Prime Minister Robert Abela has told embattled MP Rosianne Cutajar that she must resolve her tax disputes this week or risk losing the support of the Labour Party.
The PL’s parliamentary group met on Friday and discussed, among other things, Cutajar’s position and future within the group.
Sources said Abela had made it clear that the fact Cutajar was the subject of an ongoing investigation into her taxes was undermining his own credibility as leader and that of the party.
“The prime minister stressed that as long as Rosianne Cutajar is being investigated by the Tax Department, he cannot be seen as credible. It will also undermine any criticism of (opposition leader) Bernard Grech’s own tax irregularities, for example,” one Labour MP said.
Cutajar was not present for the meeting with MPs as she was abroad.
Times of Malta reported on Monday that the taxman had started an audit and investigation a few weeks after it first exposed how Cutajar had helped broker a multi-million-euro property agreement for alleged murder conspirator Yorgen Fenech.
The Tax Compliance Unit within the Inland Revenue Department is awaiting direction from a tax board over whether their investigation into potential tax evasion should be passed on for criminal investigation by the police or continue being managed internally as an “administrative concern”.
Labour sources said the most likely outcome would be that Cutajar’s associate, Charles Farrugia, known as it-Tikka, will declare having received the entire brokerage fee
Inland Revenue Commissioner Marvin Gaerty had requested his staff to look into allegations that Cutajar received some €46,000 in cash for her role in brokering a €3.1 million property deal for Fenech, who stands charged with complicity in the assassination of Daphne Caruana Galizia.
It is understood that in the coming days Cutajar, and other parties to the property deal, will be formally notified by the tax authorities that they are the subjects of an evasion investigation.
Meanwhile, Labour sources said the most likely outcome would be that Cutajar’s associate, Charles Farrugia, known as it-Tikka, will declare having received the entire brokerage fee.
“That way Rosianne will not have to change her story (about never receiving any brokerage fee) and the whole issue can be put to bed,” a party insider said.
“All the PM cares about is that this issue is resolved and the investigation closed, as soon as possible,” they added.
Farrugia also acted as a broker in the property deal and was paid his hefty commission in cash. Fenech, and the seller of the property, Joseph Camilleri, also feature in the tax probe.
The investigation has been on the backburner for several weeks as tax officials awaited the results of a separate probe by the Commissioner for Standards in Public Life George Hyzler.
That report was concluded last week and found prima facie evidence of multiple ethics breaches.
After the report was published, Cutajar was informed that her temporary resignation from cabinet had been confirmed and she would not be returned to office.
Parliament’s ethics committee will discuss the report on Monday morning, with Hyzler due to appear to answer MPs’ questions.
Cutajar has defended her position saying she planned to stay on as a member of parliament. Writing on Facebook, she said she had been elected to parliament by the voting public and had no intention of giving up her seat.
She said the Hyzler report had come to a conclusion she could not agree with and vowed to defend her reputation.