[WATCH] Konrad Mizzi refuses to answer in Vitals court case initiated by Adrian Delia

Former health minister Konrad Mizzi refuses to answer questions when he is summoned as a witness in the court case initiated by Nationalist MP Adrian Delia to have the hospitals concession contract with Vitals rescinded

8 February 2021, 11:52am
by Nicole Meilak

3 min read

Konrad Mizzi entering court to testify in the VGH case initiated by former Opposition leader Adrian Delia (Photo: James Bianchi/MaltaToday)

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Konrad Mizzi's signature appears on an agreement that committed government to a €100 million termination clause with Steward Healthcare over the hospitals concession.

The agreement was presented in court today by Mizzi's former permanent secretary Ronald Mizzi.

The former minister refused to answer any questions put to him when he appeared in the civil case initiated by former Opposition leader Adrian Delia to rescind the hospitals contract signed with VGH and subsequently transferred to Steward. Konrad Mizzi only read out a statement in which he said any decisions were approved by Cabinet.

However, testifying before the former minister was his then permanent secretary Ronald Mizzi, who insisted that only the ministry’s legal counsel was involved in the negotiations with Steward and Bank of Valletta.

Ronald Mizzi appeared clueless over the €100 million penalty clause the government would incur if the hospitals concession had to be terminated for whatever reason.

“BOV had certain concerns regarding the case; over how the court might find these contracts to be null and void, or politically a change in government might nullify the contract, so they wanted extra security,” Ronald Mizzi explained.

Asked by Delia who would have known about this clause inside the ministry, Mizzi said no one below his position would have gotten involved in the negotiations.

But pressed further, Ronald Mizzi admitted he only found out about the clause through a Cabinet memo.

“You came to know about this clause as a fait accompli?” Delia asked, to which the former permanent secretary to Konrad Mizzi confirmed.

Ronald Mizzi testified that he wasn’t the one who gave the brief to the legal counsel to take on the negotiations.

Asked whether credit facilities were already in place when Steward were roped in to take over the VGH hospitals concession, Mizzi replied: “I don't know what to tell you.”

Konrad Mizzi was responsible for the concession agreement that saw three public hospitals – St Luke’s, Karen Grech, and Gozo General Hospital – being transferred to Vitals Global Healthcare (VGH) in 2015.

VGH eventually fell short on its commitments and the controversial multi-million-euro concession was transferred to American company Steward Healthcare.

Delia is arguing that the VGH deal was vitiated and wants the concession agreement torn up to have the hospitals returned back to the public.

A damning National Audit Office report on the tendering process that awarded the hospitals concession to VGH found collusion after some of the investors in the consortium had, months before the request for proposals was published, entered into a memorandum of understanding with Malta Enterprise over a similar deal.

The NAO also found that VGH had secured a letter of commitment for financing from a bank in India even before the government published the RFP, raising further doubts on the fairness of the tendering process.

In a short statement Mizzi read out in court, he said that Cabinet was involved in all decisions.

He then refused to answer any of the questions put to him because of “pending magisterial inquiries”.

Mizzi’s lawyers argued that they advised their client not to answer any questions unless he is given full disclosure on the pending inquiries.

14:03 Thank you for following. A summary of proceedings will follow shortly. Kurt Sansone

14:03 Delia, Debono and Depasquale discuss logistics for the next hearing, specifically regarding the documentation requested from Ronald Mizzi. The next sitting will be held on 1 March at noon. The sitting has ended. Kurt Sansone

14:01 Mizzi steps off the witness box and leaves the courtroom with his lawyers. Kurt Sansone

14:01 Delia asks when the former minister found out that a magisterial inquiry had been opened regarding this case. Mizzi doesn't remember, but says it can easily be checked. Judge Depasquale asks whether any other magisterial inquiries had been opened when Mizzi testified before him, but the former minister says he does not remember. Kurt Sansone

14:00 However, Delia tells the judge that he would like at least to ask one question. Mizzi steps up to the podium again. Kurt Sansone

14:00 Mizzi's testimony has ended. Kurt Sansone

13:59 Mizzi’s lawyer, Carol Peralta remarks over the way questions are being put. “This isn't a street balcony,” he says. Kurt Sansone

13:59 Debono: “Why did we commit ourselves to €70 million more when they hadn't fulfilled any commitments?” Kurt Sansone

13:56 Mizzi is shown a document and he confirms his signature on it. Kurt Sansone

13:51 Debono asks about Cabinet meetings, of which Mizzi says that one could look at the minutes of these meetings to check the details. Judge Depasquale says the court has no copies of such minutes. Kurt Sansone

13:51 “Ma nirrispondix (I won’t answer),” Mizzi says. Kurt Sansone

13:50 “Vitals had to fulfil certain milestones. Why did you authorise this transfer [to Steward] before these milestones were met?” Debono asks. Kurt Sansone

13:50 Debono repeats a previous question regarding Projects Malta, a representative of which testified before the court saying that their job was simply administrative. Mizzi doesn't respond. Kurt Sansone

13:48 Mizzi, of course doesn't respond. Kurt Sansone

13:48 Debono asks him whether the MoU was a done deal. “This incriminates you doesn't it?” the lawyer tells Mizzi. Kurt Sansone

13:48 Konrad Mizzi is asked about a detail in former finance minister Edward Scicluna's testimony, but chooses not to respond. Kurt Sansone

13:47 Debono asks why he went forward with the deal when no due diligence was carried out. Mizzi doesn't respond. Kurt Sansone

13:43 Debono asks where exactly Mizzi was involved in the negotiating process, but the former minister remains adamant on not responding to any questions. Kurt Sansone

13:41 “Ma nirrispondix,” Mizzi says. Kurt Sansone

13:41 Debono tries again: “Several parties denied carrying out due diligence. What do you have to say about this?” Kurt Sansone

13:40 Depasquale explains that had Mizzi not already testified in a previous sitting, he wouldn't have had to testify today. His previous testimony set a precedent, the judge notes. Kurt Sansone

13:37 His attempt is futile. Mizzi chooses not to respond. Kurt Sansone

13:37 Depasquale says that they should try and focus on questions that Mizzi feels will not incriminate him. Debono takes another stab at a question relating to Mizzi’s previous testimony. “Was the MoU a done deal?” Kurt Sansone

13:36 Debono continues to press Mizzi for an answer, asking him whether this question can incriminate him. Kurt Sansone

13:36 Debono makes another attempt, and asks when Mizzi learnt about the MoU. Mizzi chooses not to answer. “I am saying that, at his moment in time, while I've done nothing wrong, I've chosen not to answer and incriminate myself,” Mizzi says. Kurt Sansone

13:34 Depasquale tries to bring order. He suggests that Delia and Debono see all the side-letters that will be brought by Ronald Mizzi in the next sitting, but there is uproar again in the courtroom – Delia and Debono insist on asking their questions today. Kurt Sansone

13:33 All parties are going back and forth over this issue. Mizzi and his defence team say that this is a “very unfair” situation. Kurt Sansone

13:32 Mizzi continues to insist that he would not like to comment. “My preferred option is to not say anything until I receive full disclosure over other magisterial inquiries,” he insists. Kurt Sansone

13:31 Debono again asks when Mizzi found out that the MoU existed - whether it was before or after the RfP was published. Kurt Sansone

13:29 Delia argues that, with every question, Mizzi should make a statement that his answer could incriminate him, and the court decides whether it is incriminatory or not. Kurt Sansone

13:27 Mizzi adds: “I honestly feel that my fundamental human rights are being challenged.” Kurt Sansone

13:26 “Our position is not to answer questions while other magisterial inquiries are ongoing,” Mizzi rebuts. Kurt Sansone

13:26 Depasquale explains that what Debono is asking about was already said by Mizzi in a previous sitting. Kurt Sansone

13:26 The judge tells Mizzi: “You only have a right not to answer if something will incriminate you, but if I ask you what the weather is today, it doesn't incriminate you.” Kurt Sansone

13:25 But Mizzi is adamant and says that he will not reply. Kurt Sansone

13:24 Mizzi refuses to answer. Debono shoots back: “Does this incriminate you in any way?” Kurt Sansone

13:24 Debono: “You also testified that you knew about an MoU, but that you didn't see it. All you saw was a presentation given to you and Chris Fearne. Did you see this MoU at any point, signed by Chris Cardona?” Kurt Sansone

13:23 Again, Mizzi doesn't respond. Debono is asking about things Mizzi had previously testified on. Kurt Sansone

13:22 Debono asks: “The health ministry led by Dr Chris Fearne: what was it involved in?” Kurt Sansone

13:22 “I don’t want to answer (Ma nirrispondix),” Mizzi replies again. Kurt Sansone

13:21 Debono asks another question. “Projects Malta said they were only involved in moving documentation from one place to another. What do you have to say about this?” Kurt Sansone

13:20 “I don’t want to answer,” Mizzi says. Kurt Sansone

13:20 Lawyer Edward Debono asks him about his previous testimony, where he said there was a line of delineation between the health ministry and Projects Malta, a government entity. Debono notes that Projects Malta looked into elements relating to the competition process, while the ministry was concerned with the costs of the programme. Kurt Sansone

13:18 Mizzi says that his peers in cabinet were active in every cabinet decision. Kurt Sansone

13:17 Mizzi is going over the timeline concerning the request for proposal (RFP) the government had issued for the three public hospitals to be transferred on concession to the private sector. Kurt Sansone

13:15 Mizzi begins reading his statement. Kurt Sansone

13:15 However, the judge quickly fires back. “The court isn't parliament, and it isn't a market where you can shout as you please. The court demands respect,” the judge says. Depasquale even threatens to kick Delia out of the courtroom if it happens again. Kurt Sansone

13:14 Mizzi says that he will not answer questions after his statement but Delia speaks out in a fit of anger, shouting that Mizzi has no right to dictate the procedures of the court. Kurt Sansone

13:13 Mizzi asks to make a statement to the court. The judge allows him to do this before any cross-examination starts. Kurt Sansone

13:10 Peralta also dictates a statement to the court. He repeats that several magisterial inquiries are open and affect his client. Kurt Sansone

13:08 Debono dictates a statement to the court. He argues that given Konrad Mizzi’s testimony on 29 November, he cannot at this stage choose not to testify and must answer every question unless it incriminates him. Kurt Sansone

13:07 Judge Depasquale says that the testimony must go on given that the case is ongoing. Kurt Sansone

13:06 Peralta: “There are magisterial inquiries that concern various ministries, which Mizzi was part of. Unless we have disclosure over those inquiries, he has been advised not to testify.” Kurt Sansone

13:06 Debono argues that, given he has already testified in this case, Mizzi should testify. “If he feels that a question may incriminate him, he can refuse to answer,” Debono says. Kurt Sansone

13:05 Mizzi makes a quick comment. “At this stage, we would prefer not to testify until we receive full disclosure over other inquiries,” he says. Kurt Sansone

13:05 Lawyer Edward Debono and Judge Depasquale remark that Mizzi has already testified at length in this case. Kurt Sansone

13:04 Former magistrate Carol Peralta, who is legal counsel to Konrad Mizzi, makes a quick comment over other magisterial inquiries that are open and that affect this case. “We advised our client that, at this stage, he should not testify,” Peralta says. Kurt Sansone

13:02 Former minister Konrad Mizzi will now begin his testimony. Mizzi first says that he hadn't appeared last time because he wasn't informed of the sitting. Kurt Sansone

13:02 QUICK RECAP: Tourism permanent secretary Ronald Mizzi was asked about a side agreement signed between Bank of Valletta, the government and Steward Healthcare, after the American company took over the hospitals concession agreement from VGH. In the agreement, government accepted to take on any debts that Steward might incur and pay a termination fee of €100 million, if for whatever reason the concession is rescinded. Kurt Sansone

13:01 Ronald Mizzi's testimony is suspended to the 1 March. The court authorises him to present all documentation that has been requested throughout today's hearing. Judge Depasquale says that he doesn't need to appear in person, so long as the documentation is presented as requested. Kurt Sansone

13:00 Mizzi: “I have no visibility over what has or has not been achieved.” Kurt Sansone

12:56 Debono is pushing on Ronald Mizzi over the failure of Vitals and Steward to fulfil their contractual obligations. Mizzi passes the buck onto the health ministry, saying that they had taken over the contract. Kurt Sansone

12:52 Lawyer Edward Debono: “Vitals had to fulfil various milestones as stipulated by the temporary emphyteusis arrangement, but they failed to honour these obligations. Why did government commit itself to a further €70 million if a court finds the contract to be null and void?” Kurt Sansone

12:48 Delia asks, almost stating, that government was ready to pay for the inefficiencies of a foreign company. However, the defence team argues that this is a question of interpretation regarding the contract. Kurt Sansone

12:48 Delia keeps pressing him regarding what the contract stipulates if Steward do not obtain the necessary credit facilities to fulfil the concession agreement. Kurt Sansone

12:47 Ronald Mizzi appears clueless. “I don't know what to tell you.” Kurt Sansone

12:46 Delia: “When Steward was brought in, were credit facilities in place?” Kurt Sansone

12:41 Delia asks who gave the brief to the legal counsel to take on the negotiations. Ronald Mizzi says it wasn't him, and that he never spoke to the legal counsel about this clause. Kurt Sansone

12:40 “You came to know about this clause as a fait accompli?” Delia asks, to which Mizzi confirms. Kurt Sansone

12:40 Ronald Mizzi says he found out about the clause through a Cabinet memo. Kurt Sansone

12:39 Delia picks at Mizzi, questioning who would have known about this clause. Ronald Mizzi says that no one below his position in the ministry would have gotten involved in the negotiations. The judge and Delia remark that it had to be either Ronald Mizzi or Konrad Mizzi to organise negotiations over the clause. Kurt Sansone

12:36 Ronald Mizzi confirms that the legal counsel within the ministry was the only party present in negotiations with Steward and BOV over the €100 million clause. Kurt Sansone

12:34 “BOV had certain concerns regarding the case; over how the court might find these contracts to be null and void, or politically a change in government might nullify the contract, so they wanted extra security,” Ronald Mizzi explains. Kurt Sansone

12:31 Delia asks what led government to get involved into the debt obligations of this company. Kurt Sansone

12:31 Adrian Delia asks whether BOV was involved prior to Steward entering the agreement. Mizzi is unaware, but to his knowledge BOV only came into the picture when Steward did. Kurt Sansone

12:30 Ronald Mizzi explains that the tri-party agreement was signed between the government, Bank of Valletta and Steward Healthcare. There was a legal team negotiating with BOV and Steward, but the bank asked for a guarantee from government. The government pushed against this but Steward maintained that they shouldn't carry the risk burden if the contract is terminated. Steward and BOV agreed that government will be liable to pay the debts plus €100 million in case of default. Kurt Sansone

12:29 Delia mentions the existence of the €100 million clause, and asks Ronald Mizzi to elaborate. Kurt Sansone

12:28 Delia comments that if among the documents held by the court, there appears to be missing evidence or documentation, it should be passed on to the court. Judge Francesco Depasquale clarifies to Mizzi, that all side agreements or contracts linked to the case ought to be exhibited in court. Kurt Sansone

12:26 The €100 million termination clause saw the government assume liability if the concession agreement is rescinded. Kurt Sansone

12:22 Mizzi says that there were plenty of side letters. Debono asks that he present all copies of side letters in a future sitting. Kurt Sansone

12:22 Debono: “Apart from this agreement, were there other agreements or side letters relating to this contract, between 2015 and 2020? Was this the only side letter?” Kurt Sansone

12:21 He passes on the document to the judge. Kurt Sansone

12:21 Ronald Mizzi is asked to present an addendum to the concession agreement that includes a €100 million liability clause, but he clarifies that there is no addendum per se. “I assume you're referring to a tri-party direct agreement,” Mizzi says. Kurt Sansone

12:16 The hearing is starting. Lawyer Edward Debono, who is representing Adrian Delia, asks Ronald Mizzi, permanent secretary in the tourism ministry, to testify first and present the Vitals “side agreement”. Kurt Sansone

12:03 The court is wrapping up another case before proceeding to continue hearing the Vitals case. Kurt Sansone

12:02 The case is being heard in front of Judge Francesco Depasquale. Kurt Sansone

12:00 Former Opposition leader Adrian Delia had initiated a court case to have the controversial deal rescinded. Mizzi has been summoned as a witness. Kurt Sansone

11:59 Eventually, VGH failed to deliver on its commitments and the concession agreement was transferred to American company Steward Healthcare. Kurt Sansone

11:58 Mizzi was the responsible minister when the hospitals concession was awarded to VGH. The deal saw the private company take over three public hospitals - St Luke's, Karen Grech, and Gozo General Hospital. Kurt Sansone

11:57 Former health minister and now independent MP Konrad Mizzi has arrived in court, accompanied by his lawyer, Jean Paul Sammut. Kurt Sansone

11:55 Good afternoon. Kurt Sansone

Nicole Meilak is deputy online editor and IĠM press awards (Most Promising Journalist) wi...