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[Live-blog] Spirited Falzon faces PAC over Old Mint expropriation deal
Former parliamentary secretary clashes with Auditor General during PAC grilling on expropriation deal that saw Mark Gaffarena earn €3.4 million in cash and lands in return for half a Valletta palazzo
2 May 2016, 6:43pm
Tim Diacono
Tim Diacono
1 min read
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Former parliamentary secretary Michael Falzon. Photo: Chris Mangion
Former parliamentary secretary for planning Michael Falzon faces parliament's public accounts committee over a controversial expropiation of half a house from property developer Mark Gaffarena.
Falzon was forced to resign his Cabinet post earlier this year after a damning audit report declared “collusive” action between Falzon’s office, the Lands Department and Gaffarena to facilitate the deal.
The PAC session was convened following an affidavit by former Lands director Charles Camilleri, who said that he had felt threatened by Falzon’s office to steam ahead with the expropriation – that saw Gaffarena pocket a tidy €3.4 million in lands and cash.
Camilleri told the PAC last week that Gaffarena was frequently accompanied to the Lands Department by Clint Scerri, a 24-year-old aide to Falzon.
He said that the director general had first introduced Scerri to him as a liaison officer, leading him to take everything he said as though it were coming from the ministry.
Tim Diacono is a former reporter for MaltaToday.
Fenech steps in to say that the PAC shouldn’t interfere in the NAO’s work and that the police are now investigating Camilleri’s and Falzon’s affidavits.
The session has ended.
“The fact is that Falzon’s secretariat fell under the Office of the Prime Minister,” Fenech responds, to which Falzon insists that Joseph Muscat never had a hand in expropriations.
The least the NAO could have done was admit it in its report, but they made no reference to it whatsoever.”
Deguara admitted that had no idea that Spiteri had worked with the NAO, which in any case was around eight years ago.
“Also I don’t see why you’re claiming that we didn’t criticise Spiteri. We criticized him heavily, and indeed he wrote to us to say we were unjust with him. We’re like a slice of ham caught between two different slices of bread…”
“The PAC is being turned on its head. It shouldn’t focus on politicians, but on public administration. The aim should bet o learn from the NAO report, not to come up with conspiracy theories. The take-away from the report is that we have completely different versions of what constitutes public purpose..
He asks Deguara whether he thinks clear parameters should be introduced to define what constitutes public purpose or not, and asks Falzon whether he at any moment questioned the advice he received to expropriate the palazzo shares.
“Did anyone tell you that Clint Scerri was bothering them? Did you think the civil servants act in the public interest or not?”
Falzon himself now turns from witness to questioner, and asks whether he was implicated as being part of the collusion simply because he had signed the expropriation deal. Bonnici questions straight out whether collusion exists between Gaffarena and Falzon?”
Gaffarena came to government with an offer and got what he wanted. The government spent €1.6 million and still had half a property.
Falzon questions whether government should have proceeded with the rest of the expropriation when the press were hounding it over the story. He then turns to Deguara and questions how the NAO’s investigations were leaked to the Times of Malta prior to their publication?”
“Is the NAO the back office of the Times?” he asks. “How was it leaked? Somebody from your office musty have told the Times.
Degaura says that he can ask his offiicals to sign an affidavit that they hadn’t leaked the investigation to the newspaper. Fenech retorts that this isnt the point of the investigation to which Falzon interrupts as it’s not fair on his part.
Fenech stands his ground: “The leak is certainly within the competence of the PAC, and either way the leak doesn’t change the content of the report.”
“The NAO states collusion in the detriment of the other tenants. Were the NAO looking after the government’s interests or the tenants’? The NAO should safeguard government interests, so why were the private individuals included?”
Deguara retorts that the government would have had the entire property in its possession had it negotiated with the tenants from the start. Owen Bonnici steps up and questions whether this implies collusion, to which Deguara retorts that there was clearly some sort of agreement between government and Gaffarena.
Referring himself in the third person, Falzon strikes a humble tone and says that he didn’t presume to have the know-how on whether the building was valued at an exceptionally high price or not.
Justice minister Owen Bonnici steps in for Falzon’s defence, and said that the former parliamentary secretary had made his decision based upon the advice of a senior civil servant.
Fenech is not giving up though, and reiterates that Falzon was not obligated to sign the deal or not. “I am not insisting that Falzon should have questioned the architects’ valuations, but he could have refused him outright. The issue is not the valuation per se, but about its value for money.”
He questions why the government forked out so much money to expropriate a building to be used by the BICC offices.
”Should the expropriation have taken place at any cost? Did the BICC have to be housed at a building worth €3.5 million in Valletta? It was housed in Mosta for a long time. Why did its offices have to be in Valletta?”
Falzon said that the minutes for his dealing with the case weren’t ad hoc but stipulated- told them to follow stipulated policies and regulations, then that it falls within the legal parameters.
“If you want to ask about the valuations, then don’t ask me,” he says.
However, Fenech fires back and questions why Falzon didn’t reject the expropriation outright on the grounds that it was far too expensive.
“Do you think politicans should undermine architects’ decisions?” Falzon retorts, to which Fenech states that he could have accepted the valuation but refused to sign the deal anyway. Holding up a glass, he asks Falzon whether he would purchase it for a million euro if an architect were to value it at that price.
“I assure you 100% that there weren’t an political motivations or agendas, or a political witch hunt against Falzon. If something went wrong in the investigations, then I will shoulder the responsibility for it. However, when the NAO was attacked in the past, it was my office that suffered by losing staff.
Falzon says that everyone who works with the NAO must be held responsible for their actions, to which Deguara agrees.
Degaura adds that his report had dedicated an entire chapter to criticising Joseph Spiteri’s valuations. “We based a lot of our work on the IAID’s work, and we used certain findings and valuations. Are you claiming that the IAID was politically motivated as well?
“If there was insider trading, then it was with the architect, so why is his name completely missing from the NAO’s report?” he asks. “That is the big question here. I’m not the only person who is questioning this; [columnist] Simon Mercieca had also asked the same questions.
He questions why the NAO has yet to investigate a set of expropriations under the previous administration that Labour had requested it to following the PN’s request for a Gaffarena investigation.
“These cases happened earlier than [the Gaffarena case], involved greater sums of money, and were referred to the NAO at the same time. Why aren’t they published yet?”
Falzon retorts that he is not the NAOs lawyer, and that he has reason to believe that the audit is ongoing.
”It appears as though the ‘public purpose’ rested on a comment by Charles Camilleri that it could have been a good idea to expropriate a quarter of the property so as to safeguard the government form getting evicted from it. That would have been understandable for the first quarter, but not for the second one.”
He also questions why the GPD hadn’t offered to expropriate the building from the other tenants.
Falzon said that the palazzo’s value is “considerable”, that it had served as a school and examination centre and currently houses the BICC offices.
Fenech asks why Falzon hadn’t questioned why the GPD was only purchasing a quarter of the property. “As soon as the first transaction was carried out, a second transaction was carried out that wasn’t contemplated when the first one was. The tenants would have been willing to sell to government, particularly given how cheap they sold it to Gaffarena – the government would have probably got a better deal.”
“Did I collude because I signed the expropriation deal? You were a minister once; you know how many expropriation deals are carried out.”
“Clint Scerri ordered them around. Is that how Lands directors normally relate to customer care officers?”
Falzon retorts that he never interfered in what Camilleri wrote in his affidavit, in the choice of architect, or in the valuations of the land. “I have been saying this from the start and I’ve grown tired of saying it. I allowed the Department run by itself, so we either want distinctions between politicians and the civil service or not. In the case of the Café Premier, the NAO criticized politicians for interfering while in this case, it criticized politicians for not interfering enough.
“I definitely didn’t tell anybody at the GPD that Clint Scerri was speaking in my name. He was on Scale 13-14 and was only 24 years old. Scerri was a customer care officer.”
The grilling has begun, and Opposition MP Tonio Fenech instantly asks Falzon for details on Clint Scerri. Falzon says that he was a customer care officer who took care off issues in the civil service.