Yorgen Fenech told police Electrogas deal was corrupt

Alleged Daphne Caruana Galizia murder suspect Yorgen Fenech wanted pardon to divulge names of masterminds and corruption inside Electrogas contract

The Tumas magnate, Yorgen Fenech, stands accused in court of having masterminded the assassination of journalist Daphne Caruana Galizia. But his requests for a pardon were denied three times by the Cabinet, despite having told police he could reveal details of corruption in the Electrogas deal
The Tumas magnate, Yorgen Fenech, stands accused in court of having masterminded the assassination of journalist Daphne Caruana Galizia. But his requests for a pardon were denied three times by the Cabinet, despite having told police he could reveal details of corruption in the Electrogas deal

The alleged mastermind behind the Caruana Galizia assassination told police investigators in November 2019 he could spill the beans over various major corruption scandals in return for a pardon.

But Tumas magnate Yorgen Fenech was denied a pardon by ministers of Joseph Muscat’s Cabinet, despite being alerted to allegations of corruption in several major projects that would have rocked Labour’s hold on power.

Various witnesses in the stormy Cabinet meeting that decided Fenech would not get a presidential pardon told MaltaToday that Fenech had told police investigators he was ready to reveal the names of other masterminds in the murder of Daphne Caruana Galizia, as well as details on graft and kickbacks linked to major government deals.

Fenech’s request was made in the presence of his lawyer, the former Commissioner of Police Lawrence Cutajar, deputy Attorney General Philip Galea Farrugia, and police inspectors Keith Arnaud and Keith Zahra. 

In his presentation to the Cabinet, lead investigator Keith Arnaud then told ministers that Fenech said he had information on corruption in the Electrogas deal, in which he was part of through his partnership with SOCAR of Azerbaijan and Siemens, and which formed the major policy plank in Labour’s election bid of 2013; as well as the Mozura wind energy park in Montenegro; but also about a particular financial transaction made through Hong Kong, apart from other potential cases of corruption. 

It was the same day that Joseph Muscat had withdrawn from the Cabinet meeting that discussed the pardon.

“Fenech told investigators he would reveal names and facts in return for a pardon,” one of the people present in that Cabinet meeting said. “The request was made to Muscat, who convened Cabinet and then retired to allow the rest of the ministers to decide on the request.”

The Cabinet deliberated until 3am when it decided not to give Fenech a pardon. That same day, Muscat made it publicly known he had received messages from people close to Fenech that unless he recommended a pardon, he would also be targeted by accusations.

But as one witness told MaltaToday, ministers were faced with a catch-22 on what to do with the suggestion that Fenech held the key to greater corruption cases.

“The corruption being alleged hit right at the heart of Muscat’s administration. At that point, there was no clear idea of what kind of corruption Fenech was alleging and how far it went. Pardoning Fenech days after he had been arrested was unthinkable, and outside the rage in the streets was palpable. To some people inside Cabinet, it would have meant opening a Pandora’s box to bring down the government,” an eyewitness source said.

But since the revelation of the Mozura wind energy scandal only last week, in which it is believed that Fenech’s 17 Black loaned millions to an offshore company to acquire the Montenegrin wind farm shares that were later sold at an inflated price to Enemalta, witnesses from the November Cabinet meeting now fear the worst.

“At that point in time, the details of the Montenegro scandal were unknown to Cabinet ministers,” another source who confirmed to MaltaToday details of the Cabinet meeting, said.

Yorgen Fenech is one of the shareholders of GEM Holdings, a group of investors that includes the Gasan group, which together with SOCAR and Siemens had won the public tender issued by the Labour government to build a new 200MW liquified natural gas plant at Delimara in 2014.

But it is now known that Fenech had deep personal and business ties with Joseph Muscat’s former chief of staff, Keith Schembri. When the Panama Papers broke in 2016, Schembri and energy minister Konrad Mizzi denied any wrongdoing in setting up two secretive offshore structures in Panama and corresponding trusts in New Zealand. The two men were attempting to search for international bank accounts that would receive millions. In 2018 – a year after the assassination of Daphne Caruana Galizia – it was revealed that the Panama companies had listed a mysterious Dubai company 17 Black as a target client, and that the owner of that company was Yorgen Fenech.

Apart from the proven nexus between Labour’s top brass and Fenech’s business empire, the revelations of the Montenegro scandal, where Fenech allegedly loaned money from 17 Black for the acquisition of shares in a wind farm later resold to state utility Enemalta, now spark fears that yet more controversial government projects are tainted by the same level of corruption.

The ongoing compilation of evidence against Fenech has so far confirmed that throughout 2018, both Muscat and Schembri were aware that the Malta Security Services were considering Fenech as a person of interest in the assassination.

Telephone conversations recorded by the middleman Melvin Theuma also suggest that Schembri kept a number of individuals, including Yorgen Fenech’s own business partner Johann Cremona, abreast of developments in the case.

The recordings also reveal that weeks before his arrest, Theuma was aware of a police raid on his property due to a money laundering investigation initiated by the FIAU; and that he could leverage his knowledge of the assassination and his ownership of recorded telephone conversations with Yorgen Fenech, to obtain a presidential pardon.

Theuma has also said that a former MSS officer working as security at Castille had been sent by Schembri to inform him that the three men accused with the murder would be granted bail.

Schembri has denied on oath having had this involvement in the case. “I think that my position made me the perfect target,” he told the court last week. “I would really go through fire for Yorgen Fenech but I never spoke to him about this case. Not even when I was getting close to him, I had to keep a straight face and pretend not to know.”

More in National