Attorney General calls for freeze on whistleblower’s assets

The Attorney General has requested the seizure of assets belonging to Joseph Borg, 75 of Swieqi, who stands charged of blackmailing and defaming the name of Rita Schembri, head of the OPM's internal audit directorate, and a member of the OLAF supervisory board.

Borg was arrested in November for sending an email to Schembri, threatening her he would report her to OLAF, the EU's anti-fraud unit, if she did not pay outstanding dues to third parties who had sub-leased from Schembri the restaurant that Borg himself leased to Schembri.

Police Inspector Chris Pullicino said that once the Attorney General issued the articles at law which place Borg under indictment, defamation can carry a maximum one year jail term, which gives the State the power to call for a freeze on the accused's assets.

The request was met with incredulity by defence lawyer Daniel Buttigieg, who claimed it was absurd and that it required a serious review. "I cannot understand this. It doesn't make sense. If it were for drug trafficking fine, I would... but surely not a case of defamation," Magistrate Anthony Vella said on his part.

Vella said that if this was done "anybody charged of a crime could have his assets frozen."

The magistrate suspended the sitting until next month, while a ruling on the Attorney General's request is expected to be given from his chambers.

Borg is accused of threatening Schembri by an email on 19 November, saying that he would report her to government authorities if she failed to pay monies she owes to third parties, in litigation she has on her sub-leasing of his restaurant to them.

Borg is owed €22,000 by Schembri after the latter was found guilty by a civil court of breaching a lease agreement on a restaurant she rented from Borg. Schembri is also involved in court litigation with another sub-lessee, over who has to pay Borg further monies for a breach of the lease agreement.

Borg pleaded not guilty to the criminal charges instituted by the police on a complaint by Schembri, who was represented in parte civile by Pio Valletta.

Borg did not deny sending an email reporting Schembri to OLAF, the EU's anti-fraud office of whom Schembri is a member of its supervisory committee.

Rita Schembri - the permanent secretary who heads the OPM's sensitive Internal Audit and Investigations Department - is out on long leave pending an investigation by the Auditor General into reports carried by MaltaToday of her direct involvement in the acquisition of a 60% stake in the Casinò di Venezia - undeclared to the head of the civil service - and of having carried out private meetings related to the bid from her government office.

Also involved in the deal is Pio Valletta, whose services to Far East Entertainment's bid for the casino is understood to be a small shareholding.

Litigation between Borg and Schembri

Her problems with Joseph Borg result from her lease of his St Paul's Bay restaurant in 1995. Borg's contract obliged Schembri that any business she conducts inside the premises had to be 70% owned by her, and that Borg was entitled to 33% of any sub-leasing.

In 1998, the Schembris sub-leased the restaurant to Nigerian national Aderiyike Olibisi Lawal. But instead of declaring the Lm28,500 (€66,400) sub-lease agreement to Borg - who would have been entitled to Lm9,500 (€22,000) - Schembri and Lawal entered into a contractual agreement to set up Bistit African Ventures Co. Ltd, and share all profits equally.

In what Mr Justice Tonio Mallia described as "roundabout way of evading her contractual obligation", Schembri retained her 70% control of the bar by disguising the sub-lease to Lawal in her 50-50 agreement with him.

Borg only accidentally found out that Lawal was in business with Schembri when the Nigerian asked him why he was not willing to sub-lease the restaurant to him: according to Borg, Lawal said Schembri had told him Borg would never lease the place to an African man. It was here that Borg found out that Lawal was no ordinary employee, but the actual sub-lessee of the restaurant.

Schembri was served with a garnishee order for €22,129 and then ordered to vacate the premises in a subsequent judgement in 2006.

The Schembris have appealed the sentence and the judgement is expected this week.

The matter is further compounded by another court case in which Schembri and another sub-lessee - the one who succeeded Lawal who has since departed to the United Kingdom - are in litigation over who has to pay Borg his 33% share of the sub-lease.