Emails show cosy relationship between energy regulator and George Farrugia

Godwin Sant, who served as Director for Energy Regulation and later as chief officer of energy policy at the Malta Resources Authority under the previous administration, accepted gifts from oil giants Trafigura at oil trader George Farrugia’s request.

Sant was a director at the state regulatory body that was responsible for overseeing that fuel specifications of imported oil were according to strict tender requirements.

Throughout his tenure at the MRA, he kept a close relationship with oil trader George Farrugia and also accepted a gift from Trafigura.

MaltaToday is revealing that in April 2009, George Farrugia made arrangements for Godwin Sant to receive football tickets in the UK from Trafigura as a gift. Apart from the suspicious informality, the very fact that a regulator was keeping close contact with the Trafigura and TOTSA agent raises many serious questions.

Farrugia had told the Maltese police in 2013 that he had no further backhand dealings to report on for the period after 2005, and that he had told them everything he knew. He was committed to reveal all that he knew after being given a presidential pardon to do so.

Godwin Sant, who held the very senior position of regulator, kept a very close relationship with George Farrugia, even furnishing him with details of other developments related with what was taking place under the umbrella of the energy portfolio at the Malta Resources Authority.

The new information is being produced exactly two years since MaltaToday first broke the story on commissions Trafigura had paid to the former MOBC head Frank Sammut, which led to a police investigation into former Enemalta officials and a presidential pardon granted to George Farrrugia.

But emails published yesterday show that Farrugia’s secretive dealing with government officials continued well after 2005, when the kickbacks he allegedly paid to Enemalta officials had stopped. Undoubtedly, the revelations could have implications on the conditional presidential pardon that Farrugia has enjoyed since February 2013.

Godwin Sant’s relationship with Farrugia is revealed in a number of emails in 2009. In the email George Farrugia arranges for football tickets for Godwin Sant during a stay by the latter in London.

George writes to Trafigura on 6 April, 2009:

“Hi Samantha, please note that my friend Godwin Sant will be at the following address from the 6th April. Could you please send the tickets to his hotels PLEASE. Thanks and Regards, George Farrugia.”

Previously Godwin Sant had emailed to George Farrugia: “Hi George, the above is the hotel we will be in from the 16th till 22nd April. I would prefer if we put our mind at rest before, as we are really looking forward for the match of the 21st J. Thanks again. Regards, Godwin.”

This is the first time that proof has come to light of a gift from the oil company to a public official.

Writing back, Kate Brett of Trafigura emails to Godwin Sant in his G-mail account and tells him: “Dear Godwin, I need to post the tickets mentioned in the email chain to you today urgently. I’ve called at the hotel to find out your room number to ensure the envelope gets to you and the hotel don’t have reference of your name. What name will your hotel reservation be under? Thanks, Kate Brett, Trafigura Ltd.”    

Other emails

Godwin Sant’s friendship with George Farrugia continues to surface in other emails. He is copied in proposals for meetings with suppliers, including a meeting with Tenesol and Solar Total.

And in another email he keeps, George Farrugia posted of what is happening in the energy sector by copying internal mail from the Malta Resources Authority. He sends his personal electronic mail to George Farrugia via gmail. 

No comment-Franco Debono

Asked to comment on the news that George Farrugia could have still been involved in giving questionable gifts to crucial government directors, the legal counsel to George Farrugia, Franco Debono, said he could not comment at this stage.

When news broke of the oil scandal in 2013, weeks later Farrugia was granted a controversial presidential pardon on condition that he would reveal all details of fraud, bribery and kickbacks.

His testimony to the police gave the impression that any illicit dealings stopped in 2005 as soon as former Enemalta chairman Tancred Tabone- accused of bribery alongside consultant Tancred Tabone- stopped serving as chairman of Enemalta.

Police investigators did not look further than 2005. Their investigations led to the prosecution of Tabone, Sammut and other Enemalta officials. All of them deny the charges, except for Sammut.

Farrugia is said to have paid Sammut and Tabone ‘commissions’ on the sale of Trafigura or TOTSA fuel consignments to state energy corporation Enemalta; but after Tabone stepped down as chairman in 2005, Farrugia won 16 lucrative oil contracts up until 2010, compared to three before that period. Tabone was later replaced by Alex Tranter as Enemalta chairman, up until 2010.

But it was George Farrugia himself, in his testimony with the police and the public accounts committee, who said that kickbacks stopped with Tancred Tabone’s term at Enemalta.

Confirming fuel specifications

One of the more important elements in the tendering process, which was completely ignored in police investigations, was the job of the Malta Resources Authority in serving as an overseer in the fuel specifications of the imported oil.

The MRA would subcontract a private company to take samples of the oil and report to it the findings it made. Tenderers such as Trafigura were expected to respect the specifications, but the final word about whether the specifications were being adhered to was that of the Malta Resources Authority.

When specifications were found to be too high in sulphur content, the oil company was expected to address the matter by blending the oil- a procedure that was very expensive to carry out and considered to be a huge expense by the oil companies.

Godwin Sant’s situation placed him in the sensitive position of overseeing that the fuel specifications protocol was adhered to. And in many cases, Trafigura and other companies depended on the verification of the specifications to make a sale.

Trafigura is renowned for being off the mark in fuel specifications in many countries. At Enemalta, Trafigura won many contracts based on the presumption that it was supplying a low sulphur fuel.

Chats on sulphur content

The importance given to specifications was mostly related to sulphur content as can be seen in the chats that took place between George Farrugia and Nicolas Vernerey from Totsa, another oil company, in 2010. The chats show clearly Vernerey’s concern about the fuel specifications and low sulphur content and at one one point Vernery tells George Farrugia: “need the low sulphur one” and later asks him: “you don’t have a guy inside”. Farrugia answers “yes”.

It is not clear who this guy could be.

Earlier in other chats, he discusses the preparation of tenders and even tells Vernerey: “Going to meet the person I told you at 1 for 15 min as he had to go for a funeral.”

Cathy Farrugia’s role

What was unknown at this time was that George Farrugia’s wife was acting behind the back of his brothers, the shareholders in lubricant importers Powerplan Ltd, a subsidiary of the John’s Group.

Instead, Farrugia was using his own private company Aikon Ltd, to import oil from Trafigura and TOTSA, until his brothers discovered his double-dealing by accident in 2010.

Farrugia used his wife Cathy to issue invoices of the company Aikon Ltd to send to Trafigura and TOTSA His wife played a central role, having been a party to all the transactions that took place. She was never interrogated by the police until two weeks ago, when the police called her in after a number of reports in MaltaToday showing that she was invoicing on Aikon Ltd’s behalf.

Cathy Farrugia and Gonzi

The latest emails come at a time when the emails acquired by MaltaToday show the degree of familiarity that existed between Cathy Farrugia and Lawrence Gonzi.

The former prime minister, who advised for the issuance of the presidential pardon, has claimed he did not really know Cathy Farrugia. A former secretary who is believed to have assisted Gonzi at the Mizzi Organisation, Gonzi has claimed that if he knew her, it was “very much in the same way that [he] knew the 1,300 employees” of the firm where he was legal advisor before.

While Farrugia was part of the secretarial staff that served Gonzi for eight years, so far the familiarity between the two may have been illustrated in a photograph of Gonzi speaking to the Farrugias during an open day at the Safi Aviation Park.

But in one of the new emails now published by MaltaToday, Cathy Farrugia displays an unusual familiarity with Gonzi and refers to her husband as “George” in a way that indicates that Gonzi knew Farrugia well.
“It’s been a while since we met and we hope that you and your family are doing fine. We are ok and starting to enjoy the summer now that the kids are off to school,” she greets Gonzi in an email.

“George would like to have a private word with you at your earliest convenience. I know you are busy but won’t take long…Thank you and look forward to see you, Cathy.”

Gonzi replies a day later, on 3 July, 2008, from his official government email.

“Dear Cathy, thanks for your email. I can try to set up a meeting but this will prove to be complicated during July. Is there any particular subject he would like to bring to my attention even via email? Best wishes, Lawrence.”

Later in 2009, an email from the Auberge de Catille confirms that George Farrugia would in fact have a face-to-face meeting with Lawrence Gonzi on a matter related to privitisation.

On another occasion, George Farrugia writes to Gonzi to complain about the bad service in a Maltese hotel to which Gonzi replies: “I will certainly see that someone follows up on this.”

At the last public accounts committee hearing, Lawrence Gonzi vehemently denied that he had met George Farrugia.

He returns to the PAC on Thursday, having left off from the last committee hearing denying having suggested – on his own volition – that a pardon be issued to George Farrugia.