Former minister Konrad Mizzi refused to answer questions about a deal to privatise three state hospitals for fear of self-incrimination when he testified in court on Monday.
Mizzi, a former Labour minister who now sits in parliament as an independent MP, declined to answer a flurry of questions about the controversial deal, which former Opposition leader Adrian Delia is seeking to have revoked.
He instead met each question with the stock phrase “I choose not to reply”, with his lawyer Carol Peralta telling the court he had advised Mizzi not to testify at this stage, as he had not been given full disclosure in ongoing magisterial inquiries into the deal.
Judge Francesco Depasquale noted that Mizzi had already testified in this case in November 2019 and that his right to not reply only extended to questions which might lead to self-incriminating answers.
But despite that legal direction, the witness stuck to his script, reading out a brief prepared statement in which he insisted he “did everything in the best interests of the people” and said that cabinet ministers had approved “at least” 14 different decisions related to the project.
“I want to declare that cabinet had approved the project and it used to be regularly updated in detail about developments, the progress of negotiations and the progress of the works in the months and years that followed, both at the time of VGH and later when Steward were involved,” Mizzi said.
As he testified, a copy of that statement was published to his public Facebook page.
Mizzi’s taciturn testimony mirrored that which he gave to a public inquiry into the assassination of journalist Daphne Caruana Galizia last November. There, too, the former minister had refused to answer questions, citing similar reasons.
Monday’s court case, filed by former PN leader Adrian Delia, is seeking to have the 30-year deal to privatise St Luke’s, Karin Grech and Gozo General Hospitals revoked. The court has heard from several key witnesses, including former prime minister Joseph Muscat and former finance minister Edward Scicluna.
While Muscat testified that everything related to the deal went through cabinet, Scicluna testified that he only learnt of a €100m side letter after it had been signed. The side letter guaranteed the concessionaires a €100m payout if the deal was rescinded.
Testifying on Monday, Mizzi said he "obviously" had cabinet approval for the side letter.
Ronald Mizzi presents copy of €100m agreement
Tourism Ministry permanent secretary Ronald Mizzi, who presented the court with a copy of that side letter, said that the €100m guarantee was essential to keep the hospitals privatisation deal afloat.
Bank of Valletta was not comfortable lending money without some form of security, while Steward Health Care - which took over the hospitals contract from original concessionaire Vitals Global Healthcare - wanted to ensure they were not exposed if the 30-year deal was rescinded by the government or law courts.
Ronald Mizzi told the court that he was not involved in talks concerning the €100m agreement and learnt of it through a cabinet memo distributed the same month it was signed, in August.
The National Audit Office had concluded in 2020 that Vitals should have been barred from bidding for the hospitals contract, as there was evidence of collusion to ensure it won the bid, in the form of a secret Memorandum of Understanding which predated the tender.
Mizzi and former prime minister Muscat have both testified that the MOU presented a different proposal which was not deemed feasible.
That NAO report had also highlighted a “grossly inadequate” due diligence process, with the blame resting “squarely” on minister Mizzi’s shoulders.
Mizzi was kicked out of the Labour Party in June 2020 following Times of Malta revelations about a separate scandal involving him, concerning an Enemalta deal to buy an overpriced wind farm in Montenegro.
Vitals Global Healthcare went on to sell the hospitals concession to US company Steward Health Care. The government is now in talks with Steward to see how it can regain control of St Luke's, Karin Grech and Gozo General hospitals.
Konrad Mizzi leaves Valletta following his court appearance. Photo: Mark Zammit CordinaLive blog
Live blog ends
2.25pm This live blog will end here. We have included a summary of the court hearing's key points at the top of this article.
Thank you for having joined us.
Konrad Mizzi ends testimony
2.03pm Judge Depasquale asks Mizzi whether the magisterial inquiries he mentioned were already ongoing when he last testified in this case.
Mizzi: “I’m not sure”.
The MP and former minister is done testifying. He’s allowed to leave.
His lawyer Carol Peralta asks whether he’ll be asked to testify again.
Debono says there’s no point, given his stock replies.
The case is adjourned to March 1.
Playing to the gallery
2pm Debono: “Why must we pay €70 million if Delia wins this case?”
Peralta interjects: “This is playing to the gallery!”
Debono: "Don’t you consider yourself somewhat presumptuous and bad-mannered to sign this side agreement once this case was already ongoing?"
Mizzi declines to answer and repeats that he is willing to testify once magisterial inquiries are concluded.
'Obviously I got cabinet approval'
1.54pm Debono asks about the side letter. Did Mizzi sign it?
Mizzi looks at the document and then says “obviously I got cabinet approval”.
Debono: Why did the government have to bind itself in this way?
Mizzi: There is an ongoing magisterial inquiry into this. Three ministers are involved. I did nothing wrong.
More questions
1.49pm Debono asks Mizzi about what Edward Scicluna testified – that the side letter did not go to cabinet.
“I choose not to reply.”
He asks Mizzi about the request for proposals and says Vitals had it all sewn up from the start.
“I choose not to reply.”
More questions from Debono:
The evaluation committee members said they did not carry out any due diligence. Why was the deal given to people with no medical experience?
Why did you authorise the transfer before milestones had been achieved?
Was cabinet aware?
You said cabinet took 14 decisions, Muscat said there were two and Scicluna said none. Who do we believe?
Did parliament know about this?
A repeat performance
1.44pm This is becoming rather farcical.
Debono asks questions. Mizzi replies by saying “I choose not to answer”. And Debono then adds “...because you might incriminate yourself”.
It’s the same thing, over and over again, even when the witness is asked about things he has already testified about previously.
This is turning out to be a repeat of Mizzi's appearance before the Caruana Galizia inquiry last November.
'They want to make this torture'
1.40pm Debono: Did you meet Ram Tumuluri?
Mizzi: “I choose not to answer.”
Debono: "Does that incriminate you?"
Judge Depasquale again points out to Mizzi that he had already testified in this case.
Mizzi: “They want to make this a torturous event, your honour. I have no problem returning once the inquiries are over.”
'...for fear of self-incrimination'
1.33pm Debono asks, again, about the MOU.
Mizzi: “I choose not to answer”.
Debono: You have to add “... because it is self-incriminating”.
Mizzi: I have given a statement. I now choose not to testify, pending other proceedings.
Debono: You cannot. You are an ordinary citizen and don’t set procedure.
Mizzi: I would rather choose not to testify. But if you want me to say “for fear of self-incrimination after each answer, I will.”
'My rights are being violated'
1.29pm Konrad Mizzi says he feels his rights are being violated.
The situation heats up as Debono expresses outrage.
Delia tries to restore some calm. He says the witness cannot be assisted and does not have a blanket right to choose not to testify. He must be directed by the court.
"That's right," the judge says.
Judge spells out the rules
1.23pm Debono is asking questions, and Mizzi is choosing not to answer.
Was medical due diligence by Projects Malta to be handled by the health ministry?
“I choose not to reply”.
Projects Malta representatives have testified that they were simply pushing papers for this project.
“I choose not to reply”.
How was Chris Fearne’s ministry involved?
“I choose not to reply”.
Did you see the MOU signed by Chris Cardona?
“I choose not to reply”.
When did you get to know of the MOU?
“I choose not to reply”.
Judge Depasquale notes that Mizzi has already testified about some of these things in the past. He tells the former minister that he has the right to not answer self-incriminating questions only.
"If I ask you whether it rained this morning, would that incriminate you?" he asks the witness. "You have already testified about these questions, so if there is anything self-incriminating that you... how shall I put it?"
'I choose not to reply'
1.20pm Debono asks his first questions.
Mizzi replies in the same way to both.
“I choose not to reply”. (Nagħżel li ma nweġibx).
14 cabinet decisions
1.18pm Mizzi reads out his statement at full speed.
Three bids were submitted and the evaluating committee listed the favoured bidder. Cabinet approved that. There were 14 cabinet approvals following full briefings, he says.
“I can confirm that my fellow ministers attended and participated, although cabinet minutes are secret,” he says.
Mizzi reads out statement
1.15pm Konrad Mizzi reads out a statement he has brought with him.
He says he did nothing wrong and “always did everything in the best interests of the people”.
He says he had been directed by the then-prime minister (Joseph Muscat) to have the Gozo hospital rebuilt, and he got to know of the MOU signed by “these investors” (Vitals).
The government felt the project as outlined there was not feasible, so it went for a public call. The project was announced publicly and received positively by the Opposition, Mizzi says.
'Uncomfortable'
1.12pm Mizzi’s lawyer Carol Peralta wants it minuted that his client may choose not to answer questions “if he feels uncomfortable”, given that ongoing magisterial inquiries may lead to criminal proceedings.
That prompts uproar from Delia, who argues that nobody would testify in this case by that measure.
Witness 'must continue testifying'
1.06pm Judge Depasquale: the witness has already testified in this case and must therefore continue. He may choose not to answer any self-incriminating questions.
'We have advised Mizzi not to testify'
1.02pm His lawyer Carol Peralta has something else to note: Mizzi is facing a number of magisterial inquiries of which he was not given full disclosure, Peralta says.
"So at this stage, we have advised him not to testify," Peralta says. "He will give his version, but not here for now."
Debono smiles and says Konrad Mizzi has already testified in this case. Judge Depasquale confirms that.
Reminder: Konrad Mizzi had testified in this case in November 2019, on a crisis-wracked day which, among other things, saw him resign from cabinet.
Konrad Mizzi on the witness stand
1pm Konrad Mizzi is at the witness stand. He immediately points out that last time he was not served with notice of summons.
"The media reported that I didn’t come," he says.
'I have no visibility'
12.57pm Lawyer Edward Debono is pushing the witness to admit that targets were missed and that work on the hospitals was not done.
Ronald Mizzi again insists he had no oversight on those works.
The witness is allowed to step off the stand but is asked to wait outside, in case the court needs to call him back in following Konrad Mizzi's testimony.
Any clauses binding Vitals/Steward?
12.53pm Debono presses: Vitals or Steward did not achieve certain milestones. Did they bind themselves under some similar financial obligation?
Mizzi: "It doesn't seem to be the case, according to these agreements."
The witness argues that the Barts medical school was completed.
Debono: What about St Luke's, with rats running all over the place? And what about Karin Grech?
"I don't have visibility on that work," Mizzi replies, saying that management of the contracts was passed on to the health ministry.
"There were teams and monitoring committees to oversee the project, and we were not involved there," he says.
Why €100m?
12.49pm Debono asks: The agreed loans were for €3, €5m and €22 million from BOV –roughly €30m in total. So why did the side agreement guarantee a further €70m over and above that amount?
One could perhaps justify a guarantee of the BOV loans, but not the other €70 million, he says.
Mizzi refers to the risk of the contract being rescinded by the government or court. Steward were concerned that they would end up exposed, he says.
No loan, no deal
12.46pm Had the guarantee not been given, BOV would not have lent money and the concessionaire would have been in default, Ronald Mizzi concedes.
Delia notes that this court case had already started when the side letter was signed.
Mizzi says that was the reason for it - as a safeguard in case the contract was annulled.
Adrian Delia (left) enters court on Monday. Photo: Mark Zammit CordinaSpeaking to legal counsel
12.44pm Delia asks Mizzi if he found out about the €100m side letter through the media.
He says no. He learnt of it through a cabinet memo that same month, in August.
Delia: So you found out when it was a fait accompli. You realised through the memo, not because the minister told you.
Mizzi says that it was cabinet, not the minister, who entered into an agreement.
He adds that the first thing he did after reading the memo was speak to legal counsel, although he then corrects that and says someone else spoke to the lawyer.
“Legal counsel assisted throughout. She reported that BOV were not comfortable (with the loan) unless some security was provided.”
Mizzi says there was a “critical need” for Vitals to get the bank loan, to allow it to build the Barts Medical School. The €100m guarantee was a compromise solution following talks.
Who spoke to the government?
12.37pm Delia asks whether it was BOV, Steward or Vitals that spoke to the government about getting it involved.
Mizzi says he was not present for those meetings. The government was represented there by a lawyer.
Delia: Didn’t he report back to you? Weren’t you the top official in that ministry? Who briefed legal counsel? He didn’t just wake up one fine day and say ‘I’m off to speak to BOV’.
Mizzi: Perhaps he went to the minister.
Delia: Who was the minister?
Mizzi: Konrad Mizzi.
Delia: Did he speak to you about this?
Mizzi: I don’t think so.
Government's involvement in loan
12.34pm Delia wants to know: how did the government get involved in a private loan? What pushed it to enter into an agreement for something it was not involved in?
Ronald Mizzi: They needed security, in case there was a change of government and contracts were terminated, or some other event arose. The government’s concern was that the project might not be fulfilled.
Adrian Delia's questions
12.27pm Nationalist MP and former Opposition leader Adrian Delia, who filed this case, has some questions about the agreement.
He says Bank of Valletta needed a credit guarantee to provide Steward with credit facilities. Steward complained about bearing the brunt, so it was agreed that the government would make good for any non-ratifiable event.
Delia asks whether BOV was involved from the outset, when the concession belonged to Vitals Global Healthcare.
Ronald Mizzi says he does not think they were.
'Many agreements'
12.24pm Ronald Mizzi is asked whether the side letter he is presenting is the only one that was signed.
He says it “depends on the context” and that there were many agreements.
Lawyer Edward Debono asks him to present a copy of all side letters signed from the time of the original contract in 2015 up to the present day.
"I've already handed them to the magisterial inquiry," he says.
"They'll be presented here too," Debono replies.
Mizzi will have to present these documents when the court holds its next hearing in the case.
€100m side letter
12.21pm Ronald Mizzi has been summoned to present a side letter featuring the €100m termination clause that has prompted such discussion during this case.
He says the clause was an “agreement signed between the parties” and not an addendum to the contract. Mizzi has a copy of it with him – the original was handed to a magisterial inquiry looking into the deal, he says.
Konrad Mizzi's permanent secretary
12.18pm Ronald Mizzi takes the oath and begins his testimony.
He has served as a permanent secretary since 2014, first at Konrad Mizzi’s Energy Ministry and then at the Tourism Ministry since June 2017 (when Konrad Mizzi was made Tourism Minister).
Ronald Mizzi summoned
12.15pm The judge takes note of who is present and begins the hearing.
The first witness will be Ronald Mizzi, who serves as permanent secretary at the Tourism Ministry.
Mizzi's last court appearance
12.12pm The last time we saw Konrad Mizzi in court, the former minister was as taciturn as they come.
It was late November 2020 and Mizzi was appearing as witness in the Daphne Caruana Galizia public inquiry. He was asked more than 100 questions but answered almost none of them, saying before his appearance that Opposition MPs were using the inquiry for their partisan political reasons.
Who's in court?
11.58am The court is currently hearing other cases, but participants are already filing in.
Mizzi is here, as are his lawyers, former magistrate Carol Peralta and Jean Paul Sammut. He's seated in the front bench, with each lawyer on either side of him.
State advocate Chris Soler is present.
Adrian Delia has lawyers Edward and Nick Debono with him.
Judge Francesco Depasquale will be presiding.
What happened last time round?
11.52am The case heard from another high-profile witness when it last held a session last month - former prime minister Joseph Muscat.
Muscat defended the Vitals deal, arguing that it made sense to privatise the state hospital and that nothing was signed or approved with cabinet's approval.
He also claimed that the €100m clause was included as a way to guarantee a bank’s loan without violating EU state aid rules.
Read more from Muscat's testimony last January.
Welcome
11.49am Hello and welcome to this live blog. We're at the Valletta law courts, where Adrian Delia's case to revoke the Vitals deal is to continue.
Konrad Mizzi - who missed his two previous court appointments in this case due to COVID-19 quarantine - will be testifying today. He's been spotted entering court.
We also expect to see auditor-general Charles Deguara in court. The NAO chief has been asked to present a copy of a document featuring a controversial €100m termination clause for the hospitals deal. The penalty is payable if the government prematurely ends the 30-year contract.
Edward Scicluna, who was finance minister at the time when the deal was signed, testified that he did not know about the clause until after it was signed.