Casino buyers engaged OPM director Rita Schembri for business advice

One of the government's highest functionaries who heads the Office of the Prime Minister's internal audit and investigations department (IAID), has been providing consultancy services to a private gaming company which was until recently interested in acquiring a share in the Casinò di Venezia, in Birgu.

Rita Schembri, a member on the supervisory committee of the EU's anti-fraud office OLAF, is a permanent secretary who heads the IAID, the prime minister's investigative unit which also assisted OLAF in its investigation on former EU commissioner John Dalli, who resigned 16 October.

Correspondence seen by this newspaper shows that Schembri, a "trusted" contact of international casino and online gambling company Far East Entertainment's chairman Colin Perkins, was drafted by Perkins to consult with Maltese lawyers and other consultants on a bid by FEE to acquire a 40% stake in the Casinò di Venezia.

Schembri was in touch with Perkins in  February 2012 and actively involved with local lawyers and business advisors in an offer to the Venetian owners of the casino for the 40% share.

In the correspondence, Schembri is described as a "trusted colleague" of Perkins. Throughout February and March, she was part of frequent correspondence on the bid for the casino stake, having also scheduled a meeting at her office at the IAID in Valletta Buildings on South Street, in Valletta during office hours.

Cabinet secretary Godwin Grima has been unable to confirm whether he agreed to allow Schembri to carry out private work and use her IAID office for a private meeting on the business plan for the Casinò di Venezia bid.

It is not understood whether Schembri's services to FEE and her work on the bid for the Casinò di Venezia forms part of her other private occupation, that of non-executive director of South African investment giant Brait SE, which is based in Luxembourg.

There is no confirmation of Brait's interest in Far East Entertainment, or whether Schembri's role as Brait director - who are paid anything between $70,000 to $200,000 in directors' fees - included assisting FEE in its bid for the casino.

On his part, Godwin Grima said he is only aware that Rita Schembri is a non-executive director of Brait, which raises finance for private business.

Schembri was appointed director of Brait on 30 March 2012.

Grima said that Schembri informed him in late January 2012 that she had been invited to become non-executive director at Brait and its audit and risk committee, and that her input would entail only four meetings a year, either in Malta or abroad.

As required by the public service management code, Schembri formally asked for permission to hold this private interest on 13 March 2012. Grima's positive reply came on 12 April.

Grima also said Schembri assured him that this work could in no possible way impinge on her duties. "She felt that being involved in such a function in the private sector would serve her in good stead in her audit and risk assessment duties in the public sector... she gave a commitment that she would avail herself of vacation leave in order to attend board meetings, whether these are held in Malta or abroad."

The public service's management code allows public officers to engage in any form of business or employment outside their official duties, as long as there is no conflict of interest with their official activities.

Specifically, they must seek authorization of their private work from their superiors even when they are promoted, as well as forward all particulars of their part-time work to the Commissioner of Inland Revenue for tax purposes.

They must also declare directorships, agency services or shareholdings; as well as any interest in any activity or business they are engaged in.

Rita Schembri, a certified public auditor and accountant, was appointed permanent secretary in September 2012, while serving as director-general of the IAID. A member of the supervisory committee of OLAF, Schembri was aware of the OLAF investigation into former commissioner John Dalli as early as 4-5 July.

Both Prime Minister Lawrence Gonzi and Cabinet secretary Godwin Grima have defended her role in the Dalli investigation since the former commissioner raised doubts on her alleged conflict as OLAF supervisory committee member, and head of the Afcos unit, the anti-fraud coordinating services unit inside the IAID which assisted OLAF in its investigation.

Gonzi publicly defended Schembri during a debate on PBS with Opposition leader Joseph Muscat, hailing the IAID director for her "honesty"; while Grima said that at no stage was Schembri in communication with the Prime Minister on the Dalli investigation.

The OLAF supervisory committee also announced that Schembri had withdrawn from the committee's examination of the John Dalli case, which the committee must now evaluate to see whether it was handled in respect of his fundamental rights, on 17 October.