From €16 million to €80 million in seven years: how the public funded the hospitals’ fraud

Public payments for the operations of first Vitals Global Healthcare and then Steward Health Care grew from €16 million in the first year of the scam to a whopping €80 million last year before Mr Justice Francesco Depasquale stopped the daylight robbery dead in its tracks with his ruling rescinding the entire deal.

Over the seven years between 2016 and 2022 in which the heist was perpetrated, parliament consistently voted for payment increases. By the end of it, the Vitals-Steward operation was paid a total of €390,702,135 – much of which went to salaries and operational expenses, but a lot of which is still unaccounted for.

The Medical Association of Malta, a leading critic of the lopsided and now proven fraudulent deal, published the yearly figures, extracted from the budgets of the respective years, and spelled out how much Vitals and Steward have been paid by the Maltese public.

The figures show that from the €16 million budget parliament initially gave the set-up in 2016 – when VGH took control of the St Luke’s, Karin Grech and Gozo General state hospitals – to the €80 million awarded to Steward for 2022, payments had increased by an incredible 400% with little or nothing to show for it.

In 2017, the second year of operations, VGH saw its funding doubled to €33.5 million and increased again in 2018 to €40.2 million. The concessionaires then benefitted from a parliamentary vote of €46.5 million and by 2020 parliament payments were raised further still to €61.6 million in favour of VGH’s successor, Steward Health Care.

In 2022, Steward was paid €69 million but funding for this year alone was to be a record, according to the latest budget approved by parliament, with Steward have been allotted €79.5 million in public funds.

Less than two years into the concession, Vitals sold it to Steward Health Care, along with around €55 million in debts, for a token €1. But what wasn’t made public at the time was the €100 million side clause agreement Steward and the government signed, by which Steward would be paid the sum should the concession be cancelled and the government was also to be obliged to make good on any Steward debts.

That agreement was also shredded by the courts.

Independent politician Arnold Cassola said on Sunday he has written once again to the State Aid Monitoring Board and to the European Commission in the wake of the damning court ruling, asking for an update into an investigation he requested into the matter two years ago.

The request for an investigation came after court testimony from former prime minister Joseph Muscat who in January 2021, said the side letter €100 million guarantee for Steward Health Care was entered into with the precise intention of evading state aid laws.

“It is extremely serious that Joseph Muscat, the Prime Minister of the country, admitted under oath that his government concocted this stratagem to evade Maltese and EU laws guaranteeing a level playing field, in order to favour Steward Healthcare,” Cassola said at the time, and reiterated this morning.

“This is an illegality of gigantic proportions and totally damning for our country, even more so when we have been suffering from so much reputational damage in the financial field over the last years.”

He reiterated in his second letter today, “As chairman of the State Aid Monitoring Board, I ask you to act fast and start an immediate investigation into the blatant illegalities of our former prime minister and his administration.  Our country cannot afford to tolerate such illegalities, which are damaging the whole country and population.”