Joseph Muscat entered parliament’s Public Accounts Committee room with a smile but emerged scowling on Tuesday after being repeatedly asked to comment on testimony given by his former chief aide Keith Schembri.
“You are going beyond your remit. If you’re not happy with my reply, that’s your problem. I am not here to be your parrot. I can take you [on] anytime, any day, anywhere,” a seething Muscat told PAC chair Darren Carabott at the end of a two-hour grilling about the Electrogas power station project.
The personality clash at the end of Muscat’s second PAC appearance was a marked change from the courteous nature of the former prime minister’s first grilling in parliament a week ago, and wrapped up a hearing marked by bickering between Opposition PAC members, their government colleagues and the star witness.
Muscat was especially riled by Carabott repeatedly asking him to say whether he approved of Konrad Mizzi telling Keith Schembri: “I want to do what you do, because everything you touch turns to gold.” Schembri had recalled that exchange when testifying before the committee earlier this year.
The former prime minister declined to express an opinion, saying it all depended on the context in which the words were said. The phrase did not necessarily mean that Mizzi wanted to “get rich”, he argued.
As Carabott sought to goad the witness into replying, Muscat erupted and accused the committee chair of dialling up the political grandstanding as a “knee-jerk reaction” to his handling of proceedings last week.
Muscat was appearing as a witness during a years-long PAC probe into the contract won by Electrogas to build and operate a gas-fired power plant at Delimara. The power station, which has been marked by corruption allegations, was the Muscat government’s flagship project.
It was clear from the start of Muscat’s testimony that the PAC session would be a bumpier one than last week’s: Carabott immediately objected to Muscat’s personal assistant scribbling a note and passing it on to his boss, prompting Muscat to ask where in the parliamentary rulebook that was not allowed.
Relationship with Tonna
A significant portion of Tuesday’s hearing was taken up with questions about the evaluation committee that ultimately decided to award the multi-million project to the Electrogas consortium.
Muscat said he had no input into the tender document or makeup of the committee, though he said he saw nothing unusual about Konrad Mizzi’s energy ministry recommending specific people to form part of it. That was the job of ministries all across the globe, he said.
The PAC has heard that Nexia BT’s Brian Tonna was placed on the committee at the behest of Mizzi’s ministry. Aside from opening offshore structures for Mizzi and Schembri, Tonna’s Nexia BT also served as auditors for one of the shareholders of the Electrogas consortium.
Tonna also had a long-standing link to Muscat: the former prime minister said Tonna’s company handled his income tax returns between 2004 and 2008, when he was an MEP.
That private link, he said, should have no bearing on whether or not Tonna was suitable to sit on the evaluation committee. Tonna was qualified for that role, Muscat argued, and in any event was part of a broader team of 30 people and was not in a position to sway the committee’s final decision.
Questions about Tonna’s involvement only make sense “with the benefit of hindsight”, he said.
Muscat said he never had a relationship with Tonna’s Nexia BT colleague, Karl Cini.
The former prime minister sought, unsuccessfully, to steer questions towards allegations that his wife owned secret offshore company Egrant. But committee members did not bite, and as Carabott pressed the witness on Schembri’s testimony about Mizzi, the atmosphere in the room grew increasingly hostile.
Muscat will continue testifying at a later date, though it remains unclear when that will happen. Carabott said proceedings would continue in a week’s time.
“I’ll have to see if I’m available,” Muscat huffed as he gathered his papers and got up to leave the room.
As it happened
Live blog ends
4.27pm That's all from us today. You can find a summary of some of the day's key points at the top of this article. Thank you for having joined us, we'll be back when Muscat returns for round three of his PAC testimony.
'I can take you on anytime'
3.59pm The meeting ends on a sharp note, with Muscat criticising Carabott for chairing the meeting in what he believes is an overly partisan way, “as a knee-jerk reaction to last week”.
As tempers flare, Muscat bares his teeth. “I can take you on anytime and anywhere,” he tells the PAC chair. "I am not here to be your parrot."
Shades of Franco Debono's primetime TV clash with Lou Bondi here. Debono and Muscat were schoolmates, decades ago.
Time’s up and the session ends. Muscat will continue testifying, though we don’t know if it will be next week. “I’ll have to see if I’m available,” he says as he gathers his papers and prepares to leave the room.
Muscat's memory and Mizzi's assets
3.56pm Muscat confirms that he learnt of Konrad Mizzi’s involvement in the Panama Papers scandal “when it emerged in the public domain”.
But Robert Cutajar pokes a hole in that: he cites a 2016 Times of Malta article and says it proves that Muscat knew beforehand. In that article, Muscat said he knew of Mizzi’s New Zealand trust and Panama company in his parliamentary declaration of assets. Muscat blames the passage of time and his fading memory.
A question of interpretation
3.50pm Muscat confirms that Brian Tonna did not have an OPM office.
Carabott pushes him on Schembri’s recollection about Mizzi saying ‘‘I want to do what you do, because everything you touch turns to gold’. Does Muscat agree with a minister saying that sort of thing?
Muscat reads the transcript.
“That doesn’t necessarily mean he wanted to become rich. Maybe he just wanted to be an effective leader,” he says.
Bickering over print-outs
3.44pm Bickering between government and Opposition PAC members over emails published in news sites.
Muscat sits back in the chair, scratches his brow and watches the minutes slip away.
'Why no questions about Egrant?'
3.36pm Carabott tries to draw Muscat into commenting on remarks made by Konrad Mizzi and Keith Schembri during their testimony. But Muscat won't bite and insists everything depends on context.
[Schembri recalled that Mizzi told him ‘I want to do what you do, because everything you touch turns to gold’].
"I was not there for these conversations," Muscat says.
Muscat says he’s surprised committee members haven’t asked him about the allegations that he was involved in corruption in the project, through offshore firm Egrant.
“Somebody went to the trouble of forging signatures,” he says, citing the conclusions of an inquiry into the company.
Konrad Mizzi's 'obvious' Nexia link
3.34pm Muscat confirms that while he knew Keith Schembri made use of Nexia BT, he only learnt of Konrad Mizzi’s involvement with the firm after it became publicly known.
Carabott cites Schembri’s testimony – Schembri said it was “obvious” that Mizzi would use the firm, because both he and Muscat used the firm. Why would it be “obvious”, he asks Muscat.
Muscat keeps it vague. “You should ask him. All they did was file my income tax returns,” he replies.
3.28pm Muscat says he was introduced to Tonna by someone who was "not in politics" in the early 2000s. He never had a relationship with Tonna’s colleague Karl Cini, he says.
Brian Tonna filed Joseph Muscat's income tax returns
3.24pm Muscat denies that Nexia BT served as his auditors when he was an MEP – something Keith Schembri said during his PAC testimony. He says that he used Tonna’s company to file his income tax returns during the 2004-2008 period.
Muscat pushes back against the suggestion that Nexia BT had a conflict of interest “just because they filed my income tax returns 10-15 years before.”
A glitzy political show?
3.15pm Carabott cites an email by Electrogas comms director Catherine Halpin in which she said that a glitzy €100,000 public event to open the new power station was a purely political show.
Muscat says he disagrees with that assessment.
Committee meeting at OPM
3.13pm Carabott asks about attending evaluation meetings. Muscat says he never attended any. Nor can he say why Keith Schembri attended two meetings, or why one of the committee meetings was held at Castille (the Office of the Prime Minister).
Muscat says Konrad Mizzi had informed him that Electrogas won the project tender.
Who assumed the risk?
3.10pm Graham Bencini wants to know how, in Muscat’s view, Enemalta shifted risk onto the consortium. After all, the the take-or-pay requirement on the quantity of gas supply had increased from 65% to 85%.
Muscat cites the decision to package the provision of gas in the tender document and the benefits of economies of scale. And while the requirement rose to 85%, Enemalta was buying less gas overall and could sell excess on the open market.
3.04pm The Muscat social media blitzkrieg is back: whoever is managing his Facebook account is churning out posts with snippets of the PM’s testimony. They’re being lapped up, with overwhelming messages of support from his followers.
Whip takes a crack
3.02pm Government whip Andy Ellul tosses Muscat a softball. The former PM gladly catches it.
In the coming years, the government will increasingly issue tenders on a public-private partnership basis, Muscat predicts. But at the moment, it still does not have the capacity to fully go down that route.
Brian Tonna and Muscat's 20/20 hindsight
2.58pm Robert Cutajar steers the discussion back to Brian Tonna. Did Tonna’s nomination to the committee not raise a red flag in Muscat’s eyes, given his relationship to Mizzi?
Muscat: "With the benefit of hindsight, you might be right. In terms of competence, I don’t think anyone could object to Mr Tonna. Your question concerns his relationship [with Mizzi]."
Why did tender include supply of gas?
2.55pm The NAO raised a valid question in asking why the supply of gas was included in the tender document rather than tackled separately, Muscat concedes.
He says that decision was taken because Enemalta was in a precarious financial situation and therefore wanted the winning consortium to assume that risk.
Muscat and Enemalta's board
2.52pm Muscat is asked if he suggested people to sit on Enemalta’s board. He says he did, but he does not remember the names precisely.
He does, however, recall Lara Boffa, noting that she voted against the Electrogas deal.
Mizzi's push for Brian Tonna
2.47pm Carabott cites former Enemalta chairperson Louis Giordimaina, who told the PAC that Konrad Mizzi’s ministry had wanted Brian Tonna on the project’s evaluation committee.
Muscat again reiterates that he had no role in appointing committee members, which were, he believes, selected by Enemalta and the ministry.
Tonna was "one of 30 people, he certainly couldn't have changed the outcome", he says. "Every ministry, in every government, can propose names for evaluation committees. Names do not emerge from thin air. What is important is that people nominated are competent."
A Cachia Caruana comparison
2.44pm Carabott cites from the Caruana Galizia public inquiry, which concluded that Keith Schembri had a “free hand” to act within the top echelons of government and that a small clique held disproportionate power.
Muscat reiterates his “reservations” about that inquiry’s conclusions and then implies that a small clique controlling government is better than the PN equivalent, “when one man, Richard Cachia Caruana, decided everything.”
“I bow my head to its conclusions,” he says of the public inquiry, “but that does not mean I agree with its conclusions.”
Muscat denies influencing tender document
2.41pm Muscat says he did not have access to the tender document before it was issued. He also denies having recommended anyone to sit on the project’s RFP evaluation committee or having any sway in who won the tender.
Replying to a direct question, he also says he does not think Keith Schembri or Konrad Mizzi had any influence in who won the tender.
A heated moment
2.36pm Muscat’s PA Mark Farrugia scribbles a note for his boss. That prompts a reprimand from PAC chairman Darren Carabott, who says only the witness who is under oath can provide information.
Muscat pushes back and asks the chairman to cite which standing order states that.
“I am the one taking responsibility for what I say. There’s nothing wrong if my assistant reminds me of something that slips my mind.”
The temperature is rising in the room, and Muscat is getting heated.
“Dozens of witnesses appeared with lawyers, some had lawyers who answered questions on their behalf. And you’re objecting to this? You’re clutching at straws,” the former PM tells Carabott.
'Labour was never asked for a copy of MOU'
2.32pm Muscat says he has no reason to doubt the NAO’s version of events.
“I said that the consortium which approached the Labour Party may have presented a copy of the agreement to the NAO,” Muscat says. “The Labour Party was never asked to present this agreement [to the NAO].”
New Energy World also cited the MOU when it appealed a decision to eliminate it from contention for the power station project, he adds.
With regard to EC consultation concerning Gasol, that definitely happened, Muscat says, and the “competent authorities” should be able to provide more information about that.
NAO left in the dark about New Energy World MOU
2.23pm The committee also asked the NAO another question: does it have a copy of the pre-2013 MOU that the Labour Party signed with New Energy World?
The NAO says it does not.
Last week, Muscat said that he believed the NAO had seen the pre-electoral MOU. Labour members of the PAC also voted down an attempt to ask Muscat to present that agreement to the committee.
NAO has no documents about Gasol exit consultation
2.21pm PAC chairman Darren Carabott says he has received an email from the Auditor General, in response to a committee question.
The committee asked the NAO for information about consultation between the government and European Commission concerning Gasol’s exit from the Electrogas consortium.
Muscat said last week that the EC was consulted extensively about Gasol’s exit and that there was a paper trail to confirm that.
But if there was any correspondence between the two, the NAO was never informed of it: the auditor general says his office has no such records.
2.15pm PAC members are going through the motions at this stage, discussing emails the committee has sent out for more information concerning points of testimony made in previous weeks.
Muscat is still not in the room.
Hearing to begin
2.11pm After a short prayer, the PAC session can begin.
Where did it all begin?
2.07pm While we wait for the hearing to begin, it’s worth recalling where it all started: with an NAO report released in November 2018 which found, among other things:
- That the Electrogas bid did not comply with the project tender’s minimum requirements in “multiple instances”
- That a €360 million guarantee the government issued in Electrogas’ favour was “irregular” and exposed taxpayers to “significant risk”
- That a security of supply deal that bound the government to purchase a minimum amount of energy from the Electrogas deal transferred all business risk to Enemalta and the government (that’s you and me).
It took a further two years before the NAO report ended up on the PAC agenda. The committee began discussing the report and questioning witnesses in December 2020. We’re now two-and-a-half years into that process.
Muscat in parliament
1.53pm Muscat is in parliament - our videographer Jonathan Borg caught him as he entered the building.
1.50pm Hello and welcome to this live blog. We'll be bringing you minute-by-minute updates, in English, about Joseph Muscat's second appearance before parliament's PAC.