The police have revoked bail granted last December to tax chief Marvin Gaerty, following his interrogation over chats with murder suspect Yorgen Fenech.
Gaerty’s lawyers Franco Debono and Amadeus Cachia confirmed when contacted on Saturday that their client had been called by the Financial Crime Investigation Department and told there was no need to report at their offices for an appointment he had been given for Monday.
They confirmed that Gaerty, who has continued to perform his role of tax chief, was told that he was no longer on police bail although investigations were continuing.
The Inland Revenue Commissioner had been questioned by police on December 22 as part of an investigation into trading in influence involving the businessman who stands accused of conspiring to murder journalist Daphne Caruana Galizia.
Text messages with Fenech
Financial crime investigators had been looking into a 2014 message exchange between Gaerty and Fenech, following an analysis of Fenech's mobile phone.
The issue revolves around a conversation Gaerty and Fenech had over an outstanding VAT issue, sparking an investigation into possible trading in influence.
VAT inspectors had found irregularities following an inspection at the Portomaso tower in St Julian's, where the Fenechs’ Tumas business empire is based.
Despite the irregularities, tax authorities had opted against going to court, with the dispute instead being settled through an administrative fine as allowed by law.
According to the sources, Fenech did not wish for his father, who was ill at the time, to have to go through court proceedings.
According to sources, Gaerty had told Fenech in the message that no court proceedings would be brought against him. Back then, Gaerty had said: “I gave a full explanation and provided them with full correspondence on the matter,” he said.
Gaerty had said he had no relationship at all with Fenech and was never offered any gifts by the business magnate. Asked whether tax authorities had ever investigated Fenech's secret company17 Black, Gaerty said all cases cited in the media have been subject to an audit.
The case is not understood to be connected to another trading in influence investigation involving the prime minister's former chief of staff Keith Schembri and ex-Labour minister Konrad Mizzi.
Following his interrogation by police, Gaerty had told Times of Malta that he had been called in “same as last time... because of some messages of Yorgen Fenech."
He had added that it was “normal” as Commissioner for Inland Revenue to get involved in administrative tax matters with Fenech.
“All my life at the Inland Revenue Department I've been assisting taxpayers with problems. That's my normal work,” he said.
Treasure trove of information
Although Gaerty had provided the police with the password to unlock his work phone, investigators at the time had said they could not access the information on the device because of secrecy provisions contained in the income tax act that could only be waived by the prime minister.
The mobile phone is believed to contain a treasure trove of information, including an exchange with Prime Minister Robert Abela himself this year.
Sources said the phone is understood to contain a conversation in which Abela refers to confidential information about opposition leader Bernard Grech’s taxes.
Grech’s tax issues had been the subject of controversy as he vied for, and eventually secured, the leadership of the Nationalist Party in September. He has since settled his dues.
Since then, Gaerty had also been called in to testify before the public inquiry tasked with establishing whether the state played any role in the assassination of Caruana Galizia.
During his testimony, Gaerty was asked to provide details on a number of individuals but he said he needed the approval of the prime minister to be able to do so.