Falzon clashes with Auditor General during stormy PAC grilling on Gaffarena deal

Former parliamentary secretary for planning Michael Falzon tore into the National Audit Office, accusing it of subjecting him to a “political witch hunt” over its inquiry into the expropriation of half a Valletta palazzo from property developer Mark Gaffarena.

Facing a grilling by parliament’s public accounts committee, Falzon alleged political interference within the NAO and accused it of going too easy on the Lands Department’s external architect Joseph Spiteri.

Auditor General Charles Deguara vehemently denied Falzon’s claims that the investigations were politically motivated.

He added that the investigation had dedicated an entire chapter to its criticism of Spiteri’s valuations of the palazzo and the lands granted to Gaffarena.

“Indeed, he wrote to us to claim that we were unjust with him,” he said. “The NAO is like a piece of ham, caught between two slices of bread..”

Falzon also took the NAO to task over a leak of the investigation results to the Times of Malta a day before the report was officially published in Parliament.

“Is the NAO the back-office of the Times? How was it leaked? “ he asked Deguara. “Somebody from your office must have leaked it to the Times.”

The auditor general here claimed ignorance of the person behind the leak, and said he is willing to ask the NAO officials who worked on the report to write affidavits that they weren’t behind the leaks. However, Opposition MP and PAC chairman Tonio Fenech refused to discuss the leak, arguing that it didn’t fall under the PAC’s competence and didn’t alter the report’s contents either way.

‘Prime Minister not involved in deal’ – Deguara

In response to questions by justice minister Owen Bonnici, Charles Deguara said that NAO investigations found no proof that Prime Minister Joseph Muscat had a hand in the deal.

Opposition leader Simon Busuttil had claimed that it was impossible that Muscat wasn’t aware of the deal from the start.

Fenech argued that Falzon’s secretariat fell under the Office of the Prime Minister, to which Falzon responded that Muscat never interfered in expropriations.

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.

However, Falzon repeatedly denied that he had personally interfered in the deal or instructed Scerri how to behave.

“I have been saying it from the start, and I’ve grown tired of saying it now; I allowed the Lands Department to run independently. The NAO’s report on the Café Premier deal had criticized politicians for interfering too much, while its report on the Strada Zekka deal criticized politicians for interfering too little. Distinctions must be clearer as to the roles of politicians and civil servants.”

He similarly denied that he had a close relationship with Gaffarena. “The media made a big deal of the fact that we had met in the past, but I had spent 24 years as Bank of Valletta’s lawyer and there isnt a single contractor on the island who I’ve never met. When Gaffarena came to my office, I referred him straight to the GPD.”

‘What was the public purpose of the expropriation?’

Fenech’s line of questioning focused on the public purpose behind the expropriation of the two separate quarters of the property, and the government’s decision to go straight to Gaffarena while bypassing the other tenants entirely.

Falzon said that he had been advised to sign the expropriation by senior figures within the Lands Department.

“We’re talking about a palazzo in Valletta with a considerable value, that used to serve as a school and examinations centre and that currently houses the Building Industry Consultative Council,” he said.

However, Fenech repeatedly asked Falzon whether he had at all questioned whether the government was going to get a good deal.

“Should the expropriation have taken place at any cost? Was it truly wroth €3.5 million for the BICC to be housed in Valletta? After all, its offices were located in Mosta for a long time, so why did it have to be Valletta at all costs?”

Falzon – along with Labour MP Charles Mangion - hit back, arguing that politicians shouldn’t question or undermine architects’ valuations. However, Fenech retorted that Falzon had the power to reject the deal outright on the grounds that it was too expensive for government.