Joseph Muscat was wired tens of thousands of euros in "consultancy fees" from a Swiss company that received millions from Steward Healthcare during the firm’s takeover of the VGH hospitals deal.
The former prime minister was paid a total of €60,000 to his Bank of Valletta account last year, the first payment taking place just two months after he stepped down, an investigation by Times of Malta has found.
The money was split across four monthly payments, two from Accutor AG and two from Spring X Media.
Both these companies were run by lawyer Wasay Bhatti and share an address in Switzerland.
Swiss banking and accounting records reviewed by Times of Malta show Steward Healthcare wired amounts totalling €3.6 million to Accutor.
It paid the bulk of them – €2.49 million – on February 20, 2018.
This was the same day that the American healthcare company issued a statement declaring it had finalised the public-private partnership to take over the running of three of Malta’s hospitals from Vitals Global Healthcare (VGH).
Muscat was quoted in the statement issued by Steward that day as saying: “Steward Healthcare shares our same vision for the future of healthcare in Malta”.
Muscat’s consultancy deal
Times of Malta’s investigation has uncovered how Accutor AG acted as a fulcrum for several payments involving certain figures in the VGH deal with Steward.
The Accutor AG payments to Muscat were made under the terms of an indefinite consultancy contract drawn up between himself and Spring X Media in February 2020, just one month after he resigned as prime minister.
According to the Financial Action Task Force, a global anti-money laundering body, consultancy agreements can be used as a tool to obscure the real reason behind transactions.
Muscat denied any wrongdoing when contacted by Times of Malta. He insisted the payments were for work that was documented, fully invoiced, declared and paid in Malta.
Steward Healthcare did not respond to multiple requests for comment about the purpose behind the money transfers to Accutor AG.
‘Indefinite’ contract worth €15k monthly
The first €15,000 payment made its way to Muscat’s account in March 2020, with three more transactions made in the following months.
The money netted Muscat the equivalent of a year’s salary as prime minister in the space of a few months.
Two of the initial payments came from Accutor AG, while the other two were wired to Muscat from Spring X Media.
Spring X Media is registered at the same Swiss address as Accutor AG, and the two companies carried out transactions between each other.
Accutor describes itself as a global management company offering payroll, contracts and legal services, while Spring X Media says it provides analytics services.
Despite the indefinite nature of the consultancy contract, the payments to Muscat halted abruptly in summer 2020.
Accutor AG has since declared bankruptcy and Spring X Media is under liquidation.
Swiss corporate records reviewed by Times of Malta uncovered another company that used to go by the name VGH Europe registered at the same addresses as Accutor AG and Spring X Media.
Bhatti, Muscat deny wrongdoing
Bhatti rejected any suggestion of wrongdoing when contacted by Times of Malta but he did not respond to questions about his relationship with the former prime minister.
Two of Bhatti’s ex-partners, former Accutor AG directors Kamal Sharma and Tyrone Greenshield, told Times of Malta they “remain at the disposal” of any authorities wishing to investigate Bhatti.
The pair say they resigned from Accutor AG in the summer of 2019 after growing suspicious about Bhatti’s activities.
Their resignation pre-dates the Accutor AG transactions to Muscat.
In a statement to Times of Malta, Muscat said that while, as any private service provider, he is generally not at liberty to discuss engagements following his exit from politics, he can confirm having met Bhatti some years back as an investor with an office in Malta.
The former prime minister said he was approached by Bhatti to carry out consultancy assignments after leaving office.
Muscat was still an MP at the time of the payments.
“This work dealt with a number of projects in various sectors and regions. None of these were government related in Malta.
“My engagement, compensated at a rate commensurate to similar advisory roles, ran for less than six months. The work was documented, duly invoiced, declared, and paid in Malta.
“From your questions, I understand that this engagement was not part of any accusations being made by Mr Bhatti’s former partners, about which I am learning from yourself.
“Kindly also note that I do not have any relationship with VGH, Steward or any of the companies you mention in your questions”, Muscat said.
Steward payments coincide with sellout
The payments wired by Steward Healthcare to Accutor AG coincide with the American company’s takeover of the controversial Vitals Global Healthcare hospitals concession.
These payments were made by Steward to Accutor AG weeks after the December 2017 government announcement gave its blessing for the concession to be transferred from VGH to Steward.
Steward wired €3.2 million to Accutor AG between January and March 2018, including the payment of €2.49 million on February 20 and another payment of $514,000 (€445,000) that same month.
Further payments amounting to €400,000 were made between July and October of that same year.
Public records show Accutor first established a Malta presence in 2017, setting up an Accutor branch in Ta’ Xbiex, a stone’s throw away from where VGH Malta used to be based.
Two former Accutor officials, who decline to be named, said Accutor’s Maltese branch had won a private contract worth €14,000 per month to calculate payroll for nurses at the three hospitals run by VGH.
The contract, the sources said, was simply for Accutor Malta to compute the monthly salaries of these nurses, therefore the millions transferred by Steward to Accutor’s Swiss accounts appear to be outside the scope of this contract.
The Accutor payroll contract was later terminated by Steward.
Accutor AG’s UBS banking records show that certain individuals in the VGH deal, including investor and Maltese passport buyer Shaukat Ali, his son Asad, and Bluestone Investments, the main company in the Malta VGH ownership structure, received payments from Accutor AG throughout 2018.
Bluestone Investments director Ram Tumuluri, Shaukat Ali and his son denied any wrongdoing when contacted about their relationship with Accutor AG, insisting all transactions involving Accutor AG were above board.
UBS Switzerland declined to comment on “potential existing or former client relationships” when contacted by Times of Malta about Accutor AG’s activities.
Former PM’s Swiss rendezvous
A report by UK-based corporate intelligence firm Tacet Global, which investigated Bhatti’s activities, said at least one senior Maltese politician had visited Accutor’s Swiss offices.
Times of Malta independently confirmed that Muscat flew to Switzerland to meet Bhatti mere weeks after resigning as prime minister, visiting Accutor AG’s Swiss offices in the process.
Swiss corporate records show those same offices also played host, on paper, to a company called Spring Healthcare.
Spring Healthcare describes itself on its website as a “clinical partner” of Steward Healthcare.
An investigation by the Organized Crime and Corruption Reporting Project (OCCR) last year found Spring Healthcare had sold faulty COVID-19 testing kits to North Macedonia.
Muscat’s relationship with Bhatti pre-dates his resignation as prime minister and the consultancy contract, with the pair having become acquainted in 2017 following a visit by Bhatti to Castille.
A former Accutor Malta employee, who preferred to not to be named, said Bhatti would brag during his visits to Malta about his proximity to Muscat and the former prime minister’s chief of staff Keith Schembri.
The Yorgen Fenech connection
Schembri appears to have shared Bhatti’s contact with his good friend Yorgen Fenech, who has been charged with complicity in journalist Daphne Caruana Galizia’s murder.
Three weeks after Times of Malta and Reuters outed Fenech as the owner of the 17 Black, Fenech reached out to Bhatti, asking for his help to set up “discreet” corporate structures so he could move money out of the Ajman region, where 17 Black was registered.
Fenech indicated in the e-mail that he had been referred to Bhatti by a “common friend from Malta”.
The Tumas magnate told Bhatti he wanted to set up a structure which would give a certain level of discretion and peace of mind. He detailed plans to set up two new companies, one of which would be funded by 17 Black.
The e-mail to Bhatti detailing Fenech’s plans for these post-17 Black “discreet structures” was also separately sent by Fenech to Schembri.
Schembri did not respond to a request for comment by Times of Malta about the nature of his relationship with Bhatti.
A report by the Auditor General found Schembri had “convened” a meeting with the original VGH investors at the prime minister’s office prior to the signing of a memorandum of understanding with the government, which took place five months before the hospitals concession was even put up for tender.
The Auditor General has pointed towards the existence of this memorandum of understanding as a strong indication the concession appeared to be “predetermined to ensure an already agreed outcome”.
It was slain journalist Daphne Caruana Galizia who first made the call that the tender had been “fixed” in VGH’s favour, prior to the Projects Malta tender documents even being published.
Former opposition leader Adrian Delia is currently battling the government in court to have the concession contract rescinded.
Muscat: Payments were for assignments carried out over a number of months
In a new Facebook reaction on Sunday, Joseph Muscat said he did not have qualms in replying to the questions from Times of Malta if in the public interest and without infringing on commercial interests of third parties.
Nevertheless, he said, the headline did not say that he carried out work for this company, but rather that he was wired money. It implied that he was given money for nothing or as supposed compensation for a transaction worth millions.
He insisted that the payments he received for assignments carried out over a number of months was nowhere near these amounts.
He reiterated that the work he carried out over a number of months was not in any way related to projects related to the Maltese Government. It was spread over a number of countries, in different sectors, and was fully documented.
"All work and payments are fully declared, not as in the case of those who tried to rush and regularise their position with the tax authorities overnight because they were entering politics," Muscat said.
He said he also did not do like those who first negotiated on behalf of government on large scale deals, and then went to lead the entity on the other side of the table.
"There are some who will never forgive me for helping bring about change in the country. They believe that I do not even have the right to work. But the more they insist, the more it is clear that these people still cannot offer an alternative for the country."