Prime Minister resigns over corruption allegations

The Prime minister resigned immediately, bringing down his government after an investigation into corruption involving his Party was launched.  He argued that although suspicions did not imply guilt, they cast a serious shadow.

“In such a situation it seems only right that by resigning myself I will give the opportunity for light to be shed on the facts” he declared.  Of course, this is not Malta but Estonia – another EU country, galaxies away in terms of governance, transparency and accountability.

Estonia achieved its independence from the USSR in 1991, three decades after Malta’s.  Yet Estonia is light years ahead in terms of political maturity.

Prime Minister Juri Ratas was not implicated in the corruption. Investigations have just begun. Yet he immediately resigned to allow investigations to proceed without perceived government interference.

Ratas’ Party was a suspect in a criminal investigation over the financing of property development. The company Porto Franco received a State loan for developing the old city harbour. The Party is accused of accepting donations from Hillar Teder, the businessman behind Porto Franco.

Malta’s own Hillar Teder is Silvio Debono. Joseph Muscat’s government ‘donated’ 24,000 square metres of prime land valued at €67 million to Debono’s DB group for a meagre €15 million, a pittance to be paid over seven years without interest.

The deal stank. The call was masked to suggest it was for hotel equipment. €10,000 were required to reveal it was for a concession for prime land on which residential property could be developed. Not surprisingly, Debono was the sole bidder.

Former Opposition Leader Simon Busuttil opposed the deal publicly. Debono was livid. He demanded the PN pay back the money he had donated. He claimed he paid tens of thousands in salaries of the PN secretary general and the CEO.

In addition, Mario Demarco was in his pocket, negotiating on his behalf with the OPM advisor Alex Sciberras on the concession. Demarco’s meetings at Konrad Mizzi’s office were only revealed by the media.

Debono was sure nobody from the two Parties would whimper – which is why Debono was apoplectic when the PN opposed him. The National Audit Office (NAO) was asked to investigate.

Its 250-page report is shocking. The NAO was obstructed and thwarted at every turn. Konrad Mizzi, a key figure in the rotten deal, refused to attend meetings. Essential documents were missing. Minutes were not found. Months of investigations could not even determine whether Joseph Muscat or Mizzi decided to “gift” the land to Debono. The OPM and Tourism ministry “passed the buck between them”. The NAO concluded this was “of grave concern”.

Projects Malta bypassed all standard procedures. No authorisation was sought from the contracts department. Mizzi’s permanent secretary claimed advice was sought from the Attorney General to issue the concession. The Attorney General denied his advice had been sought or given.

Government’s excuse for conceding the land was that the Institute of Tourism Studies (ITS) needed relocation. The NAO found no evidence that the ITS board of governors requested relocation or was even involved in the decision. They had nowhere to go.

The NAO wasn’t fooled. It concluded the government had “inappropriately prioritised” regaling the land and showed a “false sense of urgency”. In short, the land wasn’t disposed of because ITS needed relocation.  ITS was kicked out to make way for Debono.

The State pumped €2 million to make a temporary facility in Luqa available for the ITS. The €80 million ITS campus at Smart City had not even got off the ground. The State would spend millions more on a road, a tunnel and other works to facilitate Debono’s development.

The public outcry forced Muscat to call Debono to Castille. The issue, Muscat said, had become “politicised” and so Debono had to cough up more money. Nothing irks a businessman more than being made to pay another penny for a deal already sealed. And boy, was Debono incandescent.

A compromise was struck where the government could claim it would be recouping €56 million from Debono. But really the additional money would come from private individuals buying apartments.

The Planning Authority approved the application in September 2018. The Appeals Court nullified it in June 2019 – because of the conflict of interest of a board member.

The NAO conclusions were damning. It could not be sure the deal was even “regular”.

Even the Malta Developers Association was incensed.  It called on the government to take back the land, considering the serious NAO concerns.

Why were Joseph Muscat and Konrad Mizzi in such a rush to please Silvio Debono?

Debono admitted he regularly donated thousands of euro to the major political parties. Johann Buttigieg, the Planning Authority’s executive chairman and Muscat protege, attended Silvio Debono’s anniversary party even while planning permission was pending.

Clayton Bartolo, replacing Mizzi as tourism minister, was photographed with Debono at his pre-electoral pasta night organised at Debono’s hotel. Bartolo was the government’s representative on the Planning Authority. He voted in favour of Debono’s project. Another member of the planning board was flown in by private jet to vote for it, costing the State thousands of euro.

Debono even admitted meeting Keith Schembri.

Silvio Debono knew he would get the land and the permits. He was selling apartments before the Planning Authority even voted.

In Estonia, the prime minister resigned the minute suspicions arose when a Party donor was given a State loan – a criminal investigation was launched. In Malta, a Party donor is gifted prime land for development for a fraction of its true value. The National Audit office doubts the deal is legal.

Malta pays millions more to evict the ITS and build roads and a tunnel for Debono’s development. The Minister actively hinders the NAO investigation and his permanent secretary gives false information. Nobody resigns. No criminal investigation follows. And another generous donor gets his reward. And the people lose, again.