Updated | David Casa’s former aide says staff salaries were inflated to claim bigger budget

Whistleblower who wrote to OLAF requesting he furnish information on financial irregularities says tax-declared salaries inflated so that portion of EP budget is retained by MEP’s office • In 2009 he was paid €101,000, more than any other MEP

David Casa has insisted that all employee salaries were received in full
David Casa has insisted that all employee salaries were received in full

A former longstanding aide to Nationalist MEP David Casa was paid in excess of €100,000 annually, but never pocketed the full amount of a deliberately inflated salary. The reason: the money was retained by the paying agent working for Casa’s office to make full ‘use’ of the European Parliament’s salary budget allowance… even if the money did not go strictly for salaries.

Taxation records seen by MaltaToday show that Casa paid his former aide a total of €101,513 in 2009, a record salary that would have meant the aide was paid more than even MEPs themselves that same year – when salaries were tagged at €92,000 under new statute rules.

But while the paying agent responsible for disbursing the EP’s salary budget for Casa submitted a taxable income for €101,513 in 2009, the aide claims he was never actually paid that full amount.

Instead, the aide declared that his actual salary in 2009 was overstated by some €35,000 to €40,000, suggesting that the money was retained by the paying agent handling Casa’s staff salaries.

In 2010, the aide was again paid a higher salary than the one actually deposited in his bank account – just over €58,000 – but this was actually overstated by €10,000, he claims. At this point the aide had resettled in Malta and was paid a lower salary.

The aide’s declarations come in the wake of a letter he has sent to the EU’s anti-fraud agency OLAF requesting that he be invited to submit information on the way Casa’s office has managed the finances it received from the European Parliament.

Part of this information is expected to centre on the way staff salaries could have been inflated so as to claim a larger portion of the annual €270,000 staff budget that the EP paid to the MEPs’ paying agents.

The transparency declarations presented by Casa to the Nationalist Party show that his office always returned a small sum from the total EP budget that is made available to MEPs to employ staff.

He says every year, an amount equivalent to around 5% to 7% of the EP’s salaries budget would be paid back to the EP as the portion not spent on salaries. But the aide says that other employees’ salaries, like his own, could have been inflated to claim a larger portion of the budget. “In 2009, my salary was grossly inflated but I was never paid that declared amount in my Malta bank account by the paying agent. So that large salary did not come my way.”

A statement issued by Pro Corporate Services
A statement issued by Pro Corporate Services

The MEPs’ transparency declarations, an initiative pioneered by the Nationalists in 2009, never listed the full salaries of their employees.

General expenses sham

But the aide goes one step further, striking at the heart of the European Parliament’s own problem with transparency, saying he personally made up the figures declared in Casa’s transparency declaration citing the way he spent his €50,000 general expenses allowance.

“In order to ensure we claim the full EP budget for general expenses, the figures were made up for costs for office management, office equipment, communications, conferences and events, and stationery, so that we could claim the full budget. There are no receipts to back up the full amount,” the aide said.

The allegation confirms the shortcoming for this part of all MEPs’ expenses budgets. An EU court last month rejected calls for greater transparency and upheld a decision to not require MEPs to reveal how they spend public money intended for their offices, namely the EP’s own decision that MEPs do not have to provide invoices and receipts for their constituency office costs, or provide the public with details of travel expenses.

The European Court of Justice indeed concluded that an obligation to publish spending records would undermine MEPs’ privacy, concluding that campaigners had failed to prove publishing information was “appropriate and proportional”.

But Casa’s aide has insisted with MaltaToday that this lack of transparency allowed him to make up fictional amounts so that the expenses budget could be justified in full. “Most MEPs claim the maximum office allowance… There is no requirement to provide invoices, receipts or any details on how the funds are spent.”

When MaltaToday asked David Casa to comment on his “fictitious expenses” which were also audited by a CPA for his transparency declaration, the MEP denied the allegation.

“I categorically deny any fictitious rounding up of expenses with regard to the General Expenditure Allowance (GEA). The PN MEP delegation voluntarily, in the interest of transparency, audits our use of public funds, not just the GEA, despite being under no obligation to do so.”

Casa was also asked about staff members who were not paid their tax-declared incomes in full, so as to retain a portion of the EP budget for salaries for other purposes.

Casa insisted that all employee salaries were received in full “in the manner agreed with them, and in conformity with any applicable rules. Salaries are paid either by bank transfer or by cheque. I have no right, interest or ability to monitor what staff deposit in bank accounts.”

His former aide has now written to OLAF saying he wants to report financial irregularities “that will shed light on the way Casa operated over the years” and that as a long-time senior employee of the parliamentarian, he “looked forward to cooperating” by shedding light on the MEP’s finances and the way money from the EU’s budget for members was being utilised.

Casa accuses Labour MEPs

The former aide has already supplied a sworn affidavit detailing the euro-parliamentarian’s cocaine habit between the years 2009 and 2017 during which the two had a close relationship. In his declaration, the aide blows the whistle on weekends spent in hotels where Casa would consume cocaine, spending some €700 on these sessions. The aide described Casa being “hyper” and being “so taken up by this drug habit that he would miss important political events and other private functions. There were also instances of drug taking in his office at the PN HQ but this did not continue after September 2017. His drug habits were well known to his entourage and most of his close aides and friends.”

Casa, who has denied the allegation, yesterday accused Labour MEPs of not accounting for one cent of their EP budgets, and made special mention of Marlene Mizzi, who was leasing her offices from her own daughter “payment-free, necessarily implying these funds are pocketed,” he said.

“I have physical premises rented from third parties that are paid for monthly, the cost of which alone already accounts for a significant portion of that budget,” Casa said, referring to a 2017 investigation into 249 “ghost offices” where MEPs had no office.

Under EU spending rules, public funds are intended for European work, not national parties. Nationalist MEPs denied any wrongdoing after the Labour Party accused them of incorrectly spending part of their monthly €4,000 general allowances on renting office space at the PN’s headquarters, rather than on local constituency offices. The MEPs replied that the rental agreement was with Media.Link, a company owned by the PN.

“I, together with my PN MEP colleagues, have been at the forefront in calling for more transparency and accountability with regard to the GEA, as currently there is absolutely no obligation to account for any portion of this budget. We have consistently voted to achieve this objective,” Casa told MaltaToday yesterday.

“Just this week, the PN delegation in the European Parliament voted in favour of accounting fully for that budget and for the introduction of the obligation to maintain all records of payments. It is even more surreal that it was Labour MEPs Miriam Dalli and Alfred Sant that just this week did not support an amendment voted on in plenary that would require MEPs to keep records of receipts related to the GEA. We welcome the result of the vote, that was successful, despite the lack of support from our PL colleagues, and look forward to the introduction of this oversight.”

Members of the European parliament are paid €8,611.31 a month in gross salary, plus pension. On leaving the parliament they receive a “golden parachute”, a transition allowance worth up to €206,664, depending on length of service.

They also get a €4,416 monthly “general expenditure allowance” awarded to fund their constituency offices, which costs the EP some €40 million alone. MEPs are also refunded travel expenses and get a €313 daily allowance for hotel and living costs when working in Brussels and Strasbourg on select days.

Casa has also placed his uncle, Paul Degabriele, and his brother-in-law Etienne Zammit Guglielmi, on his staff payroll.

The EP only bans the recruitment of spouses and non-marital partners, parents, children, brothers or sisters, but not the spouses of one’s siblings, or a parent’s sibling.

Paying agent denies allegations

In a statement sent by the MEP, Pro Corporate Services, which is run by former Sliema mayor Nikki Dimech, denied irregularities in the way employees were paid.

"Pro Corporate Services and previously Dimech, Vella and Co Ltd have been the paying agents for MEP David Casa from July 2009 to date," the statement read. "The employees have always received the funds they were due, in dull, and according to their employment contract. To the best of our knowledge, allegations of inflation fo wages and secret funds are complete fabrication." 

The company added that all funds it had received as agent to Casa, "from the European Union, as per employees' contracts" were reconciled each year by the European Parliament's Directorate-General for Finance. 

It said that funds can never be retained by the paying agent and that the allegations were therefore impossible.

Allegations a fabrication - Casa

In a separate statement, Casa said that the “only shred of truth in this tirade of fabricated nonsense is that the Brussels salary of one employee was transitioned to a Maltese salary when the person in question relocated from Brussels to Malta a decade ago”.

The most “inane” of the accusations, he said, was that he was personally involved shortening staff’s name before uploading them to European Parliament’s website in order to conceal their identity.

“The suggestion that I would intentionally disassociate myself from the Fenech Adami and Caruana Galizia names is as preposterous as it is impossible,” Casa said. 

He said that in the last months, he had been threatened with court and been subjected to a “vicious hate campaign” which has now led to the “fabrication of now proven nonsense about [his] staff”. 

Moreover, Casa described allegations in an affidavit by a former employee claiming he is a heavy drug user, obscene, adding that the “coordinated attack against him” had now moved “well within the realm of the inane and the ridiculous”.

“The fabrication of fresh nonsense on a now weekly basis, in what appears to a concerted effort, is intended to destabilise me, my team and my work - it will not succeed.”