NAO denounces James Caterers threat to hold it liable for damages from SVDP audit

Catering giant James Caterers has threatened to hold the National Audit Office and its officers personally responsible for any reputational or material damage they are expecting on an audit of two tenders awarded to the company.

In a letter to the Public Accounts Committee, the NAO said James Caterers wrote on 17 February 2021 explaining they are close to signing off on a large international export contract of high value, and that any adverse public comments made about the company or the consortium will directly impact the negotiations.

“We trust therefore, as stated by your good selves in our interview, that JCL and the consortium are not under review and therefore should not be the subject of any censure or comment,” the letter reads. “Please note however that in the event that negative or adverse comments are raised with respect to JCL or the consortium prejudicing thereby the final sensitive negotiations currently underway, JCL will have no option but to hold the NAO and its officers personally responsible for the reputational and material damage which JCL will suffer.”

The NAO is investigating a negotiated contract awarded by St Vincent De Paul Residence to James Caterers (JCL) and Malta Healthcare (MHC) consortium, part of the DB Group, in November 2017. The investigation was requested by the PAC on 28 August 2018.

The NAO met the James-MHC consortium in January 2021 in a clarification meeting to the matter under review: a catering contract that was allowed to develop into a full-blow hospital wing for the State home for the elderly.

But the NAO told the PAC it was highly displeased by the letter, calling it “extremely offensive and disturbing” in their reply to the company. 

“Your not so veiled reference to possible legal action being taken against them for the work being done by them for Parliament is disturbing and unwarranted,” the NAO replied. “It may well be that the letter amounts to a contempt of Parliament and a breach of its privileges and they feely duty bound to report the matter to the Public Accounts Committee unless the letter is unreservedly and promptly withdrawn by you.”

James Caterers sent in a second reply in an attempt to defuse the situation. “Any linkage of their business concern with any possible bad practices on the part of third parties would not only be grossly unfair and unfounded but would inevitably tarnish their reputation to a great extent and a prejudice to current commercial endeavours of a substantial nature.”

Auditor-General Charles Deguara passed on the letter to the PAC, asking its MPs for their support on the issue.

“While the NAO will not be intimidated or adversely influenced in its work for Parliament, the matter is being brought to the attention of the Public Accounts Committee, whose support is being sought. This Office is certain that the Public Accounts Committee does not condone attempts at intimidation such as this.”