Probe reveals over €2 million in direct orders to Panama Papers’ firm in Malta

• The firm that set up the Panama companies for the Prime Minister’s close aides gets awarded over €2.4 million in government contracts

• 85% of those contracts, worth €2 million, were direct orders

• 2015 was Brian Tonna’s bumper year: €840,000 in direct orders

• The company, in fact, got much more than the information made available because one of its main clients – Konrad Mizzi’s Projects Malta – refused to disclose contracts.

Nexia BT, the firm that set up Panama companies for the Prime Minister’s close aides, has been awarded over €2.4 million in direct orders, tenders and contracts, directly or through its owner Brian Tonna in just four years, a detailed analysis of official data shows.

Between 2013 and 2017, the contracts awarded to Tonna, his company Nexia BT and its subsidiaries totalled €2.4 million, covering a broad range of services supplied to government, from advising the Prime Minister to consulting on public toilets.

The analysis was based on information published in the government gazette, parliamentary questions, and Freedom of Information requests filed covering that period of time. Data from 2018 is still being published and has been excluded from the analysis.

Of those, 85% – or over €2 million – were direct orders. Direct orders are only meant to be given in exceptional circumstances, because they bypass normal public procurement rules. In 2015 alone, Nexia BT picked up a whopping €840,000 in direct orders.

The income of Tonna’s company from the government is in fact much higher. The amount excludes contracts awarded by one of Nexia’s main customers – Projects Malta, headed by Tourism Minister Konrad Mizzi for whom Tonna set up offshore structures only a few days after he was elected.

For reasons known only to Mizzi, who remains in charge of Projects Malta, the entity has failed to provide information on contracts awarded despite repeated requests through parliamentary questions as well as Freedom of Information requests.

Tonna, the firm’s owner, even served as an adviser to Justice Minister Owen Bonnici (at the time Parliamentary Secretary) for close to three years despite the fact that he was facing a judicial inquiry into potential passport sale kickbacks to the Prime Minister’s chief of staff Keith Schembri.

Tonna’s links to the Labour Party stretch back to years before it was elected in 2013. Tonna had served as the independent auditor to the private business group – Kasco – owned by Keith Schembri, the Prime Minister’s chief of staff.

A Prime Minister’s salary, on the side

A comprehensive picture of all that Nexia BT was awarded was not possible, due to the fact that the government has made a habit out of announcing contracts assigned but not declaring their value.

A freedom of information request by The Times of Malta revealed that Tonna was given a full time role as a Justice Ministry adviser between August 2014 to August 2016, and a part-time role until August 2017.

The package, valued at some €60,000, put him on a comparable financial package to that of the Prime Minister. This, in addition to a similar appointment from the Justice Ministry unveiled by a parliamentary question in 2015.

The data shows that 2015 was Tonna’s bumper year. It was the year before the Panama Papers scandal broke and the year when Mizzi and Schembri’s Panama companies were activated and transferred to New Zealand trusts.

During 2015, Nexia BT picked up a whopping €839,990.42 in direct orders including:

• Close to €200,000 in direct orders from OPM for matters described as “of national importance” and in connection with CHOGM,
• Over €130,000 in direct orders from Mizzi’s ministry, which included €120,000 for advisory services on hospital waiting lists, and
• Over €220,000 in direct orders from Chris Cardona’s ministry, the bulk of which were for advisory services in relation to the Malta Gaming Authority.

Despite the firm coming in for heavy criticism after the Panama Papers, the Prime Minister’s Office continued to rely heavily on its advisory services.

A report on the impact of the Panama Papers by Oxford University and Reuters lists the action taken around the world in the aftermath of the leak of 11.5 million documents from the Mossack Fonseca database, that was represented in Malta by Nexia BT.

Armenia re-opened a corruption probe into a top law-enforcement official and member of parliament, US authorities arrested an American citizen, Iceland’s Prime Minister stepped down after two days and Prime Minister Nawaz Sharif of Pakistan was forced to resign, imprisoned and barred from ever holding public office again.

Yet, the lack of action in Malta has led to backlash against journalists who reported the findings, instead of those culpable. In Malta, those exposed remain at the helm and the company that set it all up continues to rake in taxpayers’ money.

And there’s more

The Financial Intelligence Analysis Unit had also mentioned Tonna, Schembri and other individuals in reports on suspicious money laundering activities related to the sale of passports.

Tonna and his firm continued to rake in contracts, particularly from Transport Minister Ian Borg – a contender for the Labour Party’s leadership race.

In 2017, Nexia BT was also appointed exclusive concessionaires for the Malta Visa and Residence Programme (MRVP) in the Middle East. The company was paid €10,000 for each successful applicant under the programme, according to media reports.

Then, Tonna – together with another three Nexia BT staff members – also sat on the government’s selection committee for the bid to build a €400-million new power station in Delimara against a security of supply agreement guaranteeing Electrogas, the winning consortium, hundreds of millions of euros from the State electricity provider over 18 years.

The deal involves Azerbaijan’s energy provider SOCAR. And then there’s China, which owns a 33% stake in Enemalta and majority control of the BWSC plant at Delimara.

It has since emerged that the owner of the mysterious Dubai company that was set up for kickbacks to Schembri and Mizzi, according to leaked emails, belonged to one of the Electrogas directors – Yorgen Fenech.

Best clients, close to the Prime Minister

Tonna’s links to power are reflected in the contracts received from different Ministries, according to the results of the data analysis. Mizzi, Cardona and the Office of the Prime Minister are those in government who favour Nexia BT’s services the most. Yet, Tonna benefited from a number of other government departments.

Mizzi emerged as one of the main persons in government sustaining Tonna’s operations. Mizzi awarded Nexia BT close to €300,000 in Labour’s first year in power, over €90,000 the following year, and another €300,000 over the next three years until 2017.

These amounts exclude the contracts to Nexia BT awarded by Projects Malta, which falls under Mizzi. Projects Malta has consistently turned to Tonna’s firm for services. Nexia BT was involved, for example, in the assessment of the move of the ITS campus in St George’s Bay to Silvio Debono – a project that remains controversial and the subject of an investigation by the Auditor General.

People at the former ITS campus witnessed personnel from Nexia BT touring the campus and holding meetings even when the government was still denying there was any intention to give the land to Silvio Debono, who had also denied it.

Cardona awarded Nexia BT close to half a million over three years mainly relating to the Malta Gaming Authority, while the Prime Minister’s office awarded the firm over €300,000 in addition.

Now it seems Nexia BT is moving into the realm of the Labour government’s next grand idea – Blockchain. Not that anyone would notice based on company records. But then, Karl Cini posed for a photo that gave it away:

Despite being at the centre of scandals that have rocked the government, Nexia BT is going from strength to strength.