Caruana Galizia public inquiry: Chris Fearne describes 'frosty' relationship with Keith Schembri

Deputy Prime Minister Chris Fearne is the latest Cabinet member to testify in the public inquiry into the murder of journalist Daphne Caruana Galizia

16 September 2020, 9:22am
by Matthew Agius

2 min read

Deputy Prime Minister Chris Fearne

Chris Fearne has described his relationship with former chief of staff in the prime minister’s office, Keith Schembri, as “frosty” when testifying in the Caruana Galizia public inquiry.

The Deputy Prime Minister said the relationship soured after he had raised concerns that Schembri was working against his bid to become deputy leader after the 2017 election.

Fearne said that after Panama Papers was exposed, the prime minister had talked individually to every minister on the future of then energy minister Konrad Mizzi.

Schembri not up for discussion

The prime minister had informed Fearne that Mizzi was not going to remain deputy leader or minister for health.

“On Keith Schembri, the PM had said that he had trust in him and he would decide on his fate. The PM had met ministers individually after Panamagate. The discussion was mostly on Konrad Mizzi. Keith Schembri was not up for discussion,” Fearne said.

Fearne also testified that former minister Konrad Mizzi had not informed him of a waiver he had given Steward Health Care not to submit a bank guarantee for the hospitals concession.

Mizzi was then tourism minister but was still responsible for Projects Malta that handled the hospitals concession deal.

Replying to a question from lawyer Jason Azzopardi, the deputy prime minister admitted that despite being health minister, Mizzi signed the waiver without informing him.

Fearne said that negotiations with Steward Health Care were still going on.

The deputy prime minister admitted he could have done more internally to keep power to account but insisted he was not aware of a kitchen cabinet, originally mentioned by Foreign Minister Evarist Bartolo when he testified in the inquiry.

In the previous sitting of the inquiry last week, former deputy PM Louis Grech told the public inquiry that 'a darkness fell over the country,' after Caruana Galizia's murder.

The public inquiry into the murder of journalist Daphne Caruana Galizia is tasked with, amongst other things, determining whether the State did all it could to prevent the murder from happening.

Caruana Galizia was murdered in a car bomb just outside her Bidnija home on 16 October 2017. Three men, George Degiorgio, Alfred Degiorgio and Vince Muscat, have been charged with carrying out the assassination, while Yorgen Fenech is charged with masterminding the murder.

Melvin Theuma, who acted as a middleman between Fenech and the three killers, was granted a presidential pardon last year to tell all.

The inquiry is led by retired judge Michael Mallia, and includes former chief justice Joseph Said Pullicino and Judge Abigail Lofaro.

11:15 That's it for today. Thank you for following. Kurt Sansone

11:15 Fearne has finished testifying. He steps off the stand and leaves the courtroom. The next sitting is on Friday with Education Minister Owen Bonnici expected to testify. Kurt Sansone

11:12 Fearne: “They had only been brought to my attention recently. As soon as they came into my possession I passed them on to the relevant authorities.” Kurt Sansone

11:12 Azzopardi: “Are such side letters to be placed under scrutiny?” Kurt Sansone

11:11 Fearne replies that he had no idea about the letters. “Often, they made sense... but no, I was not involved.” Kurt Sansone

11:11 Daphne Caruana Galizia had published a secret side-letter from Konrad Mizzi on the deal, Azzopardi says. Kurt Sansone

11:10 Fearne: “Yes.” Kurt Sansone

11:10 Azzopardi: “Basically, when he signed that waiver, Mizzi did not inform you as health minister.” Kurt Sansone

11:09 Fearne explains that this waiver only lasted till the end of February this year and negotiations are still underway. Kurt Sansone

11:09 Fearne: “Part of the obligations imposed on the concessionaire was a bank guarantee of €9 million. Vitals had done this. When the concession changed hands to Steward, I was informed that Steward did not have the guarantee. I had sent for their representatives and told them that it was unacceptable. Around that time, they had presented a letter giving a “parent company guarantee” that was approved by Konrad Mizzi. I had discussed this with Cabinet who opted instead to give Steward a breathing period to come up with this bank guarantee.” Kurt Sansone

11:03 Azzopardi says that in February this year, MaltaToday’s Matthew Vella reported that Konrad Mizzi had waived €9 million on the hospitals concession deal. The lawyer is reading from the newspaper report. He asks whether Fearne was informed of this. Kurt Sansone

11:01 There had been a discussion at Cabinet level on the Electrogas government guarantee, he recalls after being asked by Said Pullicino. Kurt Sansone

10:59 Fearne says he also became aware that the owner of 17 Black was Yorgen Fenech at the same time as everyone else [November 2018]. “What I remember was that I was surprised and then shocked as he had connections with other people,” he adds. Kurt Sansone

10:58 Fearne: “There were rumours swimming around, but believe it or not, I got to know of the date when it was announced.” Kurt Sansone

10:57 Lawyer Jason Azzopardi takes over questioning. “When were you aware of the 2017 election date?” Kurt Sansone

10:57 Asked about personal attacks on Caruana Galizia, he says: “I was never in favour of personal attacks.” Kurt Sansone

10:56 Questioning moves on. Fearne says he never met Yorgen Fenech or Brian Tonna at Castille and didn't even know what Karl Cini looked like. Tonna and Cini are partners in Nexia BT, the financial services firm that helped Mizzi and Schembri open companies in Panama. Kurt Sansone

10:55 Fearne: “I am convinced that Daphne Caruana Galizia was murdered to shut her up, why else kill a journalist. It could have been a sign to intimidate other journalists.” Kurt Sansone

10:54 He explains that the interview was carried out shortly after the arrest of the three triggermen and that he was hopeful at the time – and still is – that police would also solve other car bombings. In the interview, Fearne had said that freedom of expression in Malta was threatened. Kurt Sansone

10:52 Comodini Cachia asks Fearne about a Deutsche Welle interview he gave shortly after the Caruana Galizia murder. Kurt Sansone

10:50 Fearne says he didn't have information on what Gafa's role at OPM was. He explains that Gafa had refused to speak to him after the sacking. Kurt Sansone

10:49 Fearne: “When I was parliamentary secretary, Neville Gafa had an office at the ministry that was there from the time of Godfrey Farrugia. His position was to report to OPM. Every ministry had an OPM coordinator. Soon afterwards Konrad Mizzi had appointed him to FMS and coordinate things there. The day after I was made minister, I was informed by Mizzi's lawyer that Gafa might have been involved in medical visas shortcomings. That same day I had informed the police and his office was sealed. He didn't work for the ministry again.” Kurt Sansone

10:45 Comodini Cachia asks about Neville Gafa, the former OPM official. “At some time, he was a health ministry employee. Is this true?” Kurt Sansone

10:44 Fearne says he had engaged a number of technical persons to ensure that the contract conditions were adhered to. Kurt Sansone

10:43 Comodini Cachia: “When Konrad Mizzi ended his tenure as health minister and you took over, had you carried out due diligence on the hospitals concession?” Kurt Sansone

10:41 Fearne: “No, but I told my permsec to pass on a copy to the magisterial inquiry. There were two MOUs. One was between the parties which form Vitals and this came to my attention a few months ago. This referred to the time before the concession was granted. Then there was another one in the hands of the NAO.” Kurt Sansone

10:39 Comodini Cachia: “Did you ask for a copy?” Kurt Sansone

10:39 Fearne: “I have not seen this MOU to this day.” Kurt Sansone

10:38 Comodini Cachia asks about Vitals. “Did the MOU of 2014 include all the hospitals?” Kurt Sansone

10:38 Fearne: “That was a very strange situation as the motion was presented by Marlene Farrugia and the parliamentary group followed the instructions of the Whip who at the time was Godfrey Farrugia [Marlene’s partner].” Kurt Sansone

10:37 He is answering the panel that points out that he had voted in favour of Mizzi in the parliamentary confidence vote. Kurt Sansone

10:36 The 2016 vote of confidence in Konrad Mizzi was not a free vote, Fearne says. Kurt Sansone

10:35 Fearne says he felt that he could have done a better job [of holding power to account] from the inside. Kurt Sansone

10:34 Mallia says that the sense of business as usual, despite the strange money flows and deals, was creating a sense of impunity in the country. Kurt Sansone

10:34 Fearne: “I am not saying that there is a failure on government's part. I am waiting for the result of investigations, including this one, and then it should be determined who must resign.” Kurt Sansone

10:33 QUICK REMINDER: In November 2018, a Reuters investigation uncovered how Dubai-based 17 Black belonged to Yorgen Fenech and how the company had a bank account at Noor Bank in the UAE. 17 Black had, several months earlier, been revealed to be a target client of Konrad Mizzi’s and Keith Schembri’s Panama companies. Kurt Sansone

10:31 Fearne: “The remit to act is of the institutions. Government would see that they are doing a good job... it is not the role of Cabinet to investigate.” Kurt Sansone

10:30 Comodini Cachia: “After 17 Black was identified as Yorgen Fenech’, what steps did you take as a Cabinet?” Kurt Sansone

10:30 Fearne: “Without defending anyone, at that stage I was not seeing any evidence of the Panama account and its association with those projects. It might or might not be true but I wasn't aware of it.” Kurt Sansone

10:28 Comodini Cachia refers to a blog post by Daphne Caruana Galizia in which she raised doubts about the Gozo hospital concession and the Oxley Capital Group. Kurt Sansone

10:26 Fearne: “Konrad Mizzi was made or chose to step down, but after that he was re-elected. Political responsibility was shouldered.” Kurt Sansone

10:25 Therese Comodini Cachia follows up the board's questions. She points out that the point of the board is not to find legal liability but to identify the culture of impunity at the time of Daphne Caruana Galizia’s death. She asks Fearne how political responsibility was shouldered and whether developments simply added to the sense of impunity. Kurt Sansone

10:23 Fearne: “I am on record saying that the FIAU, once it has intel on a person, should have the power to act of its own accord.” Kurt Sansone

10:22 Said Pullicino says that good people are working on investigations but at a certain level there is a net which leads people to leave or be reassigned. Kurt Sansone

10:22 Fearne says he would never be briefed by the FIAU, the police or the Malta Security Services. Kurt Sansone

10:21 Fearne: “The relationship with Keith Schembri was frosty after I had said that I was under the impression that he [Schembri] had tried to harm my election [in the deputy leader contest] chances.” Kurt Sansone

10:20 Fearne says there were big discussions in Cabinet on the resignation of the prime minister and ministers. “Resignations did take place,” he says. Kurt Sansone

10:18 Fearne: “I don't recall if it was a formal topic in a Cabinet memo but it was definitely being spoken about. The murder was the most shocking event of my political career.” Kurt Sansone

10:17 Fearne is asked whether the murder of Daphne Caruana Galizia was discussed in Cabinet. Kurt Sansone

10:17 Fearne says that he was opposed to how the role of chief of staff developed over the past 20 years. There was too much concentration of power. “I was of the opinion that the role should be scrapped,” he adds. Kurt Sansone

10:15 The board notes how despite this Konrad Mizzi remained responsible for the most controversial projects. Kurt Sansone

10:15 Fearne says there was a discussion about the Panama Papers in Cabinet. He tells the inquiry that the prime minister had met him and informed him that Konrad Mizzi was not going to remain deputy leader or minister for health. “On Keith Schembri, the PM had said that he had trust in him and he would decide on his fate. The PM had met ministers individually after Panamagate. The discussion was mostly on Konrad Mizzi. Keith Schembri was not up for discussion,” he says. Kurt Sansone

10:13 On Konrad Mizzi's huge remit, Fearne says that the reason given by the government was that all the projects were concentrated under the responsibility of one person and that Konrad Mizzi will deliver. The idea was for there to be continuity. “What I can say is that my decisions are made after a discussion with ministers or Cabinet. I never had any direction imposed on me.” Kurt Sansone

10:10 Fearne: “I was not part of it and neither did I know it was there and neither did I have the perception of its existence. The first time I knew about it was when Evarist Bartolo testified about it before this inquiry. He [Bartolo] had never expressed any reservations about it before.” Kurt Sansone

10:09 Judge Michael Mallia asks him about the infamous ‘kitchen cabinet’. Kurt Sansone

10:09 Fearne says that this inquiry would have repercussions on the country for years to come and that he was willing to assist it. Kurt Sansone

10:09 Said Pullicino asks the deputy prime minister if he had any statement he wished to make. Kurt Sansone

10:07 Fearne says the financial aspect was settled with Projects Malta and then health and energy minister Konrad Mizzi. The Foundation for Medical Services was not involved in the Vitals deal, he adds. Kurt Sansone

10:06 The board asks if the financial deal was already set before the agreement was presented to parliament. Kurt Sansone

10:04 Fearne: “Cabinet is aware of things when they arrive in front of it. It doesn't generally involve a lot of detail. Cabinet decides the direction, not the details.” Kurt Sansone

10:01 Chief justice emeritus Joseph Said Pullicino asks about the lack of accountability to parliament on the project. “Everyone is coming here and saying I found this presentation, it was a done deal... is this the way to do business?” Kurt Sansone

10:00 Fearne says that Steward Health Care were a serious organisation. He had gone to visit them with Public Health Superintendent Charmaine Gauci. “I had also visited Harvard Medical School that were involved in the deal but later pulled out.” Kurt Sansone

09:59 Fearne says he had not known Ram Tumuluri before the deal, but afterwards had long arguments (battibekki kbar) with him. Fearne says that he met Tumuluri and Mark Pawley [from the Oxley Group] in Castille. “On paper, it looked like they were bringing €200 million, the service would be good and there would be medical tourism. I had a group of people giving me advice on the agreement. There would be problems but we would solve most of them.” Kurt Sansone

09:55 Fearne explains that after the signing of the concession agreement there was a discussion in the parliamentary group and in parliament. “There was no opposition to it because on paper it looked like a good deal. The opposition voted in favour of it,” he says. Kurt Sansone

09:54 Fearne says that the choice of the preferred bidder for the hospitals concession was not in his remit. “I only found out about the Memorandum of Understanding recently. Before the 2017 election there was a PQ... Konrad Mizzi was my minister when I was parliamentary secretary.” Kurt Sansone

09:51 Fearne explains that when he was a backbencher between February and March in 2014, he was asked to meet Keith Schembri. “He [Schembri] told me to prepare for changes in Cabinet. He asked me whether I would be interested in the role like [former PN health minister] Louis Deguara, whereby I would be a parliamentary secretary but have projects in the area not done by me. I accepted.” Kurt Sansone

09:49 Fearne says that after the adjudication, Vitals were selected as the preferred bidder. “The concession was not signed immediately, in that period, I was asked to give a number of KPIs for a part of the concession,” he says. Kurt Sansone

09:48 He is asked about the Vitals hospitals concession. “I knew there was going to be a project for the hospitals before Vitals were involved,” he says, adding that he was not involved at that stage as a parliamentary secretary. The only thing he had done was attend a presentation by Malta Enterprise at Castille for the Gozo hospital to become a teaching hospital for Barts. Kurt Sansone

09:46 Fearne explains that the public private partnership with Barts Medical School started when Godfrey Farrugia was health minister. “That project was led by Malta Enterprise. I was not involved at all in the PPP,” he adds. Kurt Sansone

09:45 Fearne: “When I was a youth, I was involved in KSU, MMSA and Labour youth movement. Eventually when I graduated as a doctor I did not remain active politically. After the 2008 election I decided to contest the next election. I was elected in 2013. I was a backbencher, after that parliamentary secretary for health and later, health minister.” Kurt Sansone

09:44 Judge Michael Mallia asks Fearne about his political life before 2013. Kurt Sansone

09:44 Deputy Prime Minister Chris Fearne takes the stand. Kurt Sansone

09:43 Comodini Cachia says that the PM only has power over the resources used. “If he starts depriving the inquiry of this...” she begins, but is told by the board not to talk of hypothetical situations. Kurt Sansone

09:39 Judge Michael Mallia says the inquiry board has received a reply from the Prime Minister. Lawyer Therese Comodini Cachia says that if the PM has nothing to add, “our position remains the same. We don't need his permission to extend the inquiry”. Kurt Sansone

09:38 Good morning. Kurt Sansone

Matthew Agius is Senior Reporter on Law and Court Affairs at MaltaToday. He is also a Leg...