Vitals corruption case: Concession steering committee members 'unable to recall' chairman's name

The compilation of evidence against people allegedly involved in the Vitals scandal continues today

Two members of the steering committee that oversaw the public hospitals concession awarded to Vitals Global Healthcare were unable to recall in court who had chaired that committee.

The remarkable bout of contagious amnesia occurred as the compilation of evidence against former deputy prime minister Chris Fearne and Central Bank Governor Edward Scicluna who are facing criminal charges, together with the other 13 co-accused in connection with the fraudulent hospitals’ deal, continued before magistrate Leonard Caruana on Wednesday.

Joseph Micallef, who told the court that he provided administrative support to the steering committee, insisted that he had been supporting the owner of Beat Consulting Ltd, David Galea, in work it was performing for the committee. On the witness stand, Micallef was unable to recall any useful detail, repeatedly failing to answer the questions put to him.

Remarkably, Micallef said he did not remember how he had been appointed to the committee. He initially told the court that it had been an informal arrangement, only to then be confronted with an email that he had been sent as a letter of appointment.

Neither could the next witness, Micallef’s fellow committee member David Galea, recall much about his steering committee days, and in fact told the court that he did not have any formal role in it.

Pressed on the witness stand by lawyer David Farrugia Sacco for the name of the chairman, Galea also initially appeared not to know. After some prevarication, Galea named Joseph Rapa and Ronald Mizzi, respectively the former and present permanent secretaries at the Ministry concerned.

Also testifying today was Projects Malta CEO William Wait. He was also asked about the steering committee. A report by the National Audit Office stated that disgraced former health minister Konrad Mizzi directly participated, as did officials from his secretariat, the permanent secretary for the energy part of the ministry, together with Projects Malta officials and third parties who had been outsourced.

Wait had initially testified to the steering committee being led by Galea, but corrected himself after reading the minutes which stated that it had actually been led by the permanent secretary to the Ministry of Energy and Health.

14:02 The sitting is over. The case will continue tomorrow. Thanks for following today’s hearing with us. We will be uploading a full write-up of the day’s events shortly. Nicole Meilak
14:01 Tomorrow lawyer Stefano Frendo, Clemente Mifsud Bonnici, Stefan Attard, George Gregory, a representative from the Contracts Department, the director of the budget office, lawyer Andrei Vella, Joseph Camilleri and a representative of the Malta Business Registry will be among the witnesses. Nicole Meilak
14:01 The defence exempts the next scheduled witness, Andrew Sammut, from having to testify, as Attard’s testimony had rendered it superfluous. Also exempted from testifying is George Gregory, Managing Partner of RSM Malta. Nicole Meilak
13:52 Claudine Attard, PwC director of consultant services, is called to the stand. Replying to a question from the court, she said that she was not involved in the client onboarding process. The parties exempt her from testifying. Before she leaves the courtroom, the court instructs her to inform Pace Ross that she is to testify tomorrow and bring with her all the letters of engagements PwC had in connection with this project. Nicole Meilak
13:52 In view of the PwC representatives’ testimonies, the defence adds Lucienne Pace Ross in her capacity as the director responsible for client onboarding to its list of witnesses. Nicole Meilak
13:48 Filletti asks whether PwC had provided services to VGH or Steward. They had, she replies. “There were two letters of engagement. One was a review of the model for the financers, a UK based firm who had requested a review of the model. There was another letter of engagement in relation to the evaluation estimate of the setup of the concession at that point in time.” Nicole Meilak
13:48 Filletti asks what companies were subsidiaries of Bluestone. She doesn’t remember, but when asked about VGH she says it was incorporated at the time. “On the financial side, there was drafting from us that supported that bid.”

“And you didn’t know that VGH was a part of it?” challenged the lawyer.

“I did. To me it was a company set up to respond to the RfP. Owned by Bluestone.”
Nicole Meilak
13:45 Magistrate asks Spina to explain what PwC’s role had entailed. The witness says it was assessing the financial aspect and took on a more extensive role as project managers. She was involved in the business plan aspect. An international architecture firm was needed and this involved expenditure, so she had dealt with that aspect.

“I remember Ram Tumuluri signing the documents. I don’t remember the seals, but the signature I remember.”
Nicole Meilak
13:44 Montalto asks why Deborah Chappell had been sent to present the documentation they had prepared. “I don’t remember why. I don’t remember the details. I can only speak for myself. I did not deliver the documentation.”

“My colleague is better placed to answer. I was heavily pregnant at the time and could not carry the boxes myself.”
Nicole Meilak
13:43 Angelique Spina from PwC takes the witness stand next. She clarifies that she is not an auditor and also asks for dispensation from secrecy obligations from the court.

She tells the court that a risk management team, that had been led by Lucienne Pace Ross, had assessed Ram Tumuluri. She had been involved in the review of the business plan, ensuring it was aligned to the requirements. As part of the project management process, they would request documentation.
Nicole Meilak
13:41 The MoU was specifically about the Gozo General Hospital and not on three state hospitals, he says. The inquiry report shows that Deborah Gatt from PwC was summoned before the inquiring magistrate.

Filletti confronts the witness. “An expert in the inquiry reported that the tendering process had been vitiated and that the MoU was already catering for the entire RfP. Is that assertion correct or not?”

“It’s subjective. I can’t give a factual answer,” Ganado replies. “All I can say is that the MoU referred specifically to Gozo General Hospital.”  
Nicole Meilak
13:34 Prosecutor Refalo asks what the witness meant when he said the scope of the process changed.

Ganado replies that they had initially been approached for the Gozo General Hospital, but then the government had issued an RfP which included Karin Grech Hospital and St Lukes Hospital too.
Nicole Meilak
13:29 PwC’s involvement ended with the submission of the proposal. They had not participated in the negotiations and discussions between Bluestone and the Government. “We assisted our client in the run-up to the bid.”

Debono asks again about whether the firm testified in the inquiry. “I personally did not and I wouldn’t think any of our staff was, unless bound by secrecy.”
Nicole Meilak
13:27 There were many things which had to be done within a very short period of time, Ganado said.

How much time was there? Debono asks.

“The tender was issued on 27 March, after the submission of the Gozo Business Plan in January we were no longer involved.”

There were no red flags because the scope of the project had changed to include a public tender, he explains.
Nicole Meilak
13:26 “They had told us that the starting point was that the Memorandum of Understanding gave us three months to present a proposal to the government of their plans for the hospitals concession.”

Debono asks again whether there were any red flags in the onboarding process. “Bluestone was our client. At that time, we didn’t see any reasons…” The lawyer interrupted the witness, asking him to explain the onboarding process.

Ganado replies that he did not handle that aspect. That had been handled by PwC’s risk management partner, Lucienne Pace Ross, he says.
Nicole Meilak
13:18 Debono asks about the magisterial inquiry conducted by Magistrate Gabriella Vella “with all due respect to her and her integrity”.

“Did you or anyone from PwC testify before that inquiry?”

Nicole Meilak
13:17 Ganado tells the court that in October 2014 first discussions were held with Ram Tumuluri, who was representing Bluestone. Franco Debono asks about what the client onboarding process involved.

“Upon our first contact with Bluestone Special Situations, we asked for some KYC to know who we were dealing with.” PwC’s risk management function then looked into them.

“At the time there weren’t any flags.” Crossrange had been indicated as the possible company in formation.
Nicole Meilak
13:17 “Our involvement was in Bluestone Investments,” Ganado says. “They were clients of ours. We had been asked to help them prepare a business plan and social impact assessment of Gozo General Hospital. Then we had a request to assist them on the RFP for the three hospitals.” Nicole Meilak
13:13 Michel Ganado, a partner at PwC, is next on the stand. He asks the court to release him from the obligation to professional secrecy. “So, you don’t have dispensation from your clients?” asks the court. The witness replies that he does not.

Filletti, Debono and Montalto all submit to the court that the witness cannot be released from professional secrecy without the consent of his client.

The court, after consulting with the Professional Secrecy Act, dictates a decree noting that the witness said he was bound by professional secrecy because he worked with an auditing firm. The court, observing that Zammit was not an auditor, released him from any obligation to secrecy.
Nicole Meilak
13:12 Committee member John Valenzia is the next witness, having been summoned by the defence. He takes the stand, but is told that the issues that he was going to be questioned about had been resolved and is dismissed.

The same happens with the subsequent witness, Projects Malta’s Chief Operating Officer, Eman Schembri.
Nicole Meilak
13:03 Franco Debono asks the witness about a foreign law firm that he had mentioned earlier - Weightmans. “They were lawyers who supported the committees. The negotiating committee,” Wait says.

Roberto Montalto asks Wait who the committee would receive applications from.

“Generally they would be sealed documents. I never met the individuals who submitted them.” It could be a simple messenger who delivered them, he said.

No further questions. Wait steps off the stand.
Nicole Meilak
12:59 Filletti asks about Projects Malta representatives sitting on the steering committee. After some suggestions, Wait tells the court that they had been appointed by the permanent secretary at the time.

"Does he have a name?" asks the magistrate.

"Mr Mizzi," Wait says.

"Ronald Mizzi," Filletti says.
Nicole Meilak
12:59 Under cross-examination by Filletti, Wait confirmed that he had been head of Projects Malta. Pressed about the RfP and whether Projects Malta was the contracting authority in the public procurement process, Wait insisted that Projects Malta was the “administrator.”

“We were the administrators, we ensured the boxes [containing the bids] were opened in the presence of a notary and then handed over to the evaluation committee.”

"This was the only concession done by Projects Malta. There were other private-public-partnerships but not a concession," Wait says.
Nicole Meilak
12:52 “The role of Projects Malta was to facilitate but it was never expected or asked to make decisions,” Wait said. “The project was first mentioned in the budget speech for 2015. Then there was the RFP, then the steering committee…”

Various committees would make recommendations and the Cabinet of Ministers would make the final decisions. Cabinet had approved the care services concession, he said, and Konrad Mizzi was present for an update on relocation activities and to sign the contract.
Nicole Meilak
12:49 Franco Debono asks who appointed Galea. “Projects Malta paid him.” He agreed with the lawyer’s suggestion that Galea’s name might have been put forward by someone else.

Projects Malta had been legally assisted by Ganado Advocates and Mifsud Bonnici and Associates. Ganado had been engaged before the witness started working with Projects Malta, he said, adding that the company had not been involved in the drafting of the RFP.

“So you received a completed RFP?”

“Yes. We were just five people at Projects Malta.”
Nicole Meilak
12:45 Lawyer Franco Galea asks whether the name Bradley Gatt meant anything to him, “I’ve never heard of him,” Wait replied.

David Galea had been the chairman of the contracts drafting and negotiation committee, said the witness.
Nicole Meilak
12:45 WIlliam Wait, former CEO of Projects Malta, is called to the stand. He held that position from 2015 to 2017.

“We were the administrators of the project. I joined Projects Malta after the RFP had been issued.”

On the steering committee, he said Projects Malta dealt with the land aspect. There were already existing offices at Saint Luke’s, a police station, blood bank and a squatter with a llama farm amongst other things, he said. A team from Projects Malta was entrusted with consolidating the land aspect, he said.
Nicole Meilak
12:06 The court calls a break. The sitting is suspended till 12:30. Nicole Meilak
11:56 Prosecutor Francesco Refalo cross-examines the witness about the terms of reference.

With regards to the scope of those terms, Galea replies: "You cannot go into detail, you cannot go into work instructions," the witness says.
Nicole Meilak
11:55 In the criteria, the fit and proper test was weighted at 5%. “Did they have any discretion to vary”” the lawyer asks.

“No,” the witness says. Galea does not know who had set the weighting.
Nicole Meilak
11:53 Lawyer Ezekiel Psaila asks how the committee had ensured that the terms of reference had been drafted objectively.

“You cannot completely eliminate subjectivity,” replies the witness. “There is an element of professional judmgnent.”

“Did the same criteria apply to every bidder?” the lawyer asks. They did, the witness says.
Nicole Meilak
11:46 Filletti confronts the witness with the Auditor General’s conclusions. The court clarifies the question: “What was the involvement of the branch of the ministry which handled health in the project?”

“The contact that I would have was with the steering committee at that level,” replies the witness, adding that experts in the respective fields would be consulted on the technical aspects. He mentions Dt Stephen Zammit, who heads Karin Grech hospital, and Dr Nadine Delicata, who heads the Gozo hospital.

In response to a question from Tonna Lowell, the witness confirms that Zammit and Delicata had eventually been employed by VGH, “essentially government employees.”
Nicole Meilak
11:45 Filletti points out that the Auditor General had harshly criticised the project. He said there was a great schism between the finance and health ministries, and the health minister was not even consulted. “So on what basis was the bidder selected if the health ministry was not even involved?”

“Only one ministry was involved. The ministry for energy and health,” Galea replies.
Nicole Meilak
11:44 In reply to another question from the lawyer, Galea said he had never seen a similar bid document before nor had he ever discussed one like it. That document contained the “terms of reference” of the project, which was broken down into work streams. People would he chosen for these work streams on the basis of competency, said the witness. Nicole Meilak
11:44 Filletti has more questions. Besides participating in the steering committee, what would Galea do?

He explains that his role was to oversee the project. The project initiation bid document had come from Projects Malta and he had presented his report to the Steering Committee, Galea says.
Nicole Meilak
11:27 “After the hospitals would start operating, there were other aspects which were to come into play… it was an ‘all-inclusive fee’,” Galea told the court. This fee was graded and varied according to the levels of care provided by the individual hospitals, he added.

Asked whether there were other arrangements, Galea said there were. “There was an arrangement, a labour supply agreement, which I had no involvement in which was originally meant to be under the same team, but eventually another payment arrangement was reached.”
Nicole Meilak
11:26 In reply to questions from the lawyer, Galea explained that the HSDA (Health Services Delivery Agreement) was a specialised agreement tied to the healthcare aspect. “There were a number of templates with KPIs which had to be filled in. A separate team was engaged to monitor the service levels,” he said.

Thompson asks about the Health Service Delivery Fee. It had been limited to the services levels at that time, replies the witness. The payments were made according to the services being provided by the three hospitals. When milestones were reached, the fee would be revised.
Nicole Meilak
11:22 Thompson presses the witness to specify who appointed him to draft it. He replies that it was for the steering committee at the time.

“I remember I did it through Projects Malta, I presented it to the Steering Committee, on the date specified in the document.”

The lawyer asks who had been part of the committee. “I don’t know. As I said before, I did not have a position on the steering committee, I was invited to attend its meetings. There is a difference.”
Nicole Meilak
11:20 Lawyer Jonathan Thompson takes over questioning. He refers to a document in the acts of the proceedings, with the Beat Ltd logo. “It was a proposed structure for how the project could be managed,” explains the witness, “but we did not manage the project”.

The court asks why the document was drafted. “Who was the target audience?”

“The persons leading the initiative,” replied Galea. “At that time it was the steering committee, I believe.”
Nicole Meilak
11:10 The criteria are found. Debono points out that the criteria were given a percentage weighting. The level of discretion the evaluation committee had was limited by the parameters imposed by the RFP, suggests the lawyer. Nicole Meilak
11:08 The witness is shown the text of the RFP on two big screens in court. Galea is trying to find the award criteria in the RFP document.

"You don't have a search function do you?" asks the witness.

"I'm lucky to have a laptop," quips the magistrate.
Nicole Meilak
11:03 Debono asks under the remit of which ministry the project fell under. “There was one ministry: the ministry of energy and health under minister Konrad Mizzi.”

Debono asks whether Galea was responsible for setting up the terms of reference of the evaluation committee. The witness says that he had submitted a draft document to that effect but that he was not officially responsible for the evaluation committee's terms of reference.
Nicole Meilak
11:03 Galea explains that the clause means that the government has the right to ensure the financing it was providing is being used correctly. “It is a pretty standard practice from a risk management point of view,” says the witness.

“Because banks are a very important stakeholder in the process, there is a stage where the concessionaire must go to the bank and obtain a financing agreement, which he then shows to the government in order to decide whether to grant it or not.”
Nicole Meilak
10:56 He is now shown a slide projected on a screen which cannot be read from where the public and press are. Farrugia Sacco asks about the company structure proposed in July 2015.

“It didn’t happen like that. It was discussed with our internal counsel and proposed. Because you have two elements in the concession. We, rather the government, weren’t paying for capital expenditure… it was an RFP focusing on the service.”
Nicole Meilak
10:46 One of several teams he identifies was a team from the ministry, that he says was in charge of communications - giving updates on the project to the public “from a people point of view”.

He does not recall being present in the steering committee meeting where bids were presented. Nor does he recall the three bidders were mentioned, but says he does not exclude this.

Farrugia Sacco asks how the conclusions were reached. “When the bids were discussed, I don’t think I had been present.” He says, however, that he had read the report completed by the evaluation committee.
Nicole Meilak
10:40 Health Services Agreement had two elements: legal aspects and technical. These included KPIs, service delivery levels across the various services, technical input.

“We aren’t medical experts. My expertise is financial and management focused,” Galea said. He explains that he had dealt with the legal considerations and concession and the negotiation committee, he said.

The court grants the witness permission to expand on technical aspects of the project, which he does.
Nicole Meilak
10:35 Ganado had prepared a draft RFP, which Galea says he had some input in, but did not lead. Farrugia Sacco asks about minutes discussing the possibility of approaching banks to assess the bankability of the deal. Galea says that this had not happened in the end. Nicole Meilak
10:29 He confirms that the company he owns, Beat Ltd, had been engaged by Projects Malta. Farrugia Sacco asks whether the witness was a member of the steering committee. “I would attend every meeting. I don’t know if that answers your question. Now if someone has a list of the people who made up the steering committee, I don’t know, what I can say is that I would attend the meetings.” Nicole Meilak
10:28 Farrugia Sacco asks the witness to explain his role in the steering committee. “I would report on a number of areas. I was focused on the negotiation of contracts, particularly the concession agreement and I had some input to the RFP.”

“Who was the chairman?” asks the lawyer.

“There were many people involved in several projects, representatives from ministries for energy and health….”
Nicole Meilak
10:24 Micallef exits the courtroom. His colleague David Galea replaces him on the witness stand. Nicole Meilak
10:24 Filletti asks whether Micallef had any other contact with the hospitals project in another capacity. “I did not. I came out of it smoothly and sweetly and wasn’t involved after 2015.”

He asks the witness whether he had been involved in the RFP process. “My role was very administrative, mostly removing track changes and formatting. I definitely didn’t add any content myself. I was literally doing the work of an administrator.”

Asked who had contributed to the contents of the RFP, the witness says it was many different people and experts in their own field, but was unable to specify further.
Nicole Meilak
10:22 Filletti asks what the role of the committee was. “There were several work schemes: who handled operations, who handled agenda items etc.”

Micallef said he only remembers small details about the committee’s work that stuck in his memory, “because of the nature of the story”.
Nicole Meilak
10:22 The court asks what his area of expertise was, and the witness replies that it was operational excellence and lean management. “It’s not exactly my specialisation to do these things, but I helped out at the time on the project.” Nicole Meilak
10:20 The witness elaborates on what would be discussed. “At that stage it was one off….probably I was in my office, my understanding was that I would be taking minutes, helping out and so on.”

In response to further questioning the witness said he could not recall the cabinet decision to grant the concession, nor the month it was taken.
Nicole Meilak
10:19 The email was sent by Ronald Mizzi. “Did you know who Ronald Mizzi was at the time?”

“I knew he was a permanent secretary in the ministry,” replied Micallef.

The lawyer asks: “When Galea spoke to you, what did he explain and what did you understand the function of this committee to be?”

“The outline of the project was the privatisation of the hospitals… he asked me ‘can you help me on this project?’....It was the overall steering committee over this project.”
Nicole Meilak
10:17 De Marco refers to an email mentioning a company called Beat. She asks what “Beat” was.

“Beat was a consulting business through which, at the time, I provided outsourced services,” Micallef replied, saying that Galea was the person behind it.

Lawyer Stefano Filletti, who is assisting Ronald Mizzi, also asks about that email. “How would you receive payment? From the steering committee, the Government?”

“I would invoice Beat,” replies the witness.
Nicole Meilak
10:08 Asked how the committee had been set up, Micallef said he didn’t know. It was there when he was appointed to it. He says he thinks it might be OPM, but then backtracks as he is not sure.

“I don’t remember details but it was at a very preliminary stage.”
Nicole Meilak
10:08 Asked how the committee had been set up, Micallef said he didn’t know. It was there when he was appointed to it. He says he thinks it might be OPM, but then backtracks as he is not sure.

“I don’t remember details but it was at a very preliminary stage.”
Nicole Meilak
10:06 It’s Franco Debono’s turn to ask question. He’s representing Alfred Camilleri, Kenneth Deguara, Bradley Gatt and Robert Borg.

He asks who had appointed him to the committee. “I was a self-employed advisor at the time and my colleague, David Galea, would bring in projects and I would participate.”

Asked whether there was any formal appointment, Micallef says he doesn’t believe there was, not for him and not for David Galea. “It was quite informal,” he explains.
Nicole Meilak
10:05 Lawyer Giannella De Marco, representing Aron Mifsud Bonnici, takes over the cross-examination. She asks him to confirm a document listing the members of the steering committee meeting in April. The format looks familiar, he says.

“Were you present for the meetings?” asks the lawyer.

“This is a list of the people the minutes were distributed to, the participants in the meeting and those who had been excused.”
Nicole Meilak
10:01 “I would not get involved in the actual execution of the actions,” Micallef replies to a question about the discussion on preferred bidder key principles.

A note recorded on 24 July 2015 says the concession agreement established conceptual design - subsection of healthcare service delivery agreement, need to define health care services, subsidiary services and so on.

“I captured the information…what was discussed, but I never got really involved in the doing of the action.”
Nicole Meilak
10:00 The lawyer reads a minute which sets out the develop a draft set of service agreements for basis to assess the performance of the concessionaire throughout the concession agreement.

The witness says he is unsure whether the minute had been translated into management direction. “I would have captured what was said as an action.”
Nicole Meilak
09:59 “Regarding chairmanship as such, if there was anything I would have minuted it, but I don’t remember,” Micallef says.

“Who would give you direction?”

“At the time I would provide support….it was more the other person who would do that.”

Asked who he was referring to, he says it was his business partner David Galea.
Nicole Meilak
09:58 David Farrugia Sacco, representing James Camenzuli, asks who would coordinate the steering committee. Witness gives a non-answer. He asks who would decide on the committee meeting.

“We would probably see the availability of the key people, I definitely didn’t decide it myself,” the witness says.
Nicole Meilak
09:56 Joseph Micallef, a member of the concession steering committee, now takes the witness stand. Lawyer David Farrugia Sacco asks about his role. “It was a very short role… it was a very brief period May to November, five months in all and from what I remember about five meetings.”

“Do you remember who prepared the RFP and presented it to the Steering Committee?” asks the lawyer.

Micallef says he does not. “Probably, a number of different people were involved but I cannot put a name to it.”
Nicole Meilak
09:46 Tonna Lowell informs the court that the advice had been requested by Fearne, and declared that he was exempting the Auditor General from secrecy. Deguara steps off the witness stand. Nicole Meilak
09:44 The magistrate instructs the witness to exhibit the sealed document, which will be kept by the court until a government representative can confirm the exemption. Nicole Meilak
09:43 Prosecutor Francesco Refalo points out that, as the email was sent to the government by the State Advocate, and sent to the Auditor General at the request of the Government, an exemption from Government is required. "Deguara is not the right person to exhibit it." Nicole Meilak
09:43 The court says the document, an email sent by Soler in November 2021, will be held under seal, accessible only to the parties. Nicole Meilak
09:42 Charles Deguara returns to the witness stand this morning and is administered the oath. Last sitting he was asked by Tonna Lowell to exhibit a document, which he has brought with him today. He tells the court that the document contains matters which the State Advocate wanted under wraps. Nicole Meilak
09:38 Welcome to our liveblog! Senior court reporter Matthew Agius is inside the courtroom as proceedings are set to start any minute now. Nicole Meilak