Updated | Falzon lashes out at NAO for ‘political agenda’ behind land transfer investigations

The former Labour junior minister who lost his ministerial position in the Gaffarena scandal, has launched a scathing attack against the National Audit Office, in the wake of two embarrassing reports exposing irregular land transfers under the Nationalist government.

Michael Falzon, who was parliamentary secretary for planning, resigned his position after the NAO carried out an inquiry showing the irregular way that entrepreneur Marco Gaffarena was granted a €1.65 million land and cash deal during a speedy expropriation of his part-ownership of a Valletta palazzo that hosted government offices.

Falzon, who has denied having shown Gaffarena any undue favour, has launched yet another attack on the NAO in a speech he gave in Parliament, after the office documented the way the former PN administration transferred land in Qormi to party donor Nazzareno Vassallo, and acquired the HSBC offices in Valletta for the Attorney General’s relocation.

Labour has used the NAO inquiries to demand that former lands minister Jason Azzopardi “shoulders responsibility” for the land transfer.

However, Falzon accused the NAO of applying different weights and measures according to whether the land transfers it investigates took place under a Nationalist or Labour administration.

Indeed, he noted that an NAO official [Antoine Calleja] had actually recently been photographed at a football match with Jason Azzopardi. Auditor General Charles Deguara recently refused to answer whether any action has been taken against Calleja, citing a policy of confidentiality in internal affairs.

“Is it acceptable for a NAO official to travel with someone his office is supposed to be investigating?” Falzon asked. “The Auditor General is supposed to be the guarantor of transparency for the entire country, but where it pleases him he hides behind the Constitution and cites confidentiality.”

In his speech, Falzon singled out Caroline Muscat, the former Times of Malta editor who broke the Gaffarena expropriation story in 2015 and who recently left the paper to take up the role of campaign director for the PN.

“The pigeons have come home to roost…the person who led a campaign of political hatred against me is now the PN’s campaign manager.”

He lambasted the Auditor General for originally planning to compile its two recent investigations into one single report, along with two others that justice minister Owen Bonnci had requested an investigation into – namely the transfers of the land at Tal-Fekruna in Xemxija and a property in Spinola that had taken place under the previous PN administration.

“Never since 2008 has the NAO compiled more than one case into the same report,” Falzon said. “There is an obvious agenda at play here. Some people were offended when I compared certain local newspapers to Der Sturmer [the Nazi Party’s propaganda paper], but it is clear that certain individuals within the NAO are dictated by the dirt that is written by certain papers and journalists.”

He also hit out at the NAO for “obscenely” releasing its two reports into the Qormi and Valletta land transfers only a few days before Christmas, when it had waited until after the Christmas holidays before releasing the Gaffarena report earlier this year.

Falzon went on to accuse the NAO of purposely using different language when analyzing the Strada Zekka expropriation case and the Lowenbrau and HSBC cases.

In the HSBC case, he noted that the NAO had found that “there was no conclusive evidence that political pressure was exerted….but that political direction was manifested”.

“Nadia Comaneci may have the most gold medals in the history of gymnastics, but certain parts of this report would certainly beat her in a mental gymnastics competition,” he quipped. “What’s the difference between political pressure and political direction? It’s as though the NAO is saying ‘No, this animal isn’t a hmar but a donkey’. Perhaps it believes that there are donkeys on this side of the House.”

The NAO noted that interventions by then Prime Minister Lawrence Gonzi and lands minister Jason Azzopardu were made, despite the concerns raised by the permanent secretary of the finance ministry. However, it considered the decision to overrule the permanent secretary as being within their remit.

“When I signed the final expropriation for the Strada Zekka property, the NAO deemed that I had readily facilitated the transfer. However, it had no problem with [Gonzi and Azzopardi] going against the advice of the finance ministry’s permanent secretary, who is on the same scale as the principal permanent secretary according to the country’s civil service codes. Truly some NAO reports must be written for gods, while others must be written for animals.”

Falzon lambasted the previous administration for selling the land on which the former Lowenbrau brewery was sited to construction magnate and PN benefactor Nazzareno Vassallo for a meagre €700,000 when it was worth some €8 million at the time [2009]. “

“Why would any government agree to sell land in 2009 for the price it was worth back in 1990?” the Labour MP questioned. “The report has called for political responsibility to be shouldered, but rest assured that no one will take responsibility for this.” 

‘Falzon ferociously attacking Auditor General’ - PN

The Nationalist Party in a statement said that Falzon had launched an attack against the Auditor General because his investigations into the land dealings revealed no wrongdoing on the part of Jason Azzopardi.

“In his speech, Falzon used words such as ‘hitting rock bottom’, ‘dirt’, ‘obscene’ and ‘shameful’, the sort of vocabulary used by those who have lost their argument and resort to insulting independent institutions who do their job,” the PN said. “Through his ferocious attack, Falzon is trying to punish the National Audit Office for uncovering collusion on his part in the Gaffarena scandal.”