Correspondence on Café Premier deal to be furnished to MaltaToday

A MaltaToday request for an explanation on how €4.2 million in taxpayers’ money was paid to the lessors of the Café Premier in Valletta to vacate the building, has been upheld by the Information and Data Protection Commissioner (IDPC).

The IDPC found that the government property division (GPD) – by whom the Valletta café was leased to private company Cities Entertainment Ltd – was wrong not to furnish this newspaper with correspondence on its out-of-court settlement with Cities Entertainment.

The company had fallen behind on some €200,000 in lease payments it owed to the government in December 2012, so it contested the claim in court.

After Labour’s election victory in 2013, Cities Entertainment and the Lands Department agreed on a €4.2 million settlement. The company rescinded the lease, and the money was used to pay back all outstanding government dues and also its private debts.

In its decision, the IDPC also found that the government property division was wrong not to forward MaltaToday’s Freedom of Information request for the workings into the €4.2 million estimate to the Office of the Prime Minister: it was through the parliamentary secretariat for planning that consultant John Sciberras, a former director-general of the Lands Department, ordered the valuation.

The director of the Joint Office, architect Duncan Mifsud, a former Labour candidate in 2008, was tasked to establish the price to be paid.

Wrong to refuse FOI request

In its investigation, the IDPC found that the voluminous file on the Café Premier lease did indeed contain information and exchange of correspondence over the cessation of court action between Cities Entertainment and the GPD.

But the GPD did not have any assessment on the compensation for Cities Entertainment, because this “was specifically commissioned by the Office of the Prime Minister which availed itself of the professional services of one of the department’s architects.”

The IDPC said that the department had “undoubtedly failed on its obligation” to transfer MaltaToday’s request on the €4.2 million assessment to the OPM, and instructed it to transfer the request by 4 February.

In refusing MaltaToday’s request, the GPD had asked the Commissioner of Police to confirm whether an investigation into allegations by Nationalist MP Jason Azzopardi had been concluded. Although no answer was received, the GPD still refused the Freedom of Information request.

So the IDPC served the GPD with a €120 fine for its delays in responding to the request, failure to transfer the request, and failure to quote the applicable articles of the law in refusing MaltaToday’s request.

NAO investigation

The €4.2 million buy-back of a 65-year lease to catering company Cities Entertainment for Café Premier and its underlying waxworks museum is currently the subject of an investigation by the National Audit Office, on the request of the Opposition.

MaltaToday broke the story upon learning that the Lands Department had accepted an out-of-court settlement to pay Cities Entertainment €4.2 million, on condition that the company pays back outstanding government rent, income tax, utility bills, and VAT.

But the agreement also included a condition for the company to pay back an outstanding €2,560,800 loan to Banif Bank, as well as a €210,000 payment to one of Cities Entertainment’s shareholders, M&A Investments.

The latter raised suspicion over why a company that had defaulted on its lease payments was ‘paid’ to have all its debts settled using taxpayers’ money.

A police investigation that found no evidence on underhand payments, established that Mario Camilleri, a shareholder of M&A Investments, had negotiated the deal with John Sciberras to have the government take back the premises, and cancel the executive letters ordering Cities Entertainment to pay its arrears. 

Camilleri’s former business partner, Neville Curmi, had claimed that a €210,000 payment in the agreement was claimed as a “commission” for brokering the deal. 

Camilleri denied suggestions by the Opposition that the payment had a “whiff of corruption” about it. “This was a straightforward deal, and the €210,000 were a business debt due to shareholders’ loans,” he had told MaltaToday.

Michael Farrugia, the then parliamentary secretary for lands, had told MaltaToday in February 2014 that the “amicable expropriation” allowed the overlying National Library to eliminate any hazard the catering business could pose to the treasures housed in the Biblioteca, and to build an elevator to improve access.