Caruana Galizia kickbacks allegation on CHOGM task force head defamatory, court finds

A court has found a 2017 article penned by the late Daphne Caruana Galizia on the former CHOGM task force head Phyllis Muscat, had been defamatory. 

The case was filed in May 2017 shortly after the publication of the article ‘CHOGM 2015 task force led by PM’s friend Phyllis Muscat asked hotels for kickbacks on delegate bookings’, but it was only decided four years later. 

Muscat, who today heads the Malta International Contemporary Art Space, was awarded €750 in damages. 

Caruana Galizia was assassinated just three days after filing her response to the case, in which she claimed her story was “fair comment on substantially true facts”; her three sons and heirs assumed responsibility for the case. 

On her part, Muscat told the court that the allegations in Caruana Galizia’s story had been false, saying that the commissions charged on the accommodation of CHOGM delegates in Malta were payable directly to the Central Bank of Malta. 

Caruana Galizia had published an email from the hoteliers’ lobby MHRA to their members, informing them of a CHOGM task force meeting to request a commission on hotel bookings for CHOGM delegates, and that member hotels were free to “negotiate the respective commission to be given directly with the CHOGM Task Force”. 

Muscat told the court that the task force’s request for a commission was to cover costs of the CHOGM conference, by making these payable to the government, and for rebates to the government for hotel services during CHOGM. “This payment never came to me, the committee or any committee member, but directly to the Central Bank... neither I, nor any committee member received any such commissions, neither directly nor indirectly. 

“Caruana Galiza alleged that in my capacity, I had requested an illicit payment, a kickback... it is clear that she was imparting on readers the allegation that I had personally benefitted from these commissions. This was an untrue and misleading allegation...” 

Muscat also complained in court that her name had been besmirched by the article in question, with serious allegations against her searchable on search engines, carrying international consequences. 

Witnesses Melvin Mallia and Jesmond Gatt from the Central Bank, and CHOGM task force member Paul Dalli, presented hotel invoices to the court amounting to well over €300,000 in commissions paid to the Central Bank by major hotels hosting CHOGM delegates. 

Caruana Galizia’s husband, in an affidavit filed to counter the accusation, said there was nothing in the article that suggested that Muscat was receiving “kickbacks”; and that the article imparted the notion that it was incorrect for the Maltese government to be effectively asking hotels to shoulder part of the cost of accommodating CHOGM delegates. 

Caruana Galizia’s son Matthew also testified, saying that he discussed the story with his mother and “observed that the collection of kickbacks was not being done for the exclusive profit of Phyllis Muscat, but rather was fully institutionalised”. 

“To make it clear that the collection of kickbacks was institutionalised and not done exclusively and personally by Phyllis Muscat, my mother published, as part of the blog post, a screenshot of an email that was given to her by a source. The email says clearly: ‘ ... the task force will be requesting a commission...’” 

Caruana Galizia further said that the task force should have requested discounted rates through block bookings, not request a commission which he insisted on defining as “a payment made ‘without legitimate economic rationale’ and equivalent in practical definition to a kickback.” 

Magistrate Grazio Mercieca applied, as in all defamation cases, the principles enshrined by Gateley, which invites judges to determine whether the words used are either comment or fact by understanding “how they would strike the ordinary, reasonable reader... Words must always be read in their context and the context of the piece as a whole may point to the conclusion that words which could, taken literally, be statement of fact are comment.” 

Magistrate Mercieca said he would not enter into an elaborate analysis of the word “kickbacks” except for the fact that the common man in the street was able to make a distinction between the word and any other term such as “commissions”. 

“[Caruana Galizia] referred to the payment of commission fees as ‘kickbacks’ from preferred hotels that had reached some agreement with the Task Force, possibly to the detriment of delegates who could have been charged higher rates. Such a course of action could have been termed ‘crass’, unethical, or ‘without legitimate economic rationale’, even to the detriment of the free market, but not illicit since it is not prohibited at law.” 

Mercieca said it was clear that ordinary readers could only infer the meaning of kickback as stated by the plaintiff. “She had every right to feel defamed by the publication...”