News • October 27 2003

Disgraced chief claims he is a scapegoat

Matthew Vella
Louis Galea is under great pressure to come clean on the Foundation for Tomorrow’s Schools (FTS), claiming that he was aware of irregularities in the issuing of direct orders last September when he was informed of abuses by the FTS board. Only a few months ago, Galea had accused the Labour party of mud-slinging exercises, when the Opposition levelled accusations of financial irregularities at the foundation.
But following MaltaToday’s investigations into the issuing of 483 direct orders to 57 different private companies totalling Lm401,886, FTS chief executive Alfred Ferrante, who had been employed on a three-year contract since 11 September 2002, had his contract terminated last week. Louis Galea told this newspaper Ferrante’s contract was terminated because the FTS board was not satisfied with the quality of control in the foundation.
MaltaToday has now learned that Ferrante is contesting the termination of his contract, denying he had anything to do with the issuing of direct orders or payments to companies. This newspaper is informed that Ferrante’s lawyer is former MLP deputy leader George Abela. Ferrante believes he has been made a scapegoat in the wake of the presentation of information on the direct orders in Parliament. Two weeks earlier, Ferrante himself had refused to give MaltaToday the information, claiming he was bound by professional secret not to disclose the information.

MaltaToday is informed that Ferrante is pointing his fingers at the people with political connections within the Foundation for Tomorrow’s Schools. It remains unclear if it was either the FTS board or Alfred Ferrante who influenced the issuing of FTS’s direct orders to political beneficiaries.
FTS Chairman Conrad Thake and board member Mario Callus have now been entrusted with the joint day-to-day administration of the foundation, although the board has yet to decide on a replacement for the CEO. Callus, a close friend and political supporter of Louis Galea’s, was one of the witnesses on the Permanent Commission for the Investigation of Corruption’s investigation into the Auxiliary Workers Training scheme during the mid-nineties.
At the time, Callus admitted he had been a recipient of direct orders from the AWT scheme. The AWT scheme was heavily criticised for the blatant disregard for tendering procedures and for the issuing of tenders to canvassers and friends of the Education Minister. Today Callus is an active PN member and represents the party on the electoral commission.
The FTS board is made up of Thake, Callus, Vice-Chairman Joe Magro, Etienne Borg Cardona, Peter Fenech, and Finance Ministry delegate Alfred Rizzo.
Louis Galea claims the FTS board acted on its own initiative when it decided to terminate Alfred Ferrante’s contract as CEO, following an audit exercise launched in May to ensure financial regulations were being followed. However, Ferrante was sacked one week following the placing of the list of direct orders in Parliament.
Labour education spokesperson Carmelo Abela has accused Galea of attempting to shirk off political responsibility on the irregularities at FTS, calling for an updated report by the Auditor General on the alleged financial irregularities at the foundation. "The report should be put in front of Parliament’s public accounts committee, which following discussions, would justify whether Minister Louis Galea should resign from his post," Abela says.
Louis Galea has confirmed the matter has been discussed with Finance Minister John Dalli: "I myself recently discussed the issue with the Minister of Finance who in turn also met the Chairman and members of the board to insist on compliance with the relevant procedures and regulations."
It is apparent however that it was only until Finance Minister John Dalli insisted on the untenable situation at FTS earlier this months that things started moving, and heads rolling, within the foundation.
"When the Opposition raised the matter in September 2002, I had then made it very clear to the board and the CEO that I wanted them to co-operate fully and without reservations with any competent authority in the exercise of its investigative or auditing function, and to critically review the internal procedures followed by the chief executive and other officials so as to ensure strict observance with the government's procurement and financial regulations."
In 2002 however, the board of inquiry set up by both sides of the House to investigate alleged financial abuses encountered problems as the two government-appointed members of the board resigned following accusations by Labour that its representative, Martin Debono, had not been allowed access to information.
Since Ferrante’s termination as CEO, no new direct orders have been issued from the FTS. Louis Galea claims that many of the Lm400,000 in direct orders awarded to the private sector fully comply with regulations, whilst in the case of others, the FTS itself is contesting or negotiating the relative bills, or are still being considered by the Ministry of Finance itself.
A case in point is the amount invoiced by Siggiewi mayor and Chairman of the Building Industry Consultative Council, Robert Musumeci, for architectural services given in March, totalling Lm14,575, following a public call for expressions of interest for work for the
foundation.
Musumeci has confirmed with MaltaToday that he has only been paid Lm2,500 of the full amount, which was calculated in accordance with the tariffs stipulated by the Chamber of Architects. According to the Public Service Procurement Regulations, direct orders totalling over Lm10,000 have to carry the approval of the Finance Ministry and the FTS is now contesting the amount.
Galea believes that the Lm400,000 direct orders awarded to the private sector have to be "quoted in perspective."
"When one considers that the amount refers to work done practically over a two year period, in more than a hundred state schools, by close to 60 private contractors, it means one is speaking of an average of Lm2,000 per school per annum, and an average of Lm3,400 per annum per contractor. Having said that I want to reiterate my position that strict observance of the law is of paramount consideration."
matthew@maltamag.com