducted today under the existing legal framework, the required waivers would have been obtained at a significantly lower cost than that to which it had committed.

Piscopo approached ‘for assistance’

Piscopo’s own role in the deal also came into focus in the NAO report. 

In submissions to the Auditor General, a Fortina representative admitted approaching Piscopo “for assistance on Fortina’s request for the rescission of conditions burdening its site”.

One of Fortina’s representatives told the National Audit Office (NAO) that he had known Piscopo for several years and that the Lands CEO was a close friend of his. 

“He admitted that he had had a business connection with the CEO Lands Authority, but emphasised that this had ended long before and that, at this juncture, this posed no conflict of interest,” the Auditor General’s report reads.

Piscopo declared his conflict of interest with Fortina’s owners to the authority in September 2018, after journalists raised questions weeks into his appointment as CEO. 

Public records show Piscopo divested himself of a joint shareholding with Zammit Tabona’s company BBF Limited in July 2018. 

Although Piscopo exited the company in 2018, an intelligence report seen by Times of Malta and Amphora Media shows he received €46,541 from BBF Limited the following year, via a company he owns called Roswell Management. 

The ex-Lands Authority CEO received a further smaller payment from another company co-owned by Zammit Tabona. 

A 'return of initial investment'

Piscopo told Times of Malta that the payments were a return of his initial investment in BBF Limited, which amounted to €46,541, made back in 2017 (prior to his appointment as CEO), as well as the nominal value of the shares sold to another private company.

“In essence, the ‘payments’ in 2019 to which you are referring concern the recovery of an investment undertaken two years earlier, and had absolutely no link with the Fortina waiver process, which was approved by parliament months after,” Piscopo said. 

Zammit Tabona told Times of Malta he maintains separate business interests from Fortina Group, which include minority shareholdings and directorship in BBF Limited, and a minority shareholding in OZO Group. 

He said Piscopo sold his shares in BBF in 2018 and was “subsequently paid for it”. 

“While his contributions towards the initial share capital and shareholders loans to BFF were duly returned to him by 2019, his exit from the company was effective in 2018 as shown in the MBR,” the Fortina Investments CEO said. 

A spokesperson for Fortina said Zammit Tabona has always “conducted himself in a correct manner as CEO of the group”.

The spokesperson said the company is not in a position to comment on commercial dealings, financial arrangements, and business relationships of companies outside the Fortina Group. 

“Doing so would be inappropriate and potentially prejudicial to legitimate business interests and commercial confidentiality.

“Our decision not to comment, however, should in no way be construed as acceptance, denial, or acknowledgement of any allegations or characterisations regarding any purported payments or transactions,” the spokesperson said.

The spokesperson said it is “unequivocally clear” from the NAO report that Piscopo abstained from any involvement in any discussions or decisions on the waiver of the conditions requested by Fortina.

“Furthermore, when the parliamentary motion was under consideration, there was no commercial relationship between the Fortina Group and Piscopo,” the spokesperson said.

Copied in board minutes

An internal Lands Authority e-mail dated April 2019 obtained by Times of Malta shows that although Piscopo declared his conflict of interest internally, he continued to be on the mailing list of people provided with minutes of board discussions about the Fortina deal and valuation.

Two years after the Fortina deal, Piscopo started to receive monthly payments of €11,800 from Ozo Group, which is part-owned by Zammit Tabona.

Piscopo’s company Roswell Limited was paid €153,000 by Ozo Group for providing “advisory services” in the space of a year. 

Piscopo told Times of Malta that one-and-a-half years after the Fortina waiver process was concluded, he moved to the private sector and reactivated his company Roswell Management. 

He said to this very day, his professional focus within Ozo Group is on business development and strategic guidance, while providing support to various connected companies, specific project management initiatives, and internationalisation.

A spokesperson for Ozo Group said Piscopo has been a senior member of the team since 2021, and to this very day, provides the group with a professional contribution backed by his academic background and demonstrated senior management experience. 

The spokesperson said Piscopo has helped Ozo expand its business beyond Malta, and genuine engagement is well-documented and independently verifiable. 

Taking a step back

Piscopo told the Auditor General he took a step back from the Fortina deal due to his conflict of interest. 

The Lands Authority CEO told the Auditor General he did not engage in any conduct that could have influenced the course of decisions or actions but could "not exclude the possibility of having been asked to provide [Fortina] updates”.

According to the NAO’s report, Fortina said the only reason it sought assistance from Piscopo was to expedite the process and not to influence the value given to the deal. 

Fortina said in testimony to the NAO that Piscopo refused to intervene due to the conflict of interest, instead directing them to Farrugia Sacco.

Fortina added that Piscopo’s withdrawal from handling the deal might have contributed to delays and complications in obtaining the government’s approval for it. 

‘Weekly meetings’

Keith Schembri, then chief of staff to ex-prime minister Joseph Muscat, told the Auditor General that he had weekly meetings with top officials, including Piscopo, to discuss major development and investment projects, including that of Fortina.

Times of Malta has previously revealed how former Prime Minister Joseph Muscat received payments from Fortina soon after stepping down as Prime Minister in 2020.

In further submissions to the Auditor General, Schembri claimed he never discussed Fortina with Farrugia Sacco or Piscopo, saying Piscopo’s friendship with Fortina “rendered resort to the OPM redundant.” 

The NAO report determined that Fortina was the recipient of a significant information leak.

The Auditor General noted that, by February 4, 2019, Fortina was already in possession of the €8.1 million valuation by the Lands Authority’s architects before it was ever officially disclosed to them. 

Fortina later confirmed that this valuation triggered its own €2.7 million counter-valuation.

The Auditor General further noted how, in June 2019, one month before parliament voted, Fortina sent an “unprompted” acceptance of the €8.1 million valuation to the Lands Authority, despite never having been formally told about it.

“One questions Fortina’s acceptance of the valuation by the architects [of the] Lands Authority some weeks after the audit firm had established a higher valuation in its report to the chair. The absence of any documented communication during this period and the timing of Fortina’s acceptance was deemed suspect by the NAO,” the report says.

Piscopo told Times of Malta that the NAO report "contains no adverse findings against me”.

“On the contrary, the NAO unequivocally affirms that I declared any potential conflict of interest and consistently distanced myself throughout the entire process as a matter of prudence,” he said.