As the Panama Papers email printouts piled up in front of him, Joseph Muscat sat still, hand on chin.
Why, Public Accounts Committee chair Darren Carabott asked, had Muscat done so little after discovering that Konrad Mizzi and Keith Schembri set up offshore structures while in office?
But in the former prime minister’s telling, that was a “secondary issue”.
The main claim was that “I took money, and that Egrant was mine,” Muscat argued as he testified before the PAC for a third time on Tuesday.
“Just as they lied about me, I figured they might be lying about them too. I never took a cent.”
Muscat did not elaborate on that assertion. Claims that secret company Egrant was owned by his wife were made well over a year after the Panama Papers data leak exposed Mizzi and Schembri’s offshore dealings.
But the crux of that argument – that he had nothing to do with the Electrogas project that the PAC is probing – came to the fore several times during Muscat’s two-hour testimony.
Conversations with Yorgen Fenech
The former prime minister, who resigned in January 2020 after his self-described “friend” and Electrogas shareholder Yorgen Fenech was arrested in connection with the murder of journalist Daphne Caruana Galizia, insisted he never discussed the project with Fenech.
Throughout an ill-tempered PAC session that was peppered with snide remarks – “please teach us, Mr Chairman,” government MP Glenn Bedingfield told Carabott at one point – and bickering over the limits of the PAC’s remit, Muscat stuck to his line.
He said he had disciplined Mizzi by stripping him of his portfolio and assuming political responsibility for the work he did, Muscat said.
He had kept Mizzi on the Electrogas project because the project was too important to risk and he was “not spoilt for choice” when it came to cabinet talent up to the task. He kept Schembri because he “needed him” at that point.
And when, in 2017, the country went to the polls, Labour’s overwhelming victory meant the people endorsed those decisions, Muscat said.
At arm's length
As for the process that led to the Electrogas consortium being awarded the deal to build and operate a gas-fired powered power station, Muscat insisted he kept at arm’s length throughout.
He said he only met the consortium after the tender had been awarded, and that he and Lara Boffa never discussed her decision to vote against the Electrogas bid (Boffa was an Enemalta board member at the time).
Muscat said he had little knowledge of Gasol’s divestment from the Electrogas consortium and that the issue never reached cabinet.
But there was plenty of interest in the project, he said, and the government heard from “a number” of foreign investors that wanted in on it. One of those was former AC Milan president Paolo Scaloni, he acknowledged.
In the long run, the decision to buy gas at a fixed price worked out well, he argued, and Malta had “saved €30 million” by buying gas at lower-than-market rates last year. The National Audit Office, he said, should carry out a cost-benefit analysis of the project to date.
The suggestion was enthusiastically endorsed by government MP Clayton Bartolo.
Meanwhile, the PAC remained none the wiser about who advised Enemalta to go for a Floating Storage Unit to fuel the power station. That decision, Enemalta engineer Ryan Fava told the committee in writing, “cannot be attributed to any single person”.
Muscat will return to the PAC for a fourth round of questioning. When that will be remains to be seen.
"You can question me on the beach," Muscat joked as he prepared to exit the committee room for a third time.
That's all, folks
4.02pm The hearing is over, though Muscat will be back for round four. Not next week, though - Muscat says he'll be on a beach.
That's all for this live blog, thank you for having joined us. We'll have a wrap-up of the day's key points of testimony available at the top of this article shortly.
An introduction to AC Milan boss
3.56pm Did Muscat know that Fenech was looking for investors to replace Gasol?
Muscat says he knew that foreign investors – investment funds – were interested in buying the project.
He confirms a February 2021 Times of Malta report which revealed that he introduced Fenech to the then-president of AC Milan, Paolo Scaloni, about a potential investment into the Electrogas project.
Muscat says he had also told Fenech that this was a purely commercial issue that he was not going to get involved in. He says he can't remember when he introduced Fenech to Scaloni.
Muscat's friendship with Yorgen Fenech
3.51pm Muscat is asked about Yorgen Fenech. He says he got to know him in “around 2009”. At the time, The Fenech family was concerned about its investment in the Arriva bus service, he says.
He describes the relationship between himself and Fenech as one “of friendship”.
Muscat says he never discussed 17 Black with Fenech. (Times of Malta exposed him as the company’s owner in November 2018). Nor did the two ever discuss Electrogas (which Fenech was a shareholder in).
Mizzi and Schembri: two weights, two measures?
3.48pm Carabott is ploughing on, citing email after email concerning Mizzi and Schembri that were made public in the Panama Papers data leak.
“It’s a monologue,” Muscat says, hand on chin. “You didn’t ask me a single question about myself. Because I have nothing to do with this,” he says.
Muscat continues: “I stripped Mizzi of his ministerial portfolio. Maybe you think that’s not enough. But we had a general election, and people thought otherwise.”
What about Keith Schembri? “I was responsible for him, and I felt I needed to keep him. And I assumed political responsibility for it.”
Muscat's reliance on Mizzi
3.38pm But why did you keep Mizzi on as a minister, Graham Bencini asks.
“Because that was my prerogative,” Muscat says. He says the Electrogas project was too important to risk, and Mizzi was “the best person to lead it”.
Nobody else in cabinet could have done the same job he did, he says.
"And then we won an election by 40,000 votes. People agreed with me," he adds.
'PN was aiming for a Malta bailout'
3.32pm Carabott is piling up the paperwork here, tossing documents related to Mizzi and Schembri’s offshore structures in front of Muscat.
“Didn’t any of these set off alarm bells?” he asks.
Muscat: “Alarm bells went off when I saw Enemalta drowning in debt,” he says. “The Opposition plan was for Enemalta to fail, BOV to go down with it, our financial system would fail and we would get a bailout.”
The former PM insists he answered all questions about the Panama Papers in the past. He also talks up the repercussions Konrad Mizzi faced after that leak
"He lost the PL deputy leader post and I stripped him of his ministerial portfolio," he says. "I was politically responsible for his work. It's not correct to say nothing happened."
Asking NAO for a cost-benefit analysis
3.27pm Clayton Bartolo asks for the committee to take up Muscat’s suggestion and ask the NAO to carry out a cost-benefit analysis of the Electrogas deal to date.
Carabott reminds him that all he needs to table the request are three votes (and the government has four).
Living up to PAC standards
3.25pm Shots fired at Beppe Fenech Adami.
Muscat tells Carabott that he is not living up to the standard of previous PAC chairs, and rattles off a list of previous incumbents.
Carabott notes that he left out his predecessor, Beppe Fenech Adami.
“I was paying you a compliment,” Muscat shoots back.
'Malta saved €30m last year'
3.20pm Clayton Bartolo asks how the civil service reacted to being told that the gas-fired power station project would be operated as a public-private partnership.
Muscat says the civil service still struggles to handle PPPs, and uses the opportunity to say the NAO should carry out a new investigation into the Electrogas power station’s cost-benefit analysis.
A fixed purchase price deal that was hurting Malta when the NAO looked into the project ended up benefiting the country when gas prices shot up last year, he says. “The country saved €30m last year alone.”
'I never took a cent'
3.10pm Muscat says Schembri and Mizzi both assured him that they would not be taking money from the Electrogas project.
Carabott notes that their offshore structure paperwork said the structures would start doing business “immediately”.
Muscat responds with a puzzling bit of logic. “The premise was that I was going to be taking money. If I wasn’t going to be doing so, I assumed they wouldn’t either. I never took a cent,” Muscat says. “Just as they lied about me, I figured they might be lying about them too.”
(Daphne Caruana Galizia first alleged that Egrant was owned by Michelle Muscat in April 2017, well over a year after Mizzi and Schembri's offshore structures were first exposed).
The limits of the PAC
3.05pm The hearing is devolving into a meta-discussion about the PAC and its remit.
Robert Cutajar reads from a ruling which states that members are free to ask the questions they believe are valid. Government MPs say Cutajar is selectively quoting - the ruling also states that questions must be asked “objectively”, they say.
And Muscat says the PAC is specifically looking into the NAO report into the Electrogas project. “If you don’t like my answers, please respect that. Don’t tell me I’m not replying, just because you don’t like my answer,” he says.
Mizzi and Schembri's interesting timing
3pm Carabott wants to know if Muscat challenged Mizzi and Schembri after he learnt that they opened their offshore structures at the same time.
“I made my assessment and carried political responsibility for it,” Muscat tells him.
2.58pm Now it’s Carabott’s turn to get heated. Andy Ellul asks for the source of an email he is reading out, and the question irritates the committee chair.
“Calm down,” Ellul tells him. “I’m just asking for the source of the email.”
'Claims about Mizzi and Schembri were secondary'
2.56pm Carabott asks Muscat what his government did to assure itself that Keith Schembri and Konrad Mizzi were not profiting from the Electrogas deal.
Muscat dodges that question and says those allegations were “secondary”.
The main claim was that “I took money, and that Egrant is mine,” he tells the committee.
Carabott pushes, and Muscat says he spoke to Schembri and Mizzi following the Panama Papers leak. Both gave their reasons, he says.
Success fees and development fees
2.53pm Carabott asks Muscat about suggestions that success fees to be paid for the project would be changed to ‘development fees’.
Muscat says he doesn’t understand the implication of the question and that ultimately the money being paid out came from a private company (Electrogas), not public funds.
A 'hogwash' link
2.49pm Carabott cites a 2016 Times of Malta article in which Muscat dismissed suggestions of a link between Gasol’s exit and Konrad Mizzi’s offshore structures as ‘hogwash’.
Gasol divested on the same day that Mizzi transferred his Panama company to his New Zealand trust.
Muscat says he still believes there’s no link.
2.42pm Government MPs are especially feisty today.
We’ve heard Bedingfield call someone ‘pastaz’ (rude) and sarcastically address the chairman, Clayton Bartolo tell the chairman “I’m not your postman” and Andy Ellul tell Opposition members they “should be ashamed of themselves”. Alex Muscat is the only one to stick to a measured tone so far.
Gasol's exit and Enemalta's advice
2.38pm Carabott cites the NAO report, which says Gasol’s exit from the consortium constituted a breach of contractual obligations.
Muscat says Enemalta’s legal advice was different. Carabott asks for a copy of that advice. “You’d have to ask Enemalta,” Muscat replies.
He then clarifies to say he does not know if Enemalta has any written advice to that effect. "It's what I was told," he says.
Electrogas and Gasol
2.33pm "I met the Electrogas consortium after it was granted the deal," Muscat says. "It was not a formal meeting."
He cannot specify exactly when the meeting took place, limiting himself to saying it was ‘after’ they won the tender.
Muscat is asked about Gasol's exit from the Electrogas consortium (due to financial troubles). He says he was not involved in the matter and learnt when the news became public.
Answering a question from Robert Cutajar, he says the Gasol issue was never discussed at cabinet level.
'Please teach us, Mr Chairman'
2.28pm Muscat is again contesting the questions being asked, arguing that the PAC’s remit is restricted to probing the NAO report.
Carabott says the witness is free to decide which questions he wishes to answer – and that sparks bickering between himself and government MP Clayton Bartolo.
Carabott repeats the question - when did Muscat first meet the Electrogas consortium?
Before the witness can reply, government MP Glenn Bedingfield sarcastically interjects to ask Carabott to explain how the question refers to spending on the project. "Please teach us, Mr Chairman," he says.
Lara Boffa and her vote
2.25pm Muscat says he never – to this day – discussed Lara Boffa’s decision to vote against the Electrogas bid.
He says he knows her socially but never spoke about that with her.
Boffa was the only member of the Enemalta board to vote against the Electrogas bid.
Konrad Mizzi came recommended
2.24pm We’re off to a prickly start – Muscat tells Carabott that his first question – ‘what made Konrad Mizzi the most competent person to lead the energy project?’ – falls outside the PAC’s remit. The PAC is not tasked with probing policy decisions, he says.
“But I will answer the question anyway,” Muscat says.
He says Mizzi came highly recommended, was a Big Four employee in London and people spoke highly of his project management skills.
Muscat takes a seat
2.20pm Joseph Muscat takes a seat. He's accompanied, as in previous hearings, by his assistant Mark Farrugia.
Who pushed for an FSU?
2.16pm Two weeks ago, the PAC resolved to ask Enemalta who recommended that the Electrogas power station implement a Floating Storage Unit.
The answer: nobody knows.
Enemalta engineer Ryan Fava wrote to the PAC, telling it that the decision “cannot be attributed to any single person”. He also noted that he was not an Enemalta employee at the time.
Watch Anġlu Farrugia erupt
2.12pm Parliament’s PAC has not yet started, but if you’re thirsting for parliamentary drama, you could do worse than watch Speaker Anġlu Farrugia angrily order Karol Aquilina out of the House yesterday.
Muscat in parliament
2pm The PAC will be in session any minute now - Muscat, sporting a light blue tie and dark suit, entered parliament building just over five minutes ago.
Who's on the PAC?
1.56pm Seven MPs sit on the Public Accounts Committee, with the government getting four members and the Opposition three. The latter, however, gets to select a committee chair.
Opposition members: Darren Carabott (committee chair), David Agius (replaced by Robert Cutajar) and Graham Bencini.
Government members: Glenn Bedingfield, Clayton Bartolo, Andy Ellul and Alex Muscat.
1.52pm Hello and welcome to this live blog. We’ll be bringing you minute-by-minute updates of Muscat’s testimony to the PAC.