Dalli reveals that Maltese civil servant ‘personally involved’ in OLAF investigation

John Dalli revealed that Rita Schembri, Permanent Secretary in charge of Governance and Internal Auditing and who also heads Malta's Anti-Fraud Co-ordinating Service (AFCOS) which regularly liaises with OLAF, was "personally involved" in OLAF's Dalli investigation to the extent that she was present during OLAF's interrogations held in Malta.

Dalli was speaking on Dissett where he was being quizzed by PBS journalist Reno Bugeja about how the investigation unfolded, and on what grounds he is contesting its conclusions.

During the interview, Dalli insisted that the Maltese government "was aware of the investigation and was being kept informed step-by-step" by Rita Schembri through to her dual role as OLAF supervisory committee member and head of AFCOS in Malta, the anti-fraud coordinating service that regularly liaises with OLAF.

"Rita Schembri was part of the ongoing investigation. She knew of the investigation in detail. Do you really believe that she did not inform anyone of what was happening?"

Noting how EU Commission President Jose Barroso visited Malta on 5 October 2011, "Do you think that when [Prime Minister Lawrence Gonzi] met with Barroso on 5 October, they did not discuss the investigation?" Dalli asked.

Schembri was appointed Permanent Secretary in charge of Governance and Internal Auditing, after having held previous positions as Director General of Internal Controls on Public Finance within the Finance Ministry, and Director General of Internal Auditing and Investigations within the Office of the Prime Minister. She is also the Head of Malta's Auditing Authority on EU funds.

Her appointment as Permanent Secretary was effective as from September 5 of this year. In 2012 she was sworn in as one of five members of a surveillance committee of the European Anti-Fraud Office (OLAF) that investigated frauds against EU budgets, corruption and malpractice within EU institutions.

Dalli also slammed the manner in which OLAF handled the investigation, saying that according to his own legal team's advice, OLAF was obliged to inform him of the investigation's conclusions and the reasoning behind those conclusions when the report was being finalised.

"To this day, I still do not know what the reasoning behind their conclusions is," insisting that he was not given the opportunity to defend himself.

The former EU Commissioner also revealed that, "before concluding and finalising the report, OLAF was required to obtain the approval of the OLAF's supervisory board. They could not distribute the report to anybody before they obtained this approval."

"I am informed that the supervisory board met for the first time regarding this case last Monday (22 October), a week after I met with Barroso, and they did not agree with many aspects of this report," Dalli stated.

The veteran politician added that he is informed that "OLAF tried to force the report to be fast-tracked by means of a quick superficial review, and that the supervisory board refused, insisting on the need of a detailed review in writing of what they had seen."

"As far as I am informed, [the supervisory committee] has not yet approved the report," Dalli said, adding that his sources are individuals in the EU Parliament who are "serious" and "in the know".

He added that "he has his doubts" whether OLAF had the approval of the supervisory board before it sent the report to Malta's Attorney General for investigation.

He questioned the soundness of Schembri's roles in both AFCOS and the OLAF supervisory board.

"In this case she did well to admit her conflict of interest," Dalli said, noting her declaration earlier this week to "withdraw" from the work of the supervisory committee of OLAF as it prepares to examine the way OLAF's investigation was handled.

However, Dalli argues that "it is ridiculous that a person is involved in direct contact with OLAF over investigations is also concurrently in a position where he or she is expected to supervise and scrutinise OLAF itself."

Referring to the resignation of OLAF supervisory committee chairman Christiaan Timmermans, Dalli said that while Timmermans's resignation was motivated by "personal reasons", it was nevertheless accelerated "because he came into confront with OLAF as he objected to how OLAF was acting with regards to this case and also other cases."

Dalli reiterated his suspicion that the investigation was prompted by a hidden agenda, and insisted that this is not the first time he finds himself at the heart of such an investigation because "I always took decisions that hurt certain people."

"In 2004 I took a decision that hurt a large company that was expecting a €60 million contract." (he was referring to the Mater Dei project)

Dalli said the company reacted by fabricating a report," referring to a report which led to his resignation as minister despite being proven as fabricated. "Is this not a hidden hand?" he asked

He insisted that other cases had similarly "gone up in smoke" and were proved to be "unfounded allegations" and "political attacks intended to undermine my credibility."

While he noted that in the present scenario, a European institution is also involved, Dalli reiterated that "I am persuaded that Malta is involved as well."

"If you examine and compare the reactions of Maltese politicians and media and foreign politicians and media, there is a conspicuous difference.

"Abroad everyone is questioning the official version of events, asking questions, expressing doubts, and calling for transparency. In Malta however, everyone accepted the verdict from the very first moment, and the criticism began.  It is all concocted."