Vitals corruption case hangs on a thread: Expert’s refusal to testify weakens prosecution’s hand

The continued refusal of a forensic accountant to testify about his report in the Vitals inquiry risks weakening the prosecution’s case against Joseph Muscat and others.

Jeremy Harbinson’s refusal to come to Malta and take the witness stand could compromise the prosecution’s case, especially if the court expunges his report from the acts.

If this happens, the prosecution will lose its single most important source of evidence on which it has built its case against all individuals and companies charged with wrongdoing.

Such an outcome will not only have legal ramifications but also political ones.

Harbinson was appointed as a court expert by Magistrate Gabriella Vella, who presided over the Vitals inquiry. Harbinson oversaw a team of 30 experts who produced a voluminous report based on the analysis of company documents, bank transactions and electronic exchanges. The 1,200-page report was the sole basis on which the inquiring magistrate reached her conclusions.

READ ALSO: Vitals Inquiry published by MaltaToday

The Vitals inquiry recommended criminal action be taken against former prime minister Joseph Muscat, former minister Konrad Mizzi and former Office of the Prime Minister chief of staff Keith Schembri on charges of corruption and money laundering. The inquiry also recommended criminal action on lesser charges against former ministers Edward Scicluna and Chris Fearne, and three ex-permanent secretaries. Several company bosses, Maltese and foreign, and their accountants and lawyers, were also charged with various crimes, including money laundering. All have pleaded not guilty.

But now, Harbinson, who has since given up his warrant to practice as an accountant, is refusing to come and testify on the findings.

The issue is currently playing out in front of Judge Edwina Grima, who is presiding over a case in which the accused are challenging the freezing orders imposed on them by the magistrate’s court. Muscat was hit by a freezing order to the tune of €30 million. Some of the other accused were also hit by freezing orders running into millions.

In Muscat’s case, his lawyers are asking that the frozen amount should be based on the €60,000 mentioned in the inquiry. Similar arguments are being made by some of the other defendants.

Fearful to return to Malta

But during proceedings, the defence has so far been denied the opportunity to question Harbinson.

In an affidavit submitted to the judge by email last month, Harbinson said he will “never return to Malta” out of safety concerns. He did not specify what these safety concerns are.

But crucially, Harbinson also insisted the report he was entrusted to draw up made no mention of criminal charges or freezing orders. He said it was not to be shared with third parties without due permission and was not intended to be used for prosecution purposes.

He also noted that from his long experience of criminal investigations in the United Kingdom, he expected that, if criminal proceedings were to result from the inquiry, the professional experts would be consulted by police and prosecutors about any such proceedings. This work, he added, would be the subject of a separate commercial contract.

According to Justice Minister Jonathan Attard, Harbinson was paid around €10 million for his work linked to the Vitals inquiry.

But irrespective of Harbinson’s arguments, court experts are required by law to testify in court about their reports. His refusal to do so deprives the defendants the opportunity to question him as is their right.

MaltaToday understands that Harbinson’s behaviour has angered the inquiring magistrate, who appointed him for his expertise.

No other option

In these circumstances, defence lawyers for some of the accused have asked Judge Edwina Grima not to take cognisance of Harbinson’s report if he does not testify. The next step would be to ask for the report to be expunged from the acts of the case.

If the situation persists, the judge may have no other option.

“The judge will have no option but to expunge Harbinson’s report from the acts of the case unless the defence is given the opportunity to question him, and her decision will impact the compilation of evidence proceedings in the magisterial court as well,” a lawyer close to one of the defendants, who requested anonymity to be able to discuss the issue freely, told MaltaToday.

The lawyer added the judge may take the extreme measure of ordering an international arrest warrant be issued for Harbinson. This would prolong proceedings.

“In his affidavit, Harbinson said that his report was only meant to be a preliminary report and that it made no mention of criminal charges and freezing orders; so even if he is brought to testify under arrest, he may still refuse to play ball,” the lawyer said.

Refusal to testify is a criminal offence, and if found guilty Harbinson could be liable to a fine and imprisonment for a maximum of three months. If it comes to this, the prosecution’s case would have been seriously weakened.

Uncharted territory

A second lawyer unconnected to the Vitals case and with 30 years’ experience said Harbinson’s refusal to testify is unprecedented.

“We are in uncharted territory. I have never come across an instance where a court expert has refused to testify but the court has wide powers to ensure he does take the witness stand,” the lawyer told MaltaToday.

He said it may be too early to argue that the criminal case has been fatally undermined but insisted any decision to expunge the report or parts of it will undoubtedly weaken the prosecution’s hand.

“If the case reaches the point where Harbinson’s report is to be expunged, the prosecution could argue for his conclusions and observations only to be removed and not the data on which they were based but nonetheless this will still weaken the prosecution’s case,” the lawyer said.

The Vitals case rocked the political establishment in light of the high-profile people who ended up in the dock. It is the first time that a former prime minister has been charged criminally.

A flagship project

The Vitals hospitals concession was a flagship project of the first Muscat administration. It saw three public hospitals – St Luke’s, Gozo General and Karin Grech – being transferred on concession to the obscure company Vitals Global Healthcare in 2015 when Konrad Mizzi was health minister.

The National Audit Office had concluded there was “collusion” between government representatives and the VGH shareholders when the concession was awarded. The company had produced a sanction letter from the Bank of India as proof of finance, which was issued even before the government had published the request for proposals.

When VGH failed to deliver on its contractual obligations, the concession was transferred to American company Steward Health Care in 2018. The transition to Steward happened when Chris Fearne was health minister but contractual arrangements related to the concession continued to be handled by Mizzi.

The NAO had described this arrangement as an “unorthodox dynamic” since it deprived Fearne of the ability to negotiate with Steward. At one point, Steward’s CEO, Armin Ernst, had asked Keith Schembri whether he should share information with Fearne.

READ ALSO: From deal to big steal - The Vitals timeline

Throughout the period, Steward failed to deliver on major contractual milestones as it tried to negotiate a more generous package with government. Significantly, in August 2019, Mizzi had agreed with Steward behind Cabinet’s back that if the contract is cancelled by the courts, government would be liable to pay the company €100 million. The backdrop to this side agreement was an ongoing court battle initiated by then Opposition leader Adrian Delia to have the hospitals contract rescinded.

During the same period Ernst had ordered the creation of a fund with Swiss company Accutor to support “political and government activities and interactions”.

The magisterial inquiry that was initiated by Repubblika last year revealed that Muscat had received payments from Accutor for consultancy work he did after stepping down from prime minister. Muscat has claimed the payments are accounted for and were unconnected to any Maltese project.

Eventually, the Civil Court annulled the hospitals concession, pointing out that the deal was fraudulent and that top people in government were complicit. The court ordered that the hospitals be returned to government.

The magisterial inquiry was concluded last year and recommended that criminal charges should be brought against several people and companies involved in the Vitals deal.

The police and the Attorney General took the inquiry’s findings lock, stock and barrel without carrying out further investigations and interrogations, and charged all people indicated by the magistrate.

The compilation of evidence in all cases is ongoing.