Joseph Muscat and his associates were back in court on Thursday as they face charges of corruption in the notorious hospitals deal.

Contrary to the first sitting on May 28 when hundreds of Muscat supporters showed up outside court, the atmosphere outdoors was different, but the tension surrounding this unprecedented case was palpable.

The case involves a deal, originally struck in 2015, in which the management of three of the country’s hospitals was handed over to Vitals, a private company, with no experience in healthcare. The concessionaire changed to Stewart Healthcare in 2018.

In February 2023, a court annulled the concession, citing fraud.

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Main points:

• Police inspector repeatedly confirms on oath that the police did not investigate the Vitals case. They relied on the findings of the magisterial inquiry;
• The decision not to investigate was taken collectively by police bosses, including the commissioner;
• Repubblika accuse AG, police boss of an 'act of sabotage';
• Court to hear more arguments before declaring whether there is sufficient prima facie evidence for the accused to stand trial on indictment.
• Court turns down request to revoke experts’ confirmation;
• Lawyers mull potential breach of rights of accused.

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Thank you

Thank you to the thousands who followed our live blog for the past four hours. We will bring you a wrap-up shortly. 

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Case adjourned to next week

3pm Magistrate sticks to her word and adjourns today's sitting: she sets dates for the next sittings: June 19 at 11am, June 20 at 10.30am and June 25 at 10am.

She says she appreciates that the defence needs time to see all that evidence but tells the sea of lawyers in front of her: “put all your efforts to focus on this case".

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AG's role has drastically changed

2.45pm Filletti asks the court to order all those who signed and confirmed the charges on oath to testify so that it can understand better what led to the charges.

"We thought that the prosecuting inspector would illuminate us but all he told us that they relied on conclusions of inquiry. This testimony was necessary because it also impinges upon the validity of the charges."

"Who else makes this request?" asks the magistrate.

All defence lawyers want that too.

The AG's office objects because those who signed the charges were not investigators and at the end of the day, they acted as representatives of the AG’s office.

But Franco Debono points out that the AG’s role had drastically changed after recent amendments. 

Lawyer Charles Mercieca adds that the law now grants the AG the power to order investigations and this is why there is now a request to testify.

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Potential breach of rights raised

2.40pm Franco Debono says that since the accused were not allowed to give their version, including reasonable excuse, as mentioned by the money laundering law, their fundamental rights were potentially breached and so, they reserved the right to raise breach of rights complaint at the opportune stage.

Lawyer Vince Galea adds that in case of Joseph Muscat this shortcoming was even worse because the former prime minister had asked the police to give his version and that request was not met.

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Former inspector requested to testify

2.37pm The inspector confirms that the police also issued charges to Nexia BT, MTrace Ltd without investigating. 

Jason Grima has one request in light of the information that just emerged.

He wants to summon former inspector Anthony Scerri to testify. The court registers that request.

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Who actually investigated?

2.35pm The magistrate is now getting nervous and reminds the defence that today’s session will stop at 3pm.

"Please don’t make useless and repetitive questions out of respect to colleagues," she says.

And for the umpteenth time the witness confirms that the police did not investigate.

Lawyer Arthur Azzopardi asks about his clients. Inspector confirms that on May 3 the lawyer had sent email so that police would take his clients’ version.

Jason Vella asks the inspector “do you know Jonathan Vella?”

Inspector: "Other than seeing him here (as one of the accused), no I don't".

Vella: "So how did you issue charges against him for €20 million fraud? So you don’t know where that came from? And you didn’t speak to Vella? So did the police corps and AG also decide not to send for Vella too?"

The inspector confirms again that that was the case.

Franco Debono: "Was Sciacca granted the opportunity to give its version?"

Inspector: "No."

Tonna Lowell: "I still haven’t understood something. Who investigated?"

Inspector: "The magistrate. After the inquiry was wrapped up there was no other investigation by police."

Tonna Lowell: "How do you know that the inquiring magistrate investigated? From what I read that's not the case."

In a helpless tone, the inspector repeats: "All I can say is that I didn't investigate."

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'We had no visibility'

2.25pm The police inspector is once again asked if the police tried to hold a parallel investigation.

The magistrate believes the questioning is becoming repetitive.

Lawyer: "Who told you not to investigate?

Inspector: "My superiors and the police commissioner.... May I point out that the inquiry did not say that the police were to continue to investigate. We never had visibility of what was going on, we never had those 78 boxes. We based ourselves on the conclusions of the inquiry."

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Questions about Muscat

2.20pm Borg says that he consulted the police and AG. The decision to rest on the inquiring magistrate’s conclusions was a collective one, jointly between police and prosecutors.

"Can you tell us what you did before pressing charges?"

Inspector: "I saw the conclusions and most of the appendices. There’s a small bit I didn’t see.

Lawyer Galea: "May I ask about the investigation order?"

Magistrate: "It’s the AG who asks for an investigation order, so that question is not allowed."

Lawyer: "On Joseph Muscat, the police did not find anything, correct?"

Inspector: "Correct, because we did not investigate."

Lawyer: "Do you know that Joseph Muscat filed a request to the police commissioner?"

Inspector: "I know that Joseph Muscat made a request to the inquiring magistrate."

Lawyer: "Was it Muscat who asked or was he asked to go by the inquiring magistrate?"

Inspector: "It was the magistrate who sent for Muscat."

Lawyer: "Are you aware that Joseph Muscat did not go because of constitutional proceedings he had instituted?"

Inspector: "No."

Inspector says that Muscat had filed a note to the police commissioner to give his version.

"But he was never spoken to. Why?" asks Galea.

Inspector: "Because there was a collective decision to rely on the conclusions of the inquiry."

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Charges discussed with AG

2.10pm Inspector Borg says the charges were decided on the conclusions of the process verbal.

Galea asks about amount he signed for in respect of Joseph Muscat. But the court again says that questions about the freezing order are not allowed.

"OK, I’ll ask about proceeds of crime," says Galea.

Inspector says that the magistrate had indicated sums in the process verbal and the charges were discussed with the AG.

"So did you consult AG? Who was present when you consulted?"

Inspector: "The three prosecuting lawyers and the AG."

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Police superiors took decision not to investigate

2.07pm Inspector says he absolutely had no visibility on the inquiry.

"Who in the police decided that there was to be no investigation?"

Inspector: "I took over when Scerri left and I continued in the same manner."

Pressed further to say who had decided not to investigate, the inspector says that he and his superiors took the decision.

"Who were his superiors?" asks lawyer Vince Galea.

Inspector Borg says it was himself, superintendent Hubert Cini, Assistant Commissioner Fabian Fleri and the police commissioner Angelo Gafa.

"Did you get a direct order to sign the charges?"

Since I was assisting the inquiring magistrate, it was my duty to sign the charges.

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'We have enough in front of us'

2.05pm Lawyer Veronique Dalli now points out that the inspector had made reference to appendices. And those appendices mentioned Taomac Ltd and another Maltese entity.

Their business ran parallel but later, that other entity’s name no longer featured. And that other entity is not facing charges.

The inspector says he did not investigate Taomac.

"At no point did I have visibility of Taomac or other entity. During my time on the case, I don’t recall serving any notice of summons to Taomac."

"Who decided not to investigate that other entity?" Dalli insists.

The court would not allow questions about an entity that does not even feature in the charges.

"We have enough in front of us," the magistrate says.

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Inspector's first inquiry

2pm De Marco asks the police on what basis were charges issued for illicit proceeds.

Once again, the inspector says the police relied on the inquiry

"So that was all the investigation!" De Marco charges.

"Nothing on the bank accounts of Gatt and so on?"

Inspector: "The police did not investigate."

Mark Vassallo asks whether inspector was involved in other inquiries.

"This was the first one," the inspector replies.

The lawyer wants to ask about police practice in inquiries.

"How can he answer that if this was his first inquiry," remarks the magistrate, cutting short that line of questioning.

Vassallo: "Do you know your obligations under the law?"

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Exchange between magistrate, lawyer

1.52pm De Marco wants to ask about the freezing order but the court does not allow that. The freezing order has already been issued by the court and so those questions will not be allowed.

The lawyer clarifies that she wants to ask about the illegal proceeds not freezing order.

An animated exchange breaks out between the magistrate and the lawyer.

The lawyer says that just as the court expects respect, so also the court must treat its officials with respect.

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Police inspector on the spot

1.50pm The inspector is asked how the police helped the inquiring magistrate.

"We didn’t help. We assisted the magistrate by summoning witnesses," inspector Borg replies.

"So you acted like postmen," de Marco says.

The soft-spoken inspector says: "Other colleagues helped in the searches. We helped with summons but not as parrots or postmen.

De Marco: "What did you analyse on the money transactions?"

Inspector: "I relied on appendices."

De Marco: "But what did you read in those appendices to make you press charges?"

Inspector: "The charges were issued solely on the basis of conclusions by the inquiring magistrate."

De Marco: "Did you investigate the bank?"

The magistrate intervenes: "That's a very direct question".

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'You simply parrotted the conclusions'

1.40pm Debono insists that the law says the inquiry should be sent to the police. In this case, the police got the proces verbal and appendices. But not the rest.

The law also says that the police commissioner may consult the AG on the charges. Was this done in this case?

"We relied on the conclusions in the inquiry," says the inspector.

Lawyer Jason Grima now makes reference to a particular application filed by former inspector Anthony Scerri. Auditor Chris Spiteri had testified before Magistrate Vella and after that testimony, the inspector had filed an application.

"So it seems that police did investigate."

Scerri's application had read: "With reference to inquiry investigations about this crime we’re still ongoing and to do so they need assistance of a photographer."

But Inspector Borg does not recall seeing that former colleague’s application.

Giannella de Marco chips in and asks about her client, Mario Gatt.

"On what basis did you press charges against Mario Gatt?"

"The conclusions and appendices," says the inspector.

"So you simply parroted what you read in the conclusions," de Marco strikes back.

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Police relied on the inquiry

1.35pm Inspector Wayne Borg takes the stand. He confirms that he signed the charges as officer in the economic crimes section. He says that he did not investigate but only signed the charges.

Lawyer Filletti: "So who investigated from the corps?

Inspector: "No one did. I relied on the findings of the inquiry."

Filletti: "What did you consider? The conclusions?"

Inspector: "The 78 boxes were never in police possession. I saw most of the addendums and the conclusions. I signed the charges as prosecutor not investigator.

Filletti: "Did you speak to Hillman?"

Inspector: "No."

Filletti: "Why?

Inspector: "Because we relied on the inquiry."

Filletti: So didn’t you feel the need to summon him, to give disclosure?

Inspector: "No. I couldn’t give disclosure because we didn’t have the 78 boxes of evidence."

Filletti: "What time lapsed between getting the inquiry and signing the charges?"

Inspector: "Not sure, but about a week or so."

Filletti: "Who issued the charges?

Inspector: "The AG."

Franco Debono: "What did you find about  Sciacca Grill?"

Inspector: "Nothing, because the police did not investigate. There was no parallel investigation. They relied on inquiry. And once the inquiry was concluded police did not investigate further.

Debono: "Since money laundering law perceives that suspect may give a reasonable excuse, did the police give suspect that possibility?"

"No. The police relied on the inquiry. Police work consisted in assisting the inquiring magistrate, serving notices of summons to those called to the inquiry."

Debono: "So on what basis did you sign charges?"

Inspector: "I relied on the inquiry. I didn’t have those 78 boxes. The police were never in possession of those boxes. So re: Sciacca Grill I saw no evidence. Where it came to the boxes we only assisted the AG in transferring those boxes to court."

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Police ordered to testify

1.25pm The court has rejected Filletti’s request, insisting that the reading out of the charges by the prosecution was equivalent to reading out the police report.

That requisite was not mandatory for the validity of the proceedings. But the court upholds the defence’s request, namely that an investigating officer was to testify about the investigation.

As rightly pointed out by the defence, the lack of evidence by the person charged - including before prima facie decree - would render the proceedings defective.

So the court upholds that request and orders the police officer to testify about the investigations.

"Who will testify?" asks the magistrate.

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'An act of sabotage'

1.20pm Meanwhile, Robert Aquilina from Repubblika decries the fact that Attorney General Victoria Buttigieg and police commissioner Angelo Gafa are not in the court room to back the prosecution. 

"This is an act of sabotage… but I’m convinced that justice will be served," he says in a Facebook post.

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One last chance

1.15pm Franco Debono wants to make another point but the magistrate has had enough.

"The requests should have been done before. It seems you’re all prepared here to make requests. That’s why I told you before that you were to make all requests in one go," magistrate Montebello says.

"Does that mean we don’t have right to make requests?" Debono asks.

"No, the court is not denying you any right but this will be the last chance," says the magistrate.

Debono says a legal article specified that the defence can ask one of the investigators to testify. Regarding his client Sciacca Grill, the defence needs to know what the prosecution has in hand before the prima facie.

Other lawyers, all except those for Thompson, join Debono's position.

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Who investigates?

1.10pm Filletti insists that it is the police and not the inquiring magistrate who should investigate.

"So someone from the police must take responsibility for those charges. And it’s not correct for the prosecution to say that this requirement is fulfilled upon presenting the proces verbal. If anything the proces verbal was to support the charges. But here we have a missing part, a gap," the lawyer says.

The police report could be oral not written. But the court needs to ensure that the evidence is sufficient to support the charges.

"Did the police do the minimum to make sure that there was a basis for pressing charges? Whoever pressed the charges must be subject to cross-examination. Whoever testifies, whoever confirmed the charges on oath, is a witness and must face cross-examination. That’s why we’re insisting on this," Filletti says.

Refalo from the AG's office again explains that the report mentioned by the defence is nothing but the charges.

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Police witnesses

1.05pm Filletti asks at which stage will the prosecution produce police witnesses to confirm the police report. 

Refalo from the AG's office says the report was the charge sheet which was duly read out and that was in terms of jurisprudence.

But Filletti insists on behalf of all the defence that the investigating officer is to testify to confirm his report on the investigation as dictated by law.

A visibly irritated magistrate says the court has already ordered that any requests were to be put forward all in one go. 

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Request to revoke experts' appointment turned down

1pm We are back in session. The magistrate was asked to revoke her decree at the first hearing when she confirmed all experts appointed in the inquiry. 

The court says the inquiring magistrate appointed various experts between 2019 and 2023. They were variously tasked with analysing devices and data and report about any criminal wrongdoing. One of the experts was tasked only with examining documents. 

The court noted that at this stage the court was only to compile evidence. And that was why the court confirmed the experts' appointment. At this stage the court must compile all evidence and it would be lacking in this function if it were not to confirm the evidence gathered by the experts.

All evidence must be preserved at this stage. And the proces verbal must be part of the compilation. What the experts said had legal validity because the inquiring magistrate embraced their observations when reaching its conclusions.

So that request for revocation is turned down.

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What's happening?

12.10pm So, almost one hour into the sitting, the magistrate is mulling a request by the defence on whether the appointment of court experts, (chosen through the magisterial inquiry), should be revoked.

She will also decide whether the defence is to have full data from the inquiry before being in a position to contest the prima facie evidence.

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Sitting suspended

12pm The magistrate asks if there are any further requests from the defence team because she would not accept any others later.

"The court will not decree piecemeal because the proceedings cannot be interrupted repeatedly while the court decides on each request," Magistrate Montebello says. 

With no other requests from the defence, the magistrate suspends the sitting for half an hour or so.

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Guilty by association?

11.52am Filletti reads out from different decrees delivered by the courts. The experts were tasked to analyse transactions and then to report on which offences - in terms of Maltese law - the various persons investigated should be liable to face. That was not right, the lawyer says. 

What constitutes a criminal offence or not was not for the experts to decide.

"They were not the experts on the matter. They should never have been tasked with making considerations on what constituted a criminal offence or not. Had they been asked to make a summary of financial transactions, then yes. But not give their view on what makes a criminal offence. In Hillman’s case, the fact that he had contact with 'shady characters' made him a criminal suspect. The experts took the magistrate’s direction to heart."

The court decides the matter will be decided later.

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First witness

The first witness on behalf of Bank of Valletta takes the stand. She presents a  statement on an account belonging to Mario Victor Gatt, from January 2023 to date.

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Defence objections

11.40am Franco Debono says the defence is not in a position to assess whether to object to experts, insisting they must first have a full copy of the inquiry records and all evidence put forward so far.

His client Sciacca Grill reserves the right to declare the position of the company on the matter once it gets that data.

Meanwhile, Filletti says the experts did not prove they had knowledge of Maltese criminal code and laws. 

AG objects to the defence’s request. The experts were appointed in terms of the criminal code, and it was ultimately the inquiring magistrate who decided which charges were to be attributed and to whom.

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Those 'experts'

11.30am A Bank of Valletta official is called to the stand.

But Lawyer Filletti has something to say about the experts before the first witness speaks. He says the experts had concluded what each person was liable for. These experts had specialised knowledge which the court lacked.

But appointing experts to say whether a person is liable for a crime under the criminal code, is not on, he says.

"You have to identify who these experts are", says the magistrate

"It's a long list, your honour," says the lawyer.

The names of the financial experts appointed by the inquiring magistrate are rattled out - none appear to be Maltese nationals.

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Cut-off time: 3pm

11.25am Magistrate Montebello reminds the parties that one lawyer from each team can speak. And today’s sitting will definitely not extend beyond 3pm, she says.

There must be a sigh of relief from all parties, including the reporters in the court room. The last session in connection with this group lasted nine hours! The other session dealing with a second group dragged on for 11 hours!

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Who are the defence teams?

11.20am There are teams of lawyers assisting the accused.

Muscat is assisted by Vince Galea, Charlon Gouder, Ishmael Psaila, Luke Dalli, Etienne Borg Ferranti and Dominic Micallef.

Schembri and Mizzi are assisted by Edward Gatt and Mark Vassallo.

David J Meli is assisted by Giannella DeMarco and Charles Mercieca, while Spiteri is assisted by Jason Grima. 

Pierre Sladden and a number of companies are assisted by Arthur Azzopardi.

Franco Debono and David Bonello are counsel to Sciacca Grill Ltd, while Stefano Filletti is counsel to Adrian Hillman. 

Other lawyers include Stephen Tonna Lowell, Shazoo Ghaznavi, Jessica Formosa, Veronique Dalli, Rachel Powell and David Bonello.

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Prosecution, accused take their place

11.15am Proceedings are taking place inside Hall 22, the largest room available in the building. The accused and their lawyers take their place. 

We are about to start.

Attorney General lawyers Francesco Refalo, Rebekah Spiteri and Shelby Aquilina are prosecuting together with superintendent Hubert Cini and inspector Wayne Borg.

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'I did nothing wrong' - Mizzi

10.55am Arriving outside court, Konrad Mizzi maintains he never did anything wrong and that this will be confirmed by the court. 

Asked whether he felt responsible for Labour's reduced majority in the European elections, Mizzi stressed he has been out of the political arena for years.

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Aquilina in court

10.45am Robert Aquilina, a highly vocal critic of Muscat, from rule-of-law NGO Repubblika is present in the court room. 

It was Repubblika which requested an inquiry into the hospitals privatisation deal, since annulled by the courts.

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No comment from Muscat 

10.40am The former prime minister has arrived in court but does not give any comments to reporters. Some supporters applauded Muscat as he made his way in. 

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What are the charges?

10.30am Fourteen individuals and nine companies stand charged with money laundering. They are variously charged with misappropriation, fraud, making fraudulent gains, involvement in a criminal association, setting up a group of more than 10 to commit a crime. The crimes are subject to imprisonment of more than four years. 

Joseph Muscat, Keith Schembri and Konrad Mizzi are accused of seeking to accept bribes, money or other advantages. 

Schembri is separately charged as chief of staff for soliciting money or other benefits he was not entitled to. He is also charged with openly or secretly taking private interest in a tender or contract, leaking confidential information and committing crimes he was duty bound to prevent. 

Clarence John Conger Thompson as senior IT manager and Christopher Spiteri as auditor of Steward Malta Management Ltd are accused on knowingly seeking or receiving bribes, in breach of their duties and/or in their official roles.

David Joseph Meli, both personally and as representative of Steward, is charged with allegedly bribing Muscat, Schembri and Mizzi.

Brian Tonna and Karl Cini, of Nexia BT, allegedly assisted Muscat in receiving those bribes. They also assisted Muscat, Schembri and Mizzi in trading in influence. 

Spiteri, as auditor, made a false declaration in a public document, divulged professional secrets, made under-declarations for tax purposes on behalf of Shaukat Ali and his relatives. He also breached accountancy laws, committed document fraud and committed perjury when testifying in the magisterial inquiry. 

Spiteri, Jonathan Vella, Brian Bondin and David J Meli, personally and as legal representatives of various companies, knowingly made false declarations in a public document to gain some advantage for themselves or others. 

All persons and companies will be jointly and variously charged under summons, not arrest. The court can issue an arrest warrant against any of them who fail to turn up when duly notified. 

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Hundreds showed up outside court in support of Muscat on May 28. Photo: Matthew Mirabelli

What happened on May 28?

10.15am The former prime minister’s first appearance in court resulted in a nine-hour long session, characterised by lengthy arguments as defence and prosecution lawyers tensely debated several legal issues.

All persons charged, both natural and juridical (companies), pleaded not guilty. 

The prosecution then requested millions-worth freezing orders over the accused’s properties and that presented the first bone of contention.

The defence insisted that the prosecution was to “substantiate” that request by producing evidence which would enable the court to decide whether to impose such freezing orders.

However, Attorney General lawyers countered that the evidence lay in the 1,200-page report drawn up by the magistrate who had conducted the Vitals inquiry. 

The request was ultimately upheld after due consideration by the court, which observed that the law did not make it obligatory for the court to hear evidence to determine whether the prosecution’s request was valid.

Recent amendments intended to lessen the effects of the formerly-draconian law on freezing orders meant that the prosecution was now to indicate specific amounts to be frozen. 

No parallel police investigations

The first witness was the Registrar of the Criminal Courts and Tribunals, Franklin Calleja, who presented the proces verbal (report) which had been deposited in court together with 78 boxes of evidence and a number of devices. 

Tax Commissioner Joseph Caruana testified that they had flagged to the police suspected under-declarations by the auditor. They granted police dispensation to carry out criminal investigations. The tax authorities did not investigate separately. 

Superintendent Rennie Stivala testified that up until 2021 (he then moved to another unit) there was a police file about the Vitals concession but there was no separate police investigation running parallel to the magisterial inquiry.

And until April 2021 “no one was indicated as a suspect.”

Former police inspector Anthony Scerri who was involved in a number of searches, gave an overview of how those searches were carried out in conjunction with a number of foreign experts roped in to help in the magisterial inquiry. 

Lawyers for Schembri and Mizzi indicated that they intended to challenge the expert who had given his opinion to the inquiring magistrate. 

Court restrictions 

Upon a request by the prosecution, the magistrate issued a number of restrictions.

Although not strictly a ‘gagging order’ the accused were barred from sharing any material from the case records with third parties extraneous to the proceedings.

Nor were they to publicly comment on testimonies or evidence produced throughout the case.

As for restrictions on personal movement, while none were imposed, the court set a €25,000 personal guarantee on each of the persons charged to make sure that they turned up for each hearing.

The reason was to ensure that the proceedings would not be stultified. 

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What led to this?

10am In 2015, the government signed a multi-billion agreement to redevelop and operate three public hospitals with a private company called Vitals Global Healthcare (VGH) Ltd, a company with no previous experience. 

Deadlines for several projects are missed as questions are asked over whether the investors can deliver on their pledges.

The National Audit Office said in 2020 that the government’s work to verify the deal with VGH and its capacity to run three public hospitals was “grossly inadequate”.

The contract was transferred in 2018 to a US company named Steward Health Care.

That same year, then PN leader Adrian Delia files a court case to rescind the concession. The case would eventually conclude in February 2023, with the courts cancelling the deal altogether, describing it as "fraudulent".

A Times of Malta investigation last year showed Muscat got close to €482,000 in various consultancy payments in year of resignation.

Fast forward to last month and a magisterial inquiry - four years in the making - recommended serious charges against a number of high-profile individuals and companies, sparking a political war. 

The last of three reports by the auditor general published revealed that a total of €456 million was paid to Vitals and Steward throughout the concession period. Investigators believe Vitals – and later Steward – stakeholders had no intention of running Maltese hospitals for the 30-year lease period they agreed to.

This included a catering company suspected to be involved in a 10% kickback scheme, a medical equipment supplier which had hidden owners, and a secret shareholder who received monthly €100,000 consultancy payments.

All those charged deny wrongdoing.