Live-blog of PAC hearing on Enemalta • oil trader presents 'list of gifts'

Welcome to MaltaToday's live blog of the PAC hearing into the Auditor General's audit of Enemalta's fuel procurement policy

EXPLAINER | Auditor General's report on Enemalta fuel procurement

This live-blog has ended. Thank you for following us.

20:37 The session has been adjourned to 13 January, as the witness is not feeling well. He is exhausted, according to his lawyer.

20:28 Farrugia asks for a five-minute suspension to consult his lawyers.

20:27 Reference is made to an email dated 29 April 2005 addressed to Olivier de Richemont during which George Farrugia writes: "I know I am too nice./ We have to send confirmation about this./ Re payments./ Did not receive anything yet. Re the big one. I need it desperately as cannot do what I have to do./ Please do it or I will be in deep s.".

Farrugia says he cannot remember what this refers to.

20:20 Farrugia is asked about an email in which he told Tancred Tabone that would be meeting "Aust". Farrugia appears not to remember what the email refers to and says that maybe, he had spoken to Austin Gatt about oil storage.

"Why did you feel the need to tell the chairman that you would meet the minister?" Bonnici asks.

Farrugia asks to answer the question at a later stage because he cannot remember what it's about.

20:08 Summarising the case, Fenech Adami says that everyone at PowerPlan Ltd, everyone knew that funds were coming in through bribery.

The company's lawyer was David Farrugia Sacco but company also called in Manuel Mallia [then lawyer today minister] to facilitate the talks for Farrugia to pay the money he had siphoned off from PowerPlan Ltd.

"Would I be correct in saying that Mallia had known about the scandal since 2010? Would I be correct in saying that Mallia ha told you that if an agreement would not be reached, he would report you?" Fenech Adami asks.

At time hesitant, Farrugia confirms.

Bonnici intervenes to clarify that Mallia had worked as a lawyer and there was the client confidentiality clause.

Fenech Adami says he knew exactly what this meant: "We are here to clarify the timing of when the story was leaked to the media."

Fenech Adami adds that Mallia's client was PowerPlan Ltd and not Farrugia.

20:02 Farrugia says that Tony de Bono knew what he had been up to and had asked Farrugia to give him a cut as well. He then adds that he met "a friend" Ronnie Agius (a businessman involved in a cigarette smuggling case) who told him that de Bono had said "I want to ruin Farrugia".

Farrugia adds that de Bono had also threatened to ruin his lawyer, Siegfreid Borg Cole, for having accepted him as his client.

19:55  Farrugia says between 2006 and 2010, "the only bribery carried out was with Ray Ferris". Since Farrugia had shifted to Aikon Ltd, funds which should have been channeled through PowerPlan Ld (owned by the Farrugia brothers) where now passing through Aikon Ltd.

He confirms that, after Tony de Bono was brought in by his brothers, an investigative audit was called by his brothers.

According to Farrugia, "figures were invented" in this report. He says it was the report which claimed that PowerPlan Ltd had lost $7.8 million.

According to the oil trader, "even draft contracts" had been included.

19:48 Opposition's turn, led by Beppe Fenech Adami, to make questions.

19:45 Between 1999 and 2004, briberies were paid through PowerPlan Ltd. From 2004 onwards, Aikon Ltd was set up and briberies shifted through this company.

19:30 With reference to the emails published yesterday by MaltaToday, Farrugia says he could not remember what the email referred to... maybe he had been referring to Ray Stafrace.

Stafrace was his and Frank Sammut's friend, and was an accountant. Asked whether he was his own accountant, Farrugia says Stafrace did some work for his Aikon Ltd and at times for Frank Sammut.

Asked about the creation of Aikon Ltd, Farrugia says when he started paying illegal commissions, he did so through PowerPlan.

"The company's auditor said payments without documentation could not be done. I then set up a company, with an account in Switzerland under the name of Aikon but had nothing to do with Aikon Ltd," he says.

Farrugia adds he never told his brothers about Aikon.

This account, Aikon, was used by Farrugia alone. "Some of the fees [bribery] from Enemalta supplies contracts would go through this account and some of them paid in Malta's account."

Put simply, Farrugia used to pay bribery through PowerPlan Ltd, but when the auditor pointed out, Farrugia started passing the bribes through Aikon Ltd.

19:25 Replying to questions, Farrugia says that when he was arrested he didn't consult his lawyer and when he received a phone call by Inspector Gafa' to go in for questioning, he was in Valletta.

Farrugia says he was arrested for 48 hours and during those two days former Prime Minister Lawrence Gonzi had offered the presidential period. He says that he revealed the names of the persons involved and whom he had bribed only after his presidential pardon was granted.

18:59 The sitting has been suspended for five minutes allowing the witness to rest.

18:37 Farrugia says he had spoken to Austin Gatt - whom he met every two or three months - when he tried to revive the Air Total agreements. Farrugia says Gatt had like the idea that there would a period of cooperation between Air Total and Enemalta's air division.

"At one point Air Total were also ready to send new trucks, to replace existing trucks used for two-plane operation. But nothing happened," he says.

18:28 Moments of hesitation for Farrugia when asked about emails sent to Naeem Ahmed. He insists that the discussions were only about a possible long-term supply agreement on bunkering activities by Trafigura. "But I don't think I ever spoke to Austin Gatt about it," he says.

In one of the emails to Ahmed, Farrugia wrote that "the minister and the chairman were of the same thinking". Farrugia today tells the PAC that there "could have been an element of bluff".

"So what you wrote in the email was bluff?" Bonnici asks.

"I spoke to the chairman but I don't think Austin Gatt was involved," Farrugia replies.

18:20 Back in 4 June 2003, Farrugia had sent an email on "details of [his] meeting with A.G. and some issues you should consider to do at EnMa".

Farrugia confirms that the meeting had taken place in Valletta with Austin Gatt together with his brother, Ray Farrugia, confirming that "A.G" was Austin Gatt.

"The meetings had nothing to do with petroleum. We met to discuss the possibility of Air Total entering the marketing as they were interested," Farrugia says, also confirming that Gatt had told them Tancred Tabone would become the new chairman, days before the official announcement.

Farrugia says he never told Gatt he already knew Tabone was to become chairman.

18:10 Owen Bonnici asks Farrugia whether he ever attended "religious meetings" in Mosta, together with Frank Sammut and Alfred Mallia.

After a brief period of silence, Farrugia replies "not that I know of".

He adds that Mallia had once spoke to him about a religious meeting - a healing service - and decided to take his father because he had not been feeling well.

Farrugia forms part of the Neocathechumenal Movement, a movement he joined after his mother's death.

"I don't recall any of them ever attending these meetings," Farrugia says.

18:02 With regard to the €2,000 donated to Austin Gatt's PN event, Farrugia says it was his brother Ray Farrugia who had asked me to go with the donation.

18:00 "It's true I might have given them excessive gifts, and may look suspicious because of their amounts. However, no one ever asked me anything and they were not acts of bribery" Farrugia says. "It was an act of thanks".

17:45 Between 1998 and 2003, John's Group was the authorized agent for Daewoo. A car was donated to the Labour Party, where according to Labour organ Kulhadd this had been given as a result of a barter agreement due to pending advertising payments which John's Group had.

The car was given to Labour in 2002 when JF Motors (owned by John's Group) was representing Daewoo. Farrugia says he doesn't know why the car was given and whether any advertisement was involved.

He comments that at the time, there was "bad advertisement".

Beppe Fenech Adami says it was pertinent to recall the bad advertisement had been generated by Labour, the Daewoo agency ended up in JF hands and a car was donated to Labour.

17:37 Farrugia says he used to send in the gifts “to thank them”. At one point, Owen Bonnici asks whether Farrugia used to purchase all the gifts to “get rid” of cash. But Farrugia, insisting he could not understand the question, said he would have cash only when he traveled abroad on work. Prompted by Bonnici, Farrugia said he was never involved in any illegalities with regard to the sale of diesel. He remembers one time when John’s Garage purchased diesel from Sammut, which diesel was transported in a bowser owned by MOBC.

17:30 The list available is for 2010, 2011, 2012 and includes a wrist watch costing €1,333, cufflinks costing €997 and a painting worth €999 given to Enemalta's CFO Antoine Galea.

George Farrugia remarks that Galea had "wanted to return the watch but I didn't accept".

William Spiteri Bailey received a pen worth €350 and the following year he was gifted cufflinks worth €1,044. Other Enemalta officials received hampers worth between €25 and €65.

Karl Camilleri, former Enemalta CEO received a print worth €1,135. Gifts to Pippo Pandolfino varied between €500 and €600 while Alex Tranter received a €700 gift from Azzopardi Jewellers.

List of gifts given in previous years are to be obtained from PowerPlan Ltd, Farrugia says.

Ray Ferris received silver centerpieces costing Lm 3,300.

Other individuals, such as Hugh Attard Montalto who worked at MOBC, received hampers. Asked by parliamentary secretary for justice Owen Bonnici whether Attard Montalto was somehow involved with IBOL, Farrugia said he didn't know.

But gifts to Tancred Tabone and Frank Sammut took also a 'sponsorship nature'. One time, he spent over €2,000 to organize a party for kids, including presents. "I'm not sure whether it was for their kids or kids at an orphanage," Farrugia says.

On another occasion, Sammut asked him to organize a party for staff at MOBC.

Farrugia also says that during 2008, he had donated €2,000 to a PN event organised by Austin Gatt.

John's Garage, he adds, had one Christmas spent around €40,000 in gifts but could not specify to whom the gifts were given and why.

17:10 George Farrugia called in, assisted by his lawyers Franco Debono and Siegfreid Borg Cole. Farrugia today presented the PAC with the list of gifts given during the Christmas period.

16:57 Good afternoon and welcome to MaltaToday's live-blog of the Public Accounts Committee. The members will continue grilling oil trader George Farrugia, following last week's session.

The session is scheduled to start at 5pm.