Disgraced PM’s former aide Kurt Farrugia replaces Keith Schembri on Smart City board

Kurt Farrugia – a former top aide of disgraced former Prime Minister Joseph Muscat and current head of Malta Enterprise – has been named director on the board of Smart City, replacing his erstwhile “mentor,” accused financial criminal Keith Schembri, The Shift can reveal.

This is just one of several lucrative appointments Farrugia has been awarded by Prime Minister Robert Abela since the toppling of Muscat’s right-hand man. Schembri held the board positions from just after the 2013 election that brought the Labour Party into power.

The appointment was made in September, a few days after police arrested Schembri for the first time, when former Labour Party spokesman Farrugia was installed as a director of Smart City (Malta) Ltd and other related companies including Smart City Infrastructure Ltd, SCM Property Management Co Ltd and SCM Facilities Management Company Ltd.

Farrugia, who has no background in business, is now the only Maltese director sitting on Smart City’s board, representing the government’s 10% shareholding in the lacklustre 2007 project.

Musical chairs

Officially, Farrugia is no longer connected to the Office of the Prime Minister. In response to questions, he told The Shift that he is not currently being compensated for sitting on the board of directors of Smart City and related companies.

Schembri’s seats on the various boards became available after he was arrested and charged with a raft of criminal offences, including money laundering, corruption, forgery and fraud in March.

Although no significant progress has been made on the Smart City project – for which the original plan launched under a PN government was to turn a large tract of public land in Ricasoli into an ICT village – Schembri was deemed instrumental in forcing public authorities, including the Malta Tourism Authority and the Malta Gaming Authority, to move to the isolated area and lease office space from the Dubai-government ‘investment’.

Under Schembri’s directorship, Smart City controversially began selling sections of its state-owned land to private speculators. He was also involved in negotiations about a proposed revision of the ‘City’s’ original masterplan, to allow more focus on property development and speculation, despite it being located on public land.

Muscat’s gifts

In 2019, just a few weeks before his forced resignation, Muscat appointed Farrugia to the helm of one of Malta’s most important state entities, Malta Enterprise.

With a starting financial package of €130,000 a year, the role is one of the highest-paid government jobs there are. Kurt Farrugia was given a tailor-made nine-year contract, which will see his earnings rise to €180,000 a year, three times the salary of the prime minister.

The move to install Farrugia at Smart City is being considered by Labour insiders as a message from Joseph Muscat that despite a change at the helm, he is still in a position to influence government decisions.

Farrugia is also being pushed by Muscat to take an active role in the upcoming Labour Party electoral campaign, in order to ensure Muscat loyalists continue to consolidate their hold on Robert Abela, according to people familiar with the situation.

During the Labour Party leadership campaign in 2019, Muscat’s Castille threw its weight behind Abela’s candidacy, which helped him see off rival candidate Deputy Prime Minister Chris Fearne.

Since being elected Labour Party leader and Malta prime minister, Abela has retained in his office the same persons of trust that surrounded Muscat when he was prime minister.