Update 4 | Former Enemalta chairman Tancred Tabone to face trial by jury

State's witness George Farrugia placed former Enemalta chairman Tancred Tabone in a suite at the prestigious five-star President Wilson Hotel in Geneva, Switzerland, as one of the places where he handed him an envelope with US$20,000 in cash, as a kickback from oil consignments to Enemalta.

Farrugia told Police that he had purposely withdrawn the cash from his Rothschild Bank account and had agreed to meet Tabone at his hotel and hand him the envelope containing the money.

The witness also declared that Tabone would phone him every month to chase his share of kickbacks, and would meet him for lunch meetings at La Tana Del Lupo restaurant in St. Julian's. During these lunches, Farrugia alleged that he had handed Tabone cheques amounting to Lm10,000 (€23,300).

The new revelations were made by Assistant Commissioner Michael Cassar who continued giving evidence in the criminal proceedings against Tancred Tabone, 60 of Sliema, stands charged with aggravated corruption, trading in influence and money laundering.

Cassar revealed that the Farrugia told the Police that Tabone kept receiving kickbacks on oil procurement up to a year after he left the Corporation.

According to Farrugia, "Tabone still kept his influence inside Enemalta and had control over many things, namely because of his involvement in Island Bunker Oils Limited (IBOL)."

An important revelation Farrugia made to the Police was how it all started soon after Tabone was appointed as chairman at Enemalta in 2003, when he allegedly sent for Farrugia - being the local representative for Total and Trafigura - and told him: "listen stop giving money to Tarcisio Mifsud."

Mifsud, 68 of Zebbug, was the former chief financial officer at Enemalta, who was also charged this week for corruption.

According to Farrugia, that was the signal that Tabone wanted the money for himself, and that is when - by intervention of his consultant Frank Sammut - kickbacks were starting to come his way too.

Sitting with his legs crossed, arms folded, and at times with a hand to his mouth, Tabone closely followed Cassar's testimony, and at times was seen smiling and passing subtle remarks to contradict his prosecutor.

Tabone's towering persona was seemingly dwarfed when two of his former executives at Enemalta filed past him, and were asked by the prosecution to identify him as the person they once knew as their chairman, and the person who had signed the contract recruiting Frank Sammut as his consultant on petroleum matters in 2003.

Trafigura in the know

Faced by damning evidence published by MaltaToday on January 20 and January 27, which blew the lid on the commissions for oil scandal, Farrugia had started to talk even before he was granted a Presidential Pardon on February 10, and continued to reveal more since then.

According to Farrugia, the kickback system had started some time back in 1999 when he used to visit Frank Sammut - then chief executive of MOBC - for talks regarding bunkering facilities.

Farrugia - who back then was managing director of Powerplan Ltd, a subsidiary of his family's business John's Group - discussed bunkering issues with Sammut on behalf of French oil giants Total, and its subsidiary Totsa, over the possibility of bunkering fuels at MOBC's facilities which would have facilitated future tendering for Enemalta.

Sammut however, had invited Farrugia for a drive in his car, where he asked for a 50c kickback on every metric tonne of fuel which was bought by MOBC.

Farrugia accepted, and explained that he estimated to have paid Sammut a total of US$210,000 in kickbacks throughout the time he served as chief executive at MOBC, only to then up the tempo when he passed over as Tancred Tabone's consultant at Enemalta.

Assistant Commissioner Michael Cassar reiterated his previous deposition that Trafigura had in fact been awarded their first contract for the supply of 150,000 metric tonnes of low sulphur fuel oil in December 2003, just months after Sammut had taken his place as consultant, and within the oil procurement committee.

Farrugia told Police that Trafigura were introduced at Enemalta under Tancred Tabone and Frank Sammut's watch, and that is how the two were the key players who were in on the kickback system, to the extent that because of their high positions, they in fact had benefitted from the "highest commission rate" which from 50c went as high as US$1 per metric tonne.

While evidence was produced to show how Tabone was the person who had signed contract extensions with Trafigura, Assistant Commissioner Michael Cassar explained how Farrugia had brought over Trafigura's man for Malta Tim Waters.

"Farrugia told us how Tim Waters had met with Frank Sammut and discussed oil products and tenders while he was on the procurement board. At one point Sammut asked to speak to Waters privately and they talked for 20 minutes. They emerged and told Farrugia that Sammut had spoken on behalf of Tabone and the two were seeking to be paid commissions on the orders placed," Cassar told the Court.

Farrugia also told the Police that he wanted the payments to be made directly from Tarfigura into his Swiss bank account.

According to Cassar, the State witness told the Police that Trafigura were knowingly paying the kickbacks to Tabone and Sammut.

Farrugia meets Gatt

Farrugia himself took an interest in the privatization of the MOBC operation, having met energy minister Austin Gatt on 22 March, 2005 - as revealed in emails published by MaltaToday - where he asked whether the privatization of Enemalta would be as a whole, or fragmented according to its various divisions (electricity, petroleum and gas).

In another email on 21 February, 2005, Farrugia informed Total that the company had to "safeguard" those people who were assisting them in obtaining tenders from the state company, naming both Tabone and Sammut as the beneficiaries of the kickbacks.

When Frank Sammut was appointed as consultant to Tancred Tabone as Enemalta chairman in 2003, George Farrugia said that he knew the information some weeks before he was actually appointed.

On 7 July 2004, Tabone informed the Enemalta board that Austin Gatt had instructed him to terminate Sammut's contract. But Gatt himself told the police during questioning that Tabone's chairmanship, which was not renewed in 2005, was not because of some disagreement.

Sammut himself had received a Lm40,000 terminal benefit from MOBC after his post as CEO was terminated in 2003, and then he was appointed as a petroleum consultant to Tabone. "Gatt said it was not politically correct that he should have been re-engaged by the government... he said he did not remember Tabone objecting, and the decision in the first place was not related to any information he may have had on Tabone."

Farrugia and Aikon

Cassar also confirmed that Farrugia employed a system of invoices for Enemalta procurements, whose address and telephone numbers were 'invalid', and deliberately contained grammatical mistakes as noted by Frank Sammut himself during questioning.

He said police had established that George Farrugia himself was involved in the issuing of invoices for Aikon Ltd, whose name had changed from Petrotech in 2004. Intershore Fiduciary Services directors, who held the directorship of the company, told police that were never informed of the company's operations, and neither did they know about the bank accounts in Switzerland where Farrugia deposited Aikon revenues.

As revealed by MaltaToday, although Farrugia was importing oil through family business Powerplan, he was diverting funds to his personal company Aikon Ltd, but also siphoning the bulk to his private Swiss account.

Farrugia was arrested on 30 January 2013, on the strength of a warrant issued by Magistrate Miriam Hayman, and confirmed during interrogations that he was the director behind Aikon Ltd. In 2010, when still a partner with his brothers in the John's Group of companies, where he ran Powerplan oil services consultancy and representing Total, Tosta and Trafigura, he was accused of siphoning the profits into his personal company by his brothers. On 12 April, 2012, his brothers took legal action against him.

Sammut - enigmatic Enemalta consultant

Called to testify, Enemalta corporate services chief Anthony Bonello said that Frank Sammut, a petrochemist, was employed in May 1987 as a research director at the state utility and was also appointed a director on the fuel procurement committee up until 1990. He served as an advisor to parliamentary secretary for water and energy Ninu Zammit in 1988, and a consultant to the Enemalta board on gas and petroleum between May 1992 and April 1994, where he was again reappointed to the fuel procurement committee up untio 1998. Then he was employed as chief executive of MOBC in 2000 and after August 2003, consultant to Enemalta chairman Tancred Tabone up until August 2004.

The court asked Bonello why Sammut never featured anywhere on its human resources list. Bonello replied that Sammut only featured in the Corporation's minutes but never in official documentation. The witness could not answer who was paying Sammut, saying that this was not his competence. 

Seeking Trafigura

Under cross examination by Tabone's defence, Assistant Commissioner Michael Cassar said the police had been trying to contact Dutch oil firm Trafigura and their legal represenatives, as well as Tim Waters, who is apparently in the United States.

Cassar said that the Police are continuing with their intensive investigations and are seeking executives from both Total and Trafigura.