Gaffarena loses appeal as court confirms Old Mint Street building deal illegal

The appeals court has this morning confirmed a 2018 judgement relating to what has become known as the Gaffarena Old Mint Street scandal, confirming that a deal made by the Labour government in 2015 was illegal.

In its final sentence, the court presided by Judges Giannino Caruana Demajo, Tonio Mallia and Anthony Ellul confirmed in its entirety the first ruling, declaring all the arrangements made by the government and the Gaffarenas as null and void, including all the €1.8 million given by the government in a swap for part of a Palazzo in Valletta.

The appeals court slammed the Gaffarenas for filing the appeal, stating that “they must have understood the court’s original sentence inversely”, deeming the compensation illegal.

The court ordered that following this appeal, the government has only a few weeks to make sure that the deal and all the contracts involved are rescinded.

The Old Mint Street scandal

In 2015, The Shift’s managing editor Caroline Muscat had revealed that the Lands Department, under the guidance of then parliamentary secretary (now Minister) Michael Falzon paid €1.65 million to Gaffarena for part ownership of a Palazzo in Valletta’s Old Mint street, which he had bought for a fraction of the price just weeks prior to the deal.

Apart from making a cash profit of some €650,000 in less than two months, Gaffarena, through his contacts in the Labour government, had also managed to gain several tracts of public land in a swap with the government as part of his ‘compensation’ for half of the Palazzo.

These included 25,000 square metres of land in Zebbug, 5,000 square metres at the White Rocks in Naxxar another 6000 square metres in Ta’ Kandja, Siggiewi, 10,000 square metres at Handaq in Qormi and property in Manuel Dimech Street in Sliema. Most of the land was strategically identified to enhance the value of Gaffarena’s existing properties, some built illegally.

Political impunity

The deal now deemed illegal included the involvement of Clint Scerri – a canvasser of Michael Falzon and his person of trust with direct links to Castille. No one has ever taken political responsibility for the scandal.

Following public pressure, disgraced former prime minister Joseph Muscat was forced to admit irregularities in the whole deal and started a court case to rescind the illegal deal in its entirety.

At the same time, he put all the blame on then Parliamentary Secretary Michael Falzon, who was forced to resign.

Only a few months later, the same prime minister (Joseph Muscat) re-admitted Falzon back into his cabinet, this time promoting him to minister.

Falzon has been re-confirmed in his seat by current Prime Minister Robert Abela.