He signed the Vitals MoU because he was told to, Chris Cardona tells court from the witness stand in the compilation of evidence against Joseph Muscat and Co
LIVE: Cardona signed Vitals MoU because he was told ‘we have to’
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13:58 | That’s it for today. Watch our summary in NEWZ MILL-QORTI later today. These are the dates and times of the next sittings:
23 September, 10:00 – 14:00 – Witnesses, except for Brian Tonna due to a previous court permission granted for traveling
2 October, 09:30 – 12:30 – Court experts appointed by the magisterial inquiry
13:47 | The court blocks Filletti’s line of questioning the minute it veers into territory we have already covered, indicating that the defence’s arguments are now running in circles. Cross-examination now handed over to lawyer Jason Grima.
Grima asks about Steward’s in-house accountants and what PwC was involved for. The witness insists that IFRIC 12 level accounting – which is the standard required for such concessions – requires high-level expertise, way beyond the paygrade of Steward’s in-house accountants.
Grima asks the witness whether the fact that both VGH and Steward Healthcare roped in PwC for work related to the concession was purely a coincidence. The witness says that Steward’s accountant was aware of PwC’s previous involvement and that she had reached out to PwC specifically because of that prior involvement.
13:33 | The court asks the witness to explain whether she thought the business plan was realistic. She says she thought so because there were enough external experts roped in by the client who supported the input he provided to her firm, including architects, engineers, and other specialist professionals who were required.
Galea passes on the cross-examination baton to Stefano Filletti, who asks what kind of work PwC did for VGH specifically, after VGH was set up within the context of Bluestone’s operations.
The witness explains that they provided financial modelling services to VGH, work which was supported by a UK-based specialist firm. PwC was then tasked with updating that draft model, though as we now know, this model was never finalised.
The defence is absolutely dragging the witness over the coals anytime she says her firm ‘assisted’ VGH, with repeated emphasis on asking the witness to define what this assistance was and who was responsible for the end product that came out of PwC’s analysis.
The witness claims that the client had already established a financial model and that PwC was only responsible for finetuning an already established draft plan. The defence keeps suggesting that PwC’s involvement was so limited it barely justifies their fees.
Filletti asks the witness to explain how they assessed the robustness of the business plan they were responsible for finetuning, and she does – pointing out that one simple, direct example of this would be to assess projected income and projected expenditure and determine what the profitability of the project would be.
13:25 | Defence’s cross-examination: Muscat-lawyer Vince Galea again wants to know all the details.
The witness specifies names of her team members and colleagues upon request: Michel Ganado, Claudine Attard, Nadia de Marco, Andrew Sammut (RfP stage).
Galea: “Which one of you went to accompany the client to banks and other such institutions for supporting documentation?”
“No, we never accompanied clients on these matters, that is always the client’s responsibility,” Spina says, standing her ground as Galea attempts to get under her skin by asking her about what the company would do to verify such documentation.
“There is a checklist of documents which the client must provide for such a request for proposals, and so our work was limited to the project management aspect of that process”, see adds.
“So is that all you do? What are clients paying you for then?!” Galea asks, raising his voice. The court silences the defence’s hostile line of questioning and asks the witness to clarify whether her department carried out any verification of the supporting documents, and she insists PwC were only hired in their capacity as project manager.
The witness now says that there were no glaring red flags about what she had seen from her end in this limited project management capacity, and that all supporting documentation they requested was indeed provided by the client in question.
Spina can be heard breathing furiously on the witness stand’s microphone as Galea takes his time looking up further questions on his phone.
13:21 | Asked by the court what the point of the financial modelling request was, Spina explains that the financiers which VGH claimed to be seeking would have needed to see such projections.
The witness adds that this process was never fully completed. This was a review of another foreign consultant’s proposed model (so effectively, PwC never finished a review of a financial model that was prepared at VGH’s request by a foreign specialist firm).
The court asks the witness to clarify how much of the actual accounting work fell to her, and she explains that this was a cross-department effort that required input from both her team as well as other teams within the firm.
13:12 | The witness refers to her role in the timeline of PwC’s involvement:
November 2014: Early draft of the business plan, socio-economic assessments to determine feasibility of the deal, all the way through to January 2015 (first letter of engagement).
April 2015: PwC contracted for request for proposals bid (second letter of engagement).
Spina continues to detail how her department was effectively responsible for checking the client’s homework (our words) – they would check the mathematical accuracy of the financial projections which were estimated by the client.
“We would do the so-called ‘dirty work’ so to speak – besides checking accuracy in numbers, we would also check that all inputs are adequately documented to ensure that the estimate reflects what the client is envisaging”, the witness continues explaining.
The prosecution asks where the financial projections came from (“Who came up with the idea?”), and the witness answers this was entirely the client’s initiative, at the behest of the criteria established by the request for proposals (which obliged that every bid must necessarily be accompanied by such projections).
13:04 | Angelique Spina, responsible for accounting and financial projections at PricewaterhouseCoopers (PwC), takes the witness stand.
After exempting the witness from her obligations towards professional secrecy, prosecutor Rebekah Spiteri asks Spina to delineate her role in PwC’s work on behalf of Bluestone as their client.
She assisted with the preparation of the business plan, financial packages and projections, and general project management vis-à-vis the information which was required at the request for proposals stage.
The witness says that, together with her team at the time, they had worked on the Vitals brief between April and May 2015.
Spina more or less repeats what her colleagues have referred to already throughout today’s hearing – that the MoU and the request for proposals stage were considered as separate phases by the firm, that Ram Tumuluri served as their key contact person from VGH’s side, and that Ambrish Gupta and Rashok Attehalli were presented to them as the medical experts on VGH’s team.
13:02 | The defence’s cross-examination is ongoing but there are no particularly salient questions from lawyers Jason Grima and Giannella de Marco.
Joseph Muscat’s lawyer Vince Galea now asks the witness about who exactly carries out client onboarding processes, and the witness explains that PwC has a dedicated team with herself in charge of risk management.
Pace Ross insists there were “no adverse risks” identified by her team at the time. She steps off the stand.
12:44 | PwC compliance officer Lucienne Pace Ross takes the stand and prosecutor Rebekah Spiteri asks the witness to present the letters of engagement issued by PwC in relation to Bluestone Special Situations, and the witness briefly describes the content of these letters. She begins the process of formally submitting these letters of engagement as evidence in court.
It is important to note that, though these letters have been already submitted as evidence in the parallel case (against disgraced former health minister Chris Fearne and other co-accused) which is being presided over by magistrate Leonard Caruana, the formal process of exhibiting these letters as evidence in this case must still be redone.
Likewise, she must again go through the formality of outlining how PwC’s client onboarding process occurs. You can read a previous live blog for more information about the company’s process.
12:42 | After Antoine Cremona steps off the witness stand, the prosecution says that a total of ten witnesses remain for the day, pointing out that they were not expecting such detailed, thorough cross-examination from the defence.
After loud protestations from the defence about the unrealistic amount of witnesses summoned for the day, the parties sift through the list of witnesses which can be heard today.
It seems we will be settling for two more representatives from PwC for the day while the other witnesses will be sent home to come back for another hearing.
12:33 | The defence circles back to Joseph Muscat, and Cremona says that neither he nor his team had any contact with the disgraced former prime minister. The defence asks the witness to clarify the firm’s advice about the MoU, and Cremona says that the MoU made the request for proposals vulnerable to the possibility of appeals from third parties who felt the bidding process may have been prejudiced by the MoU. This was largely due to the signatories on that MoU being the same ones who were behind what later was the winning bidder.
The witness refers to meetings which were held with the director of the department of contracts, and clarifies that Ganado Advocates had held these meetings due to the complications caused by the transitional period of the aforementioned EU directive.
The defence insists on asking questions which have already been directed at the witness, in spite of the magistrate’s repeated reminders to avoid repetition wherever possible. The witness has been on the stand for over an hour already, and has faced questions from four defence lawyers and counting.
After two more repetitive rounds of questions from defence lawyers Stefano Filletti and Edward Gatt, Jason Grima and Shazoo Ghaznavi are queued up for their turn. The witness’ answers are increasingly curt, and he is redirecting the defence towards Ganado Advocates’ legal advice which was submitted as evidence earlier on.
12:24 | Lawyer Vince Galea takes over questioning.
Galea: “Did Joseph Muscat ever interact with your firm or yourself?”
Cremona: “I never met Muscat and I do not believe the firm had any connections to him, either.”
The witness is asked to exhibit the letter of engagement issued by his firm as well as the legal advice provided to the government in relation to the request for proposals. Ganado Advocates were also asked to sign an NDA, which is also submitted as evidence in court. The witness will be testifying about these in more detail at a later stage.
Cremona is answering further questions about relevant emails and other internal correspondence which may be deemed relevant to the case, and further details about which emails would be most relevant to submit as evidence are hashed out between the defence and the witness.
The witness is asked about whether he observed anything that was outright “illicit” in the way the request for proposals was being originally drafted, and he says that “at the legal advice stage, we believed that structuring this deal as a transfer of real estate would have been wrong, though that was just our legal opinion.”
The witness is asked about whether they were asked to testify in the inquiry, and he says Ganado Advocates did not testify in that inquiry.
12:20 | The witness feels compelled to emphasize that there was no contact between Ganado Advocates and VGH after it was finished with the first engagement in July 2015. The only other time Ganado Advocates was involved with the concession was in 2023 when they were hired by the government in relation to the international arbitration proceedings related to Steward Healthcare.
A spat between the defence and the court ensues, as the court bars the defence from asking questions related to arbitration (due to the witness’ lack of exemption from professional secrecy in that regard).
12:09 | Antoine Cremona is asked to describe the exact terms of the letters of engagement which were issued by Ganado Advocates. De Marco asks whether there were multiple letters or just one, and the witness states that there was only one such letter.
“The request was to provide legal advice – at Aron Mifsud Bonnici’s request as instructing counsel for Projects Malta – for foreign investment in the healthcare sector.”
De Marco now asks about the EU directive which Cremona had previously managed and the legal advice that his firm had provided. She asks the witness whether this advice was taken on board by Mifsud Bonnici and the government, and the witness says that it was implied their advice was taken on board because the request for proposals was based on their “best practice” advice.
The witness explicitly states that the MoU was only mentioned in passing to Ganado Advocates a few days after they were brought on board. They had received a copy of the presentation which VGH had originally given back in January of 2015 and an unsigned bit of legal advice bearing DF Advocates’ letterhead.
The MoU only showed up in Ganado Advocates’ inbox after they were roped in, though it was in their possession before the RfP was written up. In fact, the witness says, their legal certainty about the need for an open public procurement process was based on everything they had seen up until that point (i.e.: the MoU was not going to be a viable route for such a concession).
11:55 | The witness also refers to other external consultants who were roped in, RSM Malta Ltd. He specifically refers to George Gregory, who previously testified that, even though he was involved in multiple stages of the hospitals concession, could hardly remember anything about the due diligence processes which ought to have been carried out about VGH.
The witness refers to a list of familiar names when the prosecution asks who the key decision makers were in relation to the RfP – David Galea (Beat Ltd), Aron Mifsud Bonnici (one of the accused), George Gregory (RSM Malta Ltd).
“There was so much pressure about issuing this request for proposals as soon as possible that at one point we were even urged to publish it as is, without finalising it. We had not done so as the document was not fit to be issued at the time…we were very clear that we needed further directions because as things stood, it would not have been legally viable.” – Antoine Cremona
The witness says that they faced particular pressure from David Galea, though the witness clarifies that it was not entirely abnormal to face pressure from clients who are facing deadlines. The prosecution has no further questions, and Giannella de Marco takes over questioning on behalf of the defence.
11:48 | One of the things the witness seems keen on reiterating in court today is the fact that an EU directive which regulated public-private partnerships at the time was still yet to be transposed at the time the request for proposals was being drafted.
Ganado Advocates had erred on the side of caution, the witness says, reminding the court that the firm had brought in key experts to assist with this. Their final advice was to draft an RfP that was compliant with the directive even before it was transposed in local law.
Prosecutor Rebekah Spiteri asks the witness to clearly explain what the overall brief for the RfP was and what kind of health services were envisaged, and he briefly talks about a flurry of meetings in which these details were hashed out and it was concluded that a public tendering process must ensue.
The witness emphasizes again that there was severe urgency attached with the second phase of drafting the legal framework, with no particular reason given other than the tightness of the deadlines.
11:41 | Antoine Cremona, representing Ganado Advocates, is the third witness in today’s sitting. Ganado Advocates have advised Projects Malta as well as the health ministry at the time.
After briefly outlining Ganado Advocate’s provision of legal services (February 2015 – July 2015) to Projects Malta and the ministry, the witness explains that the firm’s involvement in the process was with drafting the legal framework for the request for proposals and that their primary point of contact was lawyer Aron Mifsud Bonnici, who was also engaged for this project by his close friend and client, disgraced former health minister Konrad Mizzi. Mizzi and Mifsud Bonnici are both among the accused in the case.
To avoid boring you with too many details we’ve already talked about before, you can read our previous live blogs for the full context of what kind of legal services Ganado Advocates provided throughout the first half of 2015 at the time when the original request for proposals was drafted. We’ll add any new details that emerge from Cremona’s testimony today as we go along.
11:37 | Defence lawyer Jason Grima now takes over questioning. Grima asks the witness whether he ever testified in the magisterial inquiry or whether the police ever approached him about the material he is testifying about today.
The witness says none of this ever happened. Grima then asks the witness about whether PwC was ever involved in any kind of planning related to financials and auditing of those finances, and the witness downplays involvement in this aspect.
Grima asks how come PwC was not involved with auditing VGH, especially since it is known VGH had failed to file audited accounts. The witness says that they were not involved in that and that they only learned about this through press reports which exposed VGH’s non-existent accounting.
The defence asks the witness whether PwC was involved with Steward Healthcare, and though it is known this was the case, the witness repeats that he was not involved as PwC’s representative in the secondary phase of the process. The witness steps off the stand.
11:31 | Defence lawyer Vince Galea pointedly asks the witness whether he believes these first two engagements were realistic and whether he believed they could be pulled off.
“At that point in time, yes”, the witness says curtly.
Galea asks whether PwC’s offices were ever searched by the police, and the witness says this was not the case. Galea indicates that his end of the grilling is over, and it is clarified that the next witness from PwC is to present the requested letters of engagement.
11:29 | The court asks the witness to ensure that all letters of engagement related to the concession are kept in file and not physically destroyed (at the request of the defence). The defence claims to want to anticipate the potential destruction of documents which were first filed ten years ago.
The prosecution says that it has no objections to the request. The court reserves the right to decide on the request after hearing other witnesses who were asked to testify today, including other PwC representatives.
11:23 | The court takes over questioning from the defence after disallowing the approach, and clearly asks the witness to outline the specifics of how the firm was subcontracted by the concessionaires.
Referring to the first engagement in relation to early business plans, the witness explains that they were asked to draft this business plan in the context of the government’s push for medical tourism, so “a lot of research went into making this project sustainable and relevant”.
“Obviously, you don’t just build up an investment like this without expertise, so we brought in experts who ran medical facilities overseas to provide their estimates of what the site would need and how much investment would be required”, the witness continues, pointing out that their time was largely consumed on such research-based activities.
The witness further clarifies that they were not “experts in the field” and that their role was largely about bringing in all the necessary knowhow to evaluate the pitch and report on the best available practices that could have been used for this project. PwC submitted four volumes of “deliverables” to the concessionaires, which was what the client presented to the government to substantiate the validity of their bid.
11:20 | PwC’s Michel Ganado is asked to clarify whether there are any differences between what he described as “a client onboarding process” and due diligence, and he clarifies that the onboarding process is part of their overall due diligence.
The defence asks the client to specify what he means when he says that PwC “helped” the client compile their business pitch and bid, and the court asks Galea to outline the relevance of his questioning.
Lawyer Galea insists that PwC must explain what kind of help was provided and how billing and payments were issued. The magistrate points out that PwC is not one of the accused, nor is Bluestone, further questioning Galea’s approach.
Galea says that the relevance of the evidence being sought at the moment will become clearer at a later stage of the proceedings, claiming that “the defence’s approach has not yet been defined” and that this evidence will help the defence do so.
11:11 | The defence asks questions about a presentation which PwC had helped Bluestone prepare, one which was given at Castille and was meant to put forward Bluestone’s business plan in January 2015.
Michel Ganado says he was present for this presentation, which was the first demo that led to the MoU. The witness says he first learned of the RfP when Bluestone approached them for further assistance, and he repeats what he previously said.
Ganado seems keen to repeatedly emphasise that, while his firm did provide technical support to Bluestone and related companies, all final submissions were the client’s responsibility.
The witness is now repeating previous assertions which he already made, providing a general overview of the multiple times in which PwC was asked to assist VGH or its relevant subsidiaries. Filletti finishes his questioning and Joseph Muscat’s lawyer Vince Galea continues questioning.
11:08 | Answering questions about further consultancy engagements which PWC had with VGH after the concession was awarded to them, the witness mentions that there were other engagements and that a relevant witness can be brought up to testify about this.
Defence lawyer Stefano Filletti takes over questioning: he refers to Bluestone and asks the client to define what the company was.
“An investment company,” the witness says.
Filletti: “What assets or relationships did Bluestone have?”
Witness: “It was an investment company whose UBO we screened – Mark Pawley.”
Filletti: “Do you know what VGH is? Does it have a relationship with Bluestone?”
Witness: “After VGH was awarded the concession, it was incorporated as part of Bluestone’s structure. Bluestone Special Situations 4 was the ultimate beneficiary of VGH.”
Filletti: “Did you offer services to Bluestone related to VGH post-concession award?”
Witness: “The services were in the context of the concession. We provided our services to VGH as a subsidiary of Bluestone.”
Filletti: “Did you provide tax / professional advice to VGH after the concession?”
Witness: “We have all the relevant documentation and, since I was not involved directly, I’d rather reserve my answers.”
11:01 | Muscat’s lawyer now asks the witness about what the due diligence process looks like from PwC’s perspective, and he specifies that PwC has a “client onboarding process.” The witness says that he did not see any red flags about VGH during onboarding.
The defence asks the witness about criticism which was levelled at the original bid which his firm helped draft, pointing out that it was considered unrealistic.
“Our role was to bring together the business plan projects, which obviously need to be coherent and consistent. But it wasn’t our business plan. We helped our client draft their plans.”
Defence: “How did you help them, exactly?”
“If you engage an architect to review a site and give you a quote for expenditure, it is a process of relying on technical input and then feeding it into your final projections, which is kind of like what we did,” the witness says.
“If the client gives you material which bothers you or you feel is off, would you still approve it?” the defence further asks, with magistrate Montebello asking the defence about what the specific question is. The defence then asks the witness to explicitly state whether he would have personally felt comfortable signing off on the client’s financials.
“The financial model was built from the bottom-up featuring input from different people. There was a discussion process to challenge certain aspects of what seemed inappropriate, but at the end of the day, the decision of whether the financial model is tenable or not is up to the client,” the witness insists.
Defence: “Did you ever sign off on anything which you disagreed with?”
Witness: “No, I repeat – we never signed off on anything…”
The defence asks the witness to specify whether he is claiming that he never signed off on a document. The witness replies that he had personally signed off on the draft pitch for the MoU while clarifying that VGH’s bid in relation to the RfP was not a PwC-led project.
The witness is asked to exhibit the relevant engagement letters, and he says that a colleague from PwC has already been asked to testify and submit this material.
10:56 | Cross examination by defence lawyer Gianella de Marco: After briefly recapitulating the main points which the witness just illustrated, De Marco asks the witness to clarify whether the bid their former clients submitted for the request for proposals was different to the business plan which was submitted in relation to the MoU.
The defence is trying to draw a distinction between the original MoU and the request for proposals, and the witness says that, “to his understanding,” the request for proposals was a wider, bigger plan than the MoU, which primarily envisioned plans for the development of a medical complex in Gozo.
“Did you see anything untoward about this MoU?”, de Marco asks.
“No”, the witness says curtly.
10:53 | Spiteri now asks the witness about when the business plan was completed, and he says it was ready to go by the stipulated deadline. He then says PwC was subcontracted by Bluestone Special Situations – the primary offshore company behind the VGH network – to help them ready a business plan that would be suitable for the request for proposals (the second time PwC was engaged by VGH).
10:47 | The second witness in today’s hearing is Michel Ganado, management consultant at PricewaterhouseCoopers (PwC). After exempting the witness from his professional secrecy obligations, prosecutor Rebekah Spiteri asks the witness to explain what PwC’s involvement in the concession was.
The witness refers to information which has previously been mentioned by other representatives from his firm in the separate case against Chris Fearne and Co – that VGH had approached the firm in October 2014 to help them submit a business pitch for the earlier drafts of the hospitals concession by January 2015.
The prosecution asks the witness to say who the designated liaison agent from VGH was, and he says that it was Ram Tumuluri.
10:45 | Montebello now asks whether Cardona recalls Joseph Muscat being present at the Castille meeting, and he says that “if he was present, I think I would remember it”.
Rebekah Spiteri asks the witness about the similarities observed between the MoU and the final request for proposals, and he says he is not competent to answer questions about that since he was not involved. The witness steps off the stand.
10:43 | Cross examination: The defence asks Cardona to explain whether he saw something that bothered him about the MoU since the court experts pointed out flaws about how it was put together, and he says he had not seen anything wrong.
Cardona is asked to say whether he was ever pressured by Joseph Muscat to sign this MoU or whether they at least discussed it, and he says that no on both counts.
Magistrate Montebello seems irked by Cardona’s repeated insistence that this MoU was a “preliminary, non-binding agreement to test the waters”, and she asks again about why the MoU was signed in the first place.
He waffles the answer and insists that the MoU was non binding. Cardona further adds that his ministry was not involved in the issuance of the tender, and he vigorously insists he was not connected with this process.
10:39 | “So you just went and signed?”, Cardona is asked.
“Yes. They told me we have to sign this MoU. It was to set up a sustainable health system and its main drive was to attract medical tourism. It referred to a Gozo Medical Complex. I signed it because I was responsible for Malta Enterprise”, Cardona says.
Spiteri asks Cardona to explain his claim that the government did not follow up on the MoU. Ashok Rattehalli, Mark Pawley, Chaudry Ali – mentioned the signatories which made up the agreement and the shell companies which made up the offshore network that VGH was.
He says the agreement was signed in Castille, not within the ministry. Magistrate Montebello asks about why this was the case and Cardona says he does not recall specific details about who was present and why it was signed in Castille.
Cardona: “As far as I remember, there was nobody else in the room except for Malta Enterprise representatives.”
Montebello: “Was there anyone from Castille?”
Cardona “I don’t recall, no.”
This contrasts greatly with the reported notion that Keith Schembri was allegedly directly involved in these negotiations.
10:34 | Cardona insists that the first time he had seen this MoU was right before signing it. Prosecutor Rebekah Spiteri asks why he had signed it if he had no idea what it contained before signing, and he says that all he knew was that there was a general intent to collaborate on a project involving Barts Medical School and that, from a policy perspective, the government’s priority at the time (October 2014) was “medical tourism and academic excellence”.
The lofty claims about the value that were made about revenue generated from medical tourism was debunked as hogwash by the NAO when that office reviewed VGH’s bid, which perfectly matched the requirements already laid out to them in the MoU.
10:31 | Cardona answers further questions from magistrate Rachel Montebello about his role in the deal. He refers to a list of MoU documents signed through the auspices of Malta Enterprise, all of which were not followed through. He is comparing the hospitals concession MoU with the others on this list, downplaying the significance of the MoU and repeating arguments he had made when testifying during the public inquiry.
10:28 | Cardona disingenuously claims that the MoU in question was not followed through, contrary to what the NAO has already established through its independent audit. The NAO said that the MoU closely mirrors the final conditions which emerged from the actual request for proposals.
10:26 | Cardona: “This MoU was one of many which I signed as minister for the economy. I was only involved in signing these documents. Malta Enterprise was in my portfolio. They had a client – Barts – and this MoU was signed with the intent of establishing whether a business plan was going to be presented to government prior negotiations. Secondly, this MoU was also pegged to deliverables. I was solely asked to sign the memorandum – I had many of these on my desk, many of which would not be furthered.”
10:22 | Magistrate Rachel Montebello walks in, and after a quick roll call, Chris Cardona takes the stand as today’s first witness. Apparently, Cardona lives at an address in Madliena at the moment.
Prosecutor Rebekah Spiteri asks Cardona to testify about his involvement in the hospitals deal. After Cardona interjects to state he was only asked to testify about the memorandum of understanding (MoU) and not the deal at large, she asks him specifically about his involvement in the MoU.
Cardona says that he only saw the document once before signing it as minister for the economy and asks to see it again before facing questioning.
10:00 | Good Morning! Julian Delia and Michael Kaden are reporting live from Hall 22 again where the compilation of evidence against Joseph Muscat and Co continues this morning. Chris Cardona will be testifying.
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