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[WATCH] ‘Dalli aides said commissioner proposed lifting snus ban’ – Kessler

[LIVE BLOG] OLAF director-general Giovanni Kessler says testimony of two Cabinet officials made during OLAF investigations in 2013 on 'Bahamas' allegations against former commissioner • describes Silvio Zammit as ‘the man with the golden key’

matthew_vella
Matthew Vella
17 March 2015, 10:13am
Giovanni Kessler in Valletta, to testify in the criminal case against Silvio Zammit. Photo and Video: Ray Attard
Giovanni Kessler in Valletta, to testify in the criminal case against Silvio Zammit. Photo and Video: Ray Attard
Giovanni Kessler arriving in court
Giovanni Kessler arriving in court
OLAF chief Giovanni Kessler testifies against Silvio Zammit in bribery case
OLAF director Giovanni Kessler today testified in the criminal case against Silvio Zammit, accused of having solicited a €60 million bribe from snus manufacturers Swedish Match for the reversal of an EU retail ban on snus.

The Italian director of the EU’s anti-fraud agency was responsible for the investigation into whether John Dalli, the former EU commissioner for health and consumer affairs, was aware of the bribe being asked by Zammit, at one time his canvasser.

The OLAF report led to the resignation of Dalli from the EC on 16 October 2012.

John Dalli reaction to Giovanni Kessler's testimony

15:10: Sitting is suspended.
15:08: No cross-examination of witness.
14:58: Potenza says that the records of these interviews were transmitted to the AG in 2014. He says that the investigation into the 'Bahamas' allegations has not yet been concluded.
14:57: Joanna Darmanin was interviewed on 20 July, 2013.
14:56: At the time of the allegations against Dalli, the former commissioner was alleged to have organised a 'multi-million transfer of money' on behalf of a philantropic project 'somewhere in Africa' by a group of entrepreneurs.
14:55: The testimony of Joanna Darmanin and another cabinet official, Ms Duarte, were made in connection with the Bahamas investigation.
14:52: John Dalli was outed by the International Herald Tribune of having jetted off to the Bahamas in a 24-hour turnaround return flight, right at the time that Zammit was first interrogated by OLAF.
14:52: Potenza was an investigator in the Bahamas allegations on John Dalli.
14:50: Again, a run-through of the OLAF official's role in the Dalligate investigation.
14:48: Another witness, OLAF investigator Alberto Potenza, takes the witness stand.
14:43: No cross-examination of witness.
14:38: “Zammit was interviewed by OLAF officials twice, myself, Kessler and Cano Romera, in the presence of [former IAID head] Rita Schembri and Mario Debono.”
14:34: Svetlina Cherekova, OLAF staff official, takes the witness stand.
14:28: The OLAF interviews were sent to the AG for further investigation.
14:27: “On the 10 July 2014, we sent to the AG the two interviews we carried out with Darmanin and Duarte [referring to claims made by Kessler in his testimony].”
14:26: ECR denies meeting with Gayle Kimberly in Sliema on the day OLAF came to Malta to carry out an on-site inspection of Peppi’s Kiosk. “I didn’t meet Mrs Kimberley at all.”
14:25: Defence counsel asks whether the witness was threatened with arrest if they come to Malta to testify? The court asks Dr Gatt to keep his questions to the relevance of the case.
14:23: Cross-examination by Edward Gatt, defence counsel for Silvio Zammit.
14:21: ECR says that during Zammit’s interview, the telephone conversation was not played out. “Zammit said he would not comment on the telephone call to Delfoss unless he hears the conversation… he was very arrogant during the interview, dramatic, and from time to time joking about questions we put to him, such as when we asked him who is his ‘boss’ and he replied to us ‘God’.”
14:15: ECR says Zammit’s claim that a company linked to him was the recipient of EU funds, OLAF decided to do an onsite inspection to confirm this claim. It was this that OLAF used to enlarge its investigation from an internal one to an external one, necessitating the anti-fraud agency’s trip to Malta for its investigation.
14:11: In the phone-call, we hear Delfosse telling Zammit she is floored by the request for €10 million: "I am lying down", she tells him.
14:11: Zammit tells Delfosse in the phone-call: “Whenever you mention the guy, you know I don’t answer you. I only answer for myself…”
14:03: Silvio Zammit's phone-call, now played in open court, generates a few laughs as he is heard seemingly bragging of being able to organise a meeting for Estoc 'anywhere you want, even on the moon'.
13:59: You can find the transcript of the phone-call in the OLAF report here.
13:57: The phone-call, 11 minutes long, is about to be played to the court.
13:56: ECR submits as evidence the actual pen drive given to him by Estoc secretary-general Inge Delfosse gave him with the recorded conversation with Silvio Zammit in March 2012.
13:55: ECR says telephone logs confirmed that Zammit called Kimberley and Dalli after mentioning the prospect of a setting up a meeting with the commissioner for a price with Inge Delfosse; after which the second phone call with Delfosse was recorded by the Estoc secretary-general.
13:52: ECR giving a quick run-through of the Kimberley interview. “We changed her status to ‘a person concerned’ when we interviewed her in September, when she confirmed much of the first interview and changed some information.”
13:49: Cano Romera (ECR) was coordinating the investigation for the director-general of OLAF. He was directly involved in certain interviews for the investigation, amongst them Gayle Kimberley. “I approached her [in June, in Troia, Portugal] and introduced her as an EU official. We proceeded like that because of the special sensitivity of the case, which involved a high official of the EC, to keep maximum confidentiality.”
13:41: Eduardo Cano Romera, OLAF staff official, testifying.
13:39: Another witness, an OLAF staff official, to be heard in court.
13:36: Cross-examination over.
13:35: Defence tells Kessler that Delfosse/Gabrielsson were convinced that Zammit’s requests were on behalf of Dalli; that he gave the evidence from the two witnesses (Darmanin/Duarte) to the AG: had he been told of whether the police decided to prosecute him? “We understood that there had been elections and change in government, and that Dalli reappeared after the election, and that Rizzo was no longer head of police; and that the new head of police Peter Paul Zammit publicly said that the ‘Dalli case was over’. However, some time later I met Zammit in a Europol conference and he said that the case was still ongoing. He told me that it was ‘a problem of communication’, and later Attorney General Peter Grech confirmed to me that the police investigation was still ongoing as far as he knew.
13:29: Defence counsel asks Kessler whether he informed the Maltese authorities of the testimony of two witnesses from Dalli’s cabinet who said the commissioner proposed lifting the ban on snus. Kessler confirms the information was sent to the Attorney General.
13:27: Defence counsel says that in the OLAF report, Kessler’s conclusion after speaking to Inge Delfosse and Johan Gabrielsson OLAF report page 38, was that Zammit’s request for a bribe were made “on behalf of commissioner Dalli”.
Defence counsel tells Kessler that according to these two witnesses, the monies requested by Zammit were being made on behalf of John Dalli.

“I understood that in what they told me, there was no doubt in their perception, that the request came from Dalli. Why? Because Zammit presented these requests as coming from Dalli, saying ‘this is the price he is asking’, ‘at the meeting, after the meeting’ – this money was for the commissioner, because it was not Zammit who could change the Commission’s [rules].

“As I said, Zammit was the ‘golden key’ for them to access the inaccessible commissioner.”

13:21: Defence asks whether anyone from the Maltese police or Attorney General inform Kessler of having found anything different from what he had found in his investigation. “From memory, John Rizzo accompanied by two of his staff, told us that John Dalli – who had been interviewed by the police – admitted to have lied to us when we interviewed him, on a specific issue, that he didn’t know about the OLAF investigation on snus.”
“I went unannounced to Dalli’s office, personally, to communicate to him that he was a person of interest in the investigation – and he showed surprise. We later understood from John Rizzo, and from the examination of the telephone calls, that [Dalli] had been informed of the investigation.”
13:13: Defence asks what recommendation did Rizzo make about Gayle Kimberley. “He did not mention anything. I didn’t ask about [Kimberley]. It was a quick phone-call.”
13:12: Kessler says that former police commissioner John Rizzo in December 2012 told him he wanted to arraign Dalli, but since he was not in Malta [at the time Dalli had sought medical treatment in Brussels] he could not physically arraign him.
13:10: MORE: Here’s a piece we had written about the OLAF report’s conclusions, specifically about the role of Gayle Kimberley in the entire affair.
13:08: Defence refers to the same conclusions OLAF arrived at with regards to Silvio Zammit, that were also reserved for Gayle Kimberley. “It is true that in that letter [to the Attorney General], we were equal to all three.” OLAF had recommended charges against Zammit, Kimberley and possible trading of influence charges against Dalli.
13:06: Defence refers to the OLAF report’s conclusions: either charges of trading of influence, or bribery under the Maltese criminal code against Zammit or Gayle Kimberley. How did he know of the existence of these two crimes in Maltese law? “This is what OLAF does – it is our task to see which crimes committed in any EU country [are sanctionable]. We have certain expertise in legislation and national competences of member states. We don’t have Maltese investigative staff at OLAF, but we have magistrates who have certain countries under their remit.”
13:03: Defence refers to initial investigation launched by EC into an alleged misuse of funds, which later snowballed into the Dalli investigation. Kessler says that Zammit had made a reference to an overseas bank account “used for EU funds” he had used in the past in his conversations with Delfosse. Kessler says, in response to defence’s direct question, that OLAF did not verify Zammit’s claim that he had made use of any EU funds.
13:00: Defence asks whether the complaint to the EC was made by Swedish Match, rather than by Estoc. Kessler: “I received a letter from Catherine Day (EC sec-gen) accompanied by a letter of Frederik Peyron [Swedish Match legal counsel] to Day, and a document marked ‘private and confidential’ to Day.”
12:56: Cross-examination by Edward Gatt, defence counsel for Silvio Zammit.
12:54: John Dalli has issued a reaction to Giovanni Kessler's testimony here.
12:13: Giovanni Kessler's testimony is over. A 30-minute break now before the counter-examination from the defence counsel.
12:10: Kessler says he interviewed Zammit in Malta, at Afcos – the office inside the Internal Audit and Investigations Department that liaises with OLAF – where he declined to be accompanied by a lawyer. He said that towards the end of the interview, he just stood up and left. “What we understood at that point was that he didn’t know what to answer.”
12:05: Kessler also lists the phone calls made between Zammit and Dalli, every time Zammit requested a bribe.
12:00: Kessler says Zammit was cautious not to mention any names, using appellations such as ‘your boss, my boss’. “When we asked about these telephone calls, he confirmed to have had these calls with Delfosse; when we asked him about his ‘boss’, his answer was, ‘I have only one boss, He is God’.
“And then he put forward a price for what ‘he’ was asking. These were the two requests of bribe, to Swedish Match in February and to Estoc in March, made by Zammit.”
11:56: Kessler quotes Zammit’s call to Delfosse: “The meeting can be anywhere in the world… after the meeting you have to pay €10 million. Tell us where you want to do the meeting.”
11:53: “On the 16 March that Delfosse asks Zammit for an informal meeting with Dalli… a few hours later Zammit calls Dalli; and on the 29 March, Delfosse calls Zammit. Zammit tells Delfosse that a change in the law ‘will cost you’, interrupts the phone call, and calls back 10 minutes later, the second conversation being recorded by Delfosse. This conversation was, historically, a turning point for the investigation, because it was very important evidence.”
11:49: “After Swedish Match indicates it is not interested in Zammit’s proposal, he reopens the way with Estoc, writing an email to Inge Delfosse on 18 February. Delfosse calls back, and on the same day we have telephone logs showing that Zammit called Dalli. So on the same day Zammit proposed ‘something very interesting’ with Estoc, he was also in contact with Dalli.”
11:47: It was also on 28 February that John Dalli closed the impact assessment parameters with his Cabinet and DG-Sanco, on the Tobacco Products Directive, which at that time proposed the retention of the ban on snus and other smokeless products.
11:39: “The two witnesses, Joanna Darmanin – at the time chef de cabinet of John Dalli – and Ms Duarte gave two interviews, records of which I don’t have with me but can be provided, said that Dalli, on two occasions on 24 January 2012 and 28 February 2012, pushed for the lifting of the ban, or he tried to see what was necessary to do so.”
11:29: SOMETHING NEW FROM KESSLER • he says that OLAF was conducting a separate investigation on Dalli, in which he interviewed two officials from his Cabinet.
“Two Commission officials [Joanna Darmanin and Duarte] told us that Dalli, in a formal meeting of the Cabinet, tried to push for lifting the ban on snus, which issue at that time was not controversial.”
11:24: Kessler says that during his interview with Zammit, Zammit recognised the document containing the points he would have made to Dalli as carrying his own handwriting. These notes allegedly contain clues as to what Dalli might have told Zammit on their 10 February meeting.
11:21: “Zammit suggested that Dalli was ready to meet Swedish Match’s CEO and that he would have to get the first tranche of €10 million at the meeting.”
11:20: “Kimberley came back to Gabrielsson, with news of the offer of Silvio Zammit, who proposed a price to her. Kimberley told Gabrielsson to come to Malta, probably because it was difficult for her to tell him on the phone that he has to pay €60 million for this [lifting the ban].
“On the 13 February, Zammit meets Gabrielsson and Kimberley at Peppi’s Kiosk where he clearly says that the commissioner was ready to lift the ban, but at a cost, because this was a bold move and has to think of his career, and that this would cost €60 million.”
11:16: “Zammit and Kimberley met at Peppi’s Kiosk, where Zammit presented her with the paper she had given him, with some handwritten notes on it.” The paper refers to the points that Kimberley had prepared for Zammit to ask Dalli about.
“The answers were: ‘ready to meet chief executive’; ‘suggest no ban’.”
11:14: “He clarified that they did not speak about snus but about the political situation. This is an important point: we know that Zammit prepared for this meeting with Gayle Kimberley. We had further, indirect confirmation that the meeting took place, because when we received the mobile phone logs at the end of July, we saw that on the 10 February there was a telephone call from Zammit to Dalli, at around 10am and another call an hour later, from Zammit to Kimberley.”
11:11: “We insisted quite a lot with John Dalli whether he had this meeting with Zammit. In the first interview, he denied having met Zammit on the day. We knew for sure that Zammit said he had to meet the commissioner on this day. We found the evidence of this meeting through a letter from Dalli, send 15 days after this interview, confirming the meeting.”
11:10: The 10th February meeting, which Kimberley did not attend, was a meeting between Zammit and Dalli.
11:09: “Kimberley also told us that she lied to Swedish Match [about the 10 February meeting] – I thought it was to protect her contract with Swedish Match, because she was by then useless. Swedish Match always thought she was there at the meeting.”
11:06: “That is why we didn't send Kimberley a prior invitation to the interview... there was a high risk that she might have spoken to someone. The main reason was to protect the reputation of the Commission, and the genuineness of the source. If I told her in advance that I wanted to interview her, she would have [manipulated] what she told us.”
11:02: “This was an investigation on a very sensitive issue concerning a top commissioner. We were very careful to avoid any leak of this allegation and of this ongoing investigation… that the name of this commissioner goes to the press.”
10:59: "Kimberley was informed, as we always do, that she was interviewed as a witness and that she had the possibility not to incriminate herself. All the witnesses can accept to give a statement to us, or to refuse. We do not have any power to refuse this."
10:58: A point of note here is that the first interview with a person concerned, Gayle Kimberley, was a surprise interview in Troia, Portugal, where Kimberley was at a conference organised by the Lotteries and Gaming Authority.
10:57: "We do not have authority to summon people. We invite witnesses to an interview. At the time, there was no specific OLAF procedure for an invitation."
10:56: Kessler is asked how OLAF summons its interviewees.
10:52: “The meeting was postponed to the 10 February. The intention of Swedish Match was to seek a way to lift the ban on snus, and with whom from the Dalli cabinet could they liaise, and to seek information on who were the opponents to snus liberalization in the Council. Gabrielsson gave these points to Kimberley. But on the 7 February, Zammit calls Kimberley and tells her that Dalli does not want to meet with her, ‘he only wants to meet with me’. Kimberley does not report this to Swedish Match; instead she puts in writing the questions that she should have made orally to the Commissioner, and gives it to Zammit.”
10:48: “Kimberley comes back with a meeting arranged for the 6 February 2012. Zammit, acting as a mediator, manages to organize the meeting again like in 2010 and to accompany and attend the meeting with Dalli. Kimberly sends a long email to Gabrielsson, telling him that the Commissioner ‘is open’ [to their issue].”
10:45: “Zammit proposes himself with his services to Estoc, boasting of and actually having a strong connection with John Dalli. Inge Delfosse informs Swedish Match of Zammit’s proposal, and Swedish Match decide to use Silvio Zammit instead of the official channels. They hire Gayle Kimberley, a Maltese lawyer known personally to Swedish Match’s Johan Gabrielsson, to represent them with the Commissioner. They understand they cannot meet the Commissioner, because it is against the WHO treaty, so they come to Malta to give her documents on the legalization of snus; they tell ‘look there is Silvio Zammit who has this connection with the Commissioner, who has offered to arrange a meeting with the Commissioner.”
10:40: “Zammit even calls John Dalli during a lunch in Stockholm with Swedish Match representatives to show that he knows the commissioner.”
10:38: "John Dalli was very well aware that he was not allowed to meet him, so that is why it was 'a bingo' for Hammargren to meet Dalli. In 2010, to Estoc, Silvio Zammit was the man with the golden key who allowed them to open the door to the Commission. He was an essential point of reference for them."
10:37: Defence counsel Edward Gatt says that Hammargren has already testified but that a document on the meeting he held with Dalli was never submitted in court as evidence. The document in question was handed to OLAF from Estoc secretary-general Inge Delfosse at a time when Hammargren was no longer Estoc chairman.
10:37: Defence counsel Edward Gatt says that Hammargren has already testified but that a document on the meeting he held with Dalli was never submitted in court as evidence. The document in question was handed to OLAF from Estoc secretary-general Inge Delfosse at a time when Hammargren was no longer Estoc chairman.
10:34: Inspector Jonathan Ferris leading the questions for the prosecution.
10:31: Kessler is asked to identify Zammit in the courtroom.
10:30: “Mr Zammit was the person who twice asked Dalli to meet representatives of the tobacco industry, who drove Hammargren to the Kempinsky, and stayed there at the meeting before leaving Hammargren and Dalli together to speak alone. This meeting was more than bingo… Hammargren knew very well they could not meet the Commissioner; they would have to filter that meeting with the Commission and meet in a specific room.”
10:26: “According to Article 5 of the WHO Convention on Tobacco, an international treaty, and its guidelines, the contacts between public officials of signatories and representatives of the tobacco business have to be open and transparent.”
10:26: “Now there was a new commissioner for health, so they felt the need to make their case to him.”
10:25: Snus is smokeless tobacco that can be retailed in Scandinavian countries, but which is banned from being sold in other EU countries.
10:24: “With the finding of these investigations, concluded before the 15 October 2012, we found out the following events and facts. We found out very clearly, that on the 20 August 2010, Zammit accompanied to the Kempinsky hotel in Gozo, the BAT representative to Malta and Tomas Hammargren, president of Estoc [European smokeless tobacco council]. This meeting, during which the commissioner was then on holiday, was a discussion between Dalli and Hammargen on the legalization of snus.”
10:20: “In May 2012, I received a transmission letter from EC secretary-general Catherine Day – this report, from Swedish Match, contained certain facts on Silvio Zammit and then commissioner John Dalli. The facts were brought to the attention of the EC president José Barroso; and answered to the secretary-general to forward the report to OLAF. Actually, Day and Barroso acted exactly in accordance with the OLAF regulations.”
10:18: Kessler's testimony starts with questions from his lawyer; OLAF is assisted in Malta by the IAID, its liaison office.
10:16: OLAF director general Giovanni Kessler testifying in court.
 

matthew_vella
Matthew Vella is executive editor at MaltaToday.