John Bundy’s hush-hush €500,000 car deal breached PBS rules

The PBS CEO left the board of directors in the dark and ignored procurement rules when he signed a contract for the leasing of 14 vehicles for an unprecedented eight years

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Matthew Vella
2 October 2017, 7:30am
Pressure is mounting on PBS CEO John Bundy to resign over breaches in PBS procurement rules
Pressure is mounting on PBS CEO John Bundy to resign over breaches in PBS procurement rules
Pressure is mounting on PBS chief executive John Bundy, over a massive €500,000 leasing contract for motor vehicles carried out in breach of procurement rules. In minutes from a directors’ meeting seen by MaltaToday, the politically-appointed CEO was said to have ignored contract rules when PBS signed 14 different contracts for a total of €500,131 to lease cars for the unprecedented duration of eight years

Bundy, a television presenter appointed to the post last year, was said to have only once alerted the board of directors about the possibility of car leasing. But the contract itself was never green-lit by the board.

The only time the issue had in fact been raised at board level was back on 18 January, 2017, when Bundy referred to the PBS car fleet.

“[He] noted that the cars were now old. He had sought advice on whether to buy new cars or go for leasing, and found that it was cheaper to go for leasing.”

But it turned out that Bundy issued a very basic procedure, which in procurement is only employed for minor purchases, to secure the contact. This was to obtain three quotations from leasing suppliers.

However, the person who was actually responsible for procurement, corporate services manager Edmund Tabone, was completely sidelined and left in the dark about the deal. Instead, it was left up to Mario Micallef, the manager for advertising sales, to gather the quotations.

In total, 14 different contracts were signed for a total value of €4,415 monthly, plus VAT: for the contract duration of eight years, the amount totals €500,131. The directors said that the leasing of cars for a period of eight years was “not considered as the norm”. In fact, government procurement regulations for such an amount obliged PBS to issue a public tender.

Additionally, VAT can only be recovered on just that part of the fleet which are commercial vehicles. Indeed the amounts for each car – all Peugeots supplied by Burmarrad Commercials – vary from the cheapest being €230 (plus VAT), to the highest being €600 (plus VAT), which is the CEO’s car itself.

One of the more curious aspects of the deal is that – according to the minutes seen by MaltaToday – one of the cars is for the exclusive use of Natalino Fenech, the former PBS head of news, who in 2013 stepped down from his position after Labour’s election.

Former PBS head of news Natalino Fenech
Former PBS head of news Natalino Fenech
Fenech is now a University of Malta lecturer, but it is unclear what his contract’s severance terms contained. According to the directors’ minutes, Fenech is “still on PBS’ payroll with all perks and allowances”. The directors said that no mention of these details was ever made to the board by Bundy, except for the mention to replace the car fleet back in January.

It was only until the board summoned PBS financial controller Brian Galea, that it learned of the leasing contract’s details.

“Asked why this matter was not brought to the board, Galea noted that procurement falls under Edmund Tabone, manager corporate services. Asked whether expenditure of such nature was usually conducted via a tendering process, Galea responded in the affirmative.”

When asked for details of the contract by MaltaToday earlier this week, the ministry for justice and culture directed MaltaToday to PBS. The broadcaster’s chairman, Tonio Portughese, said: “As with any other commercial entity, such internal matters are not divulged in public but discussed confidentially at board level.”

But it is unclear whether news of Bundy’s lack of appreciation for PBS procurement rules will lead to his dismissal.

The revelations come in the wake of a no confidence motion passed by the PBS directors against Bundy.

Motion of no confidence

Earlier this week, MaltaToday revealed that the PBS’s board of directors had actually voted on a motion of no confidence against Bundy.

The secret vote delivered a unanimous verdict of no confidence, which was communicated to Tonio Portughese. But ultimately, it is minister Owen Bonnici who would have to assume responsibility for Bundy’s dismissal. Bundy was installed in his position without any formal call for applications for CEO, after the departure of Anton Attard, on a four-year contract.

In their letter to Portughese, the board of directors said they had convened to discuss the way Bundy “had, on several occasions, ignored the board of directors and taken decisions which required the approval of the board”.

The board said it considered Bundy’s attitude towards the PBS directors as one that showed a lack of respect.

“Worse than that, it shows a lack of awareness of what the relationship should be between CEO and the board of directors, which in terms of the law have enormous personal responsibility for everything that happens in the company.”

The directors said they were also faced with legal threats from companies when they attempted to reverse Bundy’s “arbitrary decisions”.

“These decisions were presented to the board as a fait accompli, and the directors were faced with threats of legal action against them personally and the company.”

The directors said they could no longer tolerate the situation and declared they had no faith in Bundy.

Contract not revealed by PBS

The national broadcaster has appealed a decision of the Information and Data Protection Commissioner to publish John Bundy’s contract, in a freedom of information request filed by the Times of Malta.

In defending its decision not to publish the information requested, PBS argued that doing so would have a negative effect on Mr Bundy, a former Radio 101 employee, and ex-Net TV head Mr Attard. It said the CEO was not paid through public funds, since his salary was drawn from commercial activity generated by the State broadcaster.

But the IDPC said the arguments raised by PBS did not hold water and it would be much better for transparency’s sake and in the public interest to give the information sought by the Times of Malta.

The IDPC said that PBS was given about €4 million from public funds to carry on with its public mission and insisted that “such funds are surely intended to cover the salaries, including those of the top management”.

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Matthew Vella is executive editor at MaltaToday.