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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
10 July 2024, 9:36am
Matthew Agius
Matthew Agius
2 min read
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.
Matthew Agius is Senior Reporter on Law and Court Affairs at MaltaToday.
He is also a Leg...
“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.”
“I remember Ram Tumuluri signing the documents. I don’t remember the seals, but the signature I remember.”
“My colleague is better placed to answer. I was heavily pregnant at the time and could not carry the boxes myself.”
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.
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.”
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.
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.”
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.
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.
“Did you or anyone from PwC testify before that inquiry?”
“No.”
“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.
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.
The same happens with the subsequent witness, Projects Malta’s Chief Operating Officer, Eman Schembri.
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.
"Does he have a name?" asks the magistrate.
"Mr Mizzi," Wait says.
"Ronald Mizzi," Filletti says.
“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.
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.
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.”
David Galea had been the chairman of the contracts drafting and negotiation committee, said the witness.
“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.
With regards to the scope of those terms, Galea replies: "You cannot go into detail, you cannot go into work instructions," the witness says.
“No,” the witness says. Galea does not know who had set the weighting.
“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.
“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.”
“Only one ministry was involved. The ministry for energy and health,” Galea replies.
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.
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.”
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.
“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.”
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.”
"You don't have a search function do you?" asks the witness.
"I'm lucky to have a laptop," quips the magistrate.
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.
“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.”
“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.”
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.
“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.
“Who was the chairman?” asks the lawyer.
“There were many people involved in several projects, representatives from ministries for energy and health….”
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.
Micallef said he only remembers small details about the committee’s work that stuck in his memory, “because of the nature of the story”.
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.
“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.”
“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.
“I don’t remember details but it was at a very preliminary stage.”
“I don’t remember details but it was at a very preliminary stage.”
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.
“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.”
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.”
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.”
“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.
“We would probably see the availability of the key people, I definitely didn’t decide it myself,” the witness says.
“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.”