Private investigator's report was all made up, court hears

Evasive answers given by a private investigator during questioning turned him from witness to prime suspect, an assistant police commissioner said yesterday.

Michael Cassar said that when Joseph Zahra was called in for questioning regarding a report alleging irregularities in the allocation of the Mater Dei Hospital tender, he refused to reveal the identity of informers who he claimed had hard evidence in hand as he did not want to breach professional secrecy.

Zahra, the officer explained, was initially interviewed as a witness but when he remained evasive in answering questions put to him the interview turned into an interrogation.

He was testifying before Magistrate Giovanni Grixti in the compilation of evidence against Zahra, 50, of Marsascala who is pleading not guilty to filing a police report against people he knew to be innocent and spreading false news that could alarm the public.

The assistant commissioner explained how on July 15 Prime Minister Lawrence Gonzi asked the police to investigate allegations made in a report drawn up by Zahra.

In the report Zahra claimed that Claudine Cassar, managing director of Alert Communications Ltd, and the daughter of the Director of Contracts Joseph Spiteri had met representatives of INSO SpA and spoken with former Foreign Affairs Minister John Dalli's brother Sebastian.

On July 19, the police started investigating the case and spoke to several people, including Joseph Fenech, the legal representative of Simed International.

The legal adviser explained that Simed suspected corruption regarding the Lm30 million Mater Dei Hospital tender which had been awarded to INSO and, consequently, commissioned Zahra to look into the matter.

The lawyer also told the police that Zahra had contacts within the Italian secret service and knew of telephone conversations between Claudine Cassar and Sebastian Dalli.

The police also spoke to Simed's local representative, Frank Farrugia, who said he had met Zahra when he handed over a report on July 21, 2003.

After this report Simed representatives and Zahra did not meet until December 29, 2003 when the company contacted him to investigate the matter again after the tender was awarded to INSO and irregularities were suspected.

The assistant police commissioner went on to explain how the police had approached Zahra as a witness in the case and he released a statement in which he confirmed carrying out investigations into the Mater Dei Hospital tender and compiling two reports after having been commissioned by Simed.

Zahra insisted he did not have any evidence in hand as it was in the possession of third parties whose identity he refused to reveal since he was bound by professional secrecy.

He told the police that if they wanted evidence they would have to investigate themselves.

Zahra added he had gone to Holland to meet Simed vice-president Sietse Zoodsma. He was to get three per cent of the value of the tender if it were to be awarded to Simed.

Zahra said Zoodsma insisted on the hard evidence of the irregularities alleged in the report but his informers demanded Lm9,000 to release the evidence and as time passed the price increased until it reached Lm1 million.

He had told Zoodsma to go to the police as they had the means of getting hold of such evidence legally.

The witness explained that although he was offered witness protection Zahra remained evasive and consequently he was cautioned.

Finally, Zahra said that the whole matter had gone over his head. He admitted that the facts in the report had been invented as was what he had just told the police.

Asked why he had made up such serious allegations he replied it had all been the result of Zoodsma's insistence on the evidence and he needed to justify the fact that he had been paid for his services.

He explained that he had mentioned the figure of Lm1 million to Zoodsma so that he would give up on purchasing the hard evidence.

The police also spoke to Claudine Cassar and Sebastian Dalli who denied knowing each other on a personal basis and denied all other allegations made in Zahra's report.

At the end of yesterday's sitting the magistrate ruled there were enough reasons for Zahra to be indicted.