Oil trader George Farrugia had strong ties to Austin Gatt, nephew tells court

The CEO of a leading local car hire company has recalled an approach by a Nationalist minister’s aide in 2013, where he was asked to distance himself from documents published by the MaltaToday which revealed how disgraced oil trader George Farrugia – a director of the John’s Group at the time – had hidden around €6.8 million in profits from the family business..

In an affidavit presented in court this morning Christopher Farrugia, CEO of John’s Group and nephew of George Farrguia, explained how in 2010 he had noticed that his uncle had benefited from a sizeable number of tenders.

Further investigations established that George Farrugia had been transferring the money to offshore accounts belonging to other companies of his.

“At the time when we were not aware of all this,” the John’s Group CEO said,

“George Farrugia had close, strong ties to minister Austin Gatt,” Farrugia said, adding that not only would Farrugia boast that he knew the minister, but also claimed to have helped Gatt by supplying BMWs for the 2008 electoral campaign, to which he also said he had made substantial cash donations. The two would often meet informally in restaurants, he added. 

Enemalta fell under Gatt’s ministerial remit at the time. 

“George Farrugia was a middleman who used his friends in high places to get where he wanted to be,” Farrugia said.

He would use familiarity to take what he wanted, said the CEO, which in this case was information on what was going to happen in this sector.

“While George Farrugia was enriching himself, our companies were suffering,” the affidavit reads.

George Farrugia was asked to vacate his directorship of John’s Group shortly thereafter. Before he left, he had been confronted by his brothers and had told them that “if this becomes public, it will be the government’s undoing.”

Christopher Farrugia denied that his father or his brothers had any involvement in bribery, saying that the accusations they faces were based on “George Farrugia's own lies.”

He said that information garnered from the company email system showed that George Farrugia had formed a fiduciary company called Aikon Ltd for whom George’s wife, Cathy, would administer the invoicing. “The company was set up to receive commissions on oil tenders.”

He had calculated that George Farrugia had made some €6.8 million behind the backs of his business partners, and it was for that reason that the corporate leadership had decided to approach somebody who had the ear of the Prime Minister of the day, Lawrence Gonzi.

“That person was involved in the Prime Minister’s security staff. He was approached to pass on the story by means of files full of documents, proving that George Farrugia was laundering money through tenders won by Enemalta and bank transfers.”

Christopher Farrugia claimed that Gonzi had instructed this security officer to take all the information which he had just presented him with, and hand it to Godfrey Scicluna, who was head of the Malta Security Service at the time.

“Gonzi knew George Farrugia through his wife Cathy, who had been Farrugia's secretary at Mizzi house for around eight years. I found out... that this Scicluna, who had close political ties to the PN, had approached a person on Minister Austin Gatt’s secretariat and handed him the files. And from there on, nothing happened.”

In fact, a tax compliance investigation was initiated – but it was the directors of John’s Group who were investigated – not George Farrugia’s own companies.

When the documents were made public through MaltaToday, the pressure on Christopher Farrugia started to mount. The CEO said that he was told by Gatt’s aides that the story was causing untold damage to the minister and asked him to disassociate himself from the story.

He had refused, he said, and in doing so had also reminded the aide that his writings were in the public domain now. “I also reminded him that we are a family of staunch Nationalist supporters and that when we needed you to understand us, you stuck up for George Farrugia instead.”