‘Lost’ hospitals’ MOU found at Malta Enterprise, despite Kurt Farrugia’s denials

Declarations made earlier by Kurt Farrugia, CEO of Malta Enterprise and spokesman of former prime minister Joseph Muscat, regarding the ‘lost and found’ MOU detailing the takeover of Maltese public hospitals, were proven false by the latest National Audit Office (NAO) report.

Soon after the National Audit Office announced that the MOU could not be provided to parliament for scrutiny, as ministries insisted that the memo could not be found, government agencies were ordered to search for it, on the orders of Prime Minister Robert Abela.

Farrugia had told The Times of Malta that “there was no lost MOU” and that “Malta Enterprise does not have a copy, as it was not a party to it”.

He said this after Malta Enterprise had battled for three years in court defending its refusal to provide the agreement through a Freedom of Information request.

Despite conclusions reached in the NAO report based on its contents, the document remains unpublished although The Shift has managed to gather information on what it contains.

The latest NAO report published earlier this week, compiled after the MOU was at last ‘found’, discredits Farrugia’s declarations, as it shows that Malta Enterprise was not only very involved in creating the ‘lost’ MOU but also that the memo was eventually discovered at the offices of Malta Enterprise.

“During the course of the interviews, the NAO established that the MOU was submitted to the OPM by the Principal Chief Officer Malta Enterprise,” the report notes. It was the OPM that eventually passed on the ‘found’ document to the Auditor General.

It is not yet known why Farrugia issued such bold denials, even while the MOU was at Malta Enterprise.

It was Farrugia’s predecessor, Mario Galea, who was heavily involved in the MOU process, on behalf of Malta Enterprise.

The report shows that Malta Enterprise was involved in discussions about the MOU, and was also represented during meetings held at Castille organised by former OPM Chief of Staff Keith Schembri.

Schembri was Farrugia’s boss who, as chief government spokesman, was responsible for knowing what was going on at Castille.

Taking a dig at his former aide, Schembri later contradicted Farrugia.

In a blame-game denial issued soon after the latest NAO revelations earlier this week, Schembri pointed to Malta Enterprise and Galea, stating “the MOU was signed between Malta Enterprise and companies related to Vitals.”

According to Schembri, his only role in the MOU saga was to provide a room inside Castille for the signing ceremony.

The NAO report also notes that Malta Enterprise was involved in the due diligence of the investors for this agreement. However, Malta Enterprise refused to perform the due diligence, citing provisions in the Business Promotion Act and legal advice.

The NAO later said it had serious reservations about this stand taken by Farrugia on behalf of Malta Enterprise.

The Shift also learned that soon after the MOU with the VGH investors was concluded in 2014, Galea moved significantly higher up the chain of command.

Last year, soon after Muscat lost his bid to become European Council President, Farrugia was given a contract as CEO of Malta Enterprise, despite no previous experience in the field, with a starting financial package of over €130,000, reaching €180,000 over nine years.

At the same time,  Galea was retained as chief advisor to help Farrugia get accustomed to his new position.