Julian Delia reports live from Hall 22
LIVE | Vitals Case Sitting 10 July
14:00 | That’s it for today. Thanks for following!
13:52 | Claudine Attard and Andrew Sammut from PwC have been exempted from testifying today, since she they not have any direct involvement in the onboarding process related to VGH.
Adrian Said (former Projects Malta CEO) will testify tomorrow instead of today.
The magistrate is going over the lists of remaining witnesses to determine which testimonies still need to be heard and which ones can be temporarily suspended until further notice – assuming that the facts they were meant to establish were already established by other witnesses.
13:40 | “Why did Deborah Chappell need to physically present all the documentation related to the bid on behalf of VGH?”, asks defence lawyer Robert Montalto.
The witness says that she was not directly involved in this process and that she would not know how or why Chappell would have been involved in this process. She reiterates that such a question could be answered by her colleagues in risk management.
Chappell is a lawyer who stands among the accused of the case, and was targeted by a 40 million euro freezing order. Chappell formerly served as VGH’s in-house legal council.
The witness is now answering questions about the adjudication process. She is asked about whether she knows of any services which PWC provided between 2015 and 2018, and she answers in the affirmative. Two letters of engagement are presented – one was a technical review of the financial model to be deployed by the bidder and another was in relation to an evaluation estimate of the concession itself.
Angelique Spina steps off the witness stand. Lucienne Pace Ross is to be summoned as witness, the magistrate confirms.
13:35 | After releasing the next witness, Angelique Spina on behalf of PwC, from all professional secrecy obligations, she is asked about her involvement in the deal, and she states that she was asked to assist with the process of drafting VGH’s final bid for the concession.
Like her colleague, Spina refers to the risk management team and refers to Lucienne Pace Ross as the individual who would have been in charge of onboarding Ram Tumuluri obo Bluestone Special Solutions.
She explains that her role mainly consisted of reviewing and updating the business plan of their client as it evolved throughout the course of their engagement and ensuring that all the financials were vetted as accurately as possible.
13:29 | The defence asks the witness whether a representative from his firm had testified in the inquiry that led to this case, and he says that he is not aware whether anyone from his firm had testified or not.
A quick look at the inquiry report suggests that there was one such representative, Deborah Gatt, who testified as a representative of PwC in its role as administrator of the now-shuttered Pilatus Bank.
The defence requests that this witness is to be summoned accordingly to ascertain facts which today’s witness was unable to attest to.
13:22 | Debono asks how PwC could have possibly onboarded someone like Ram Tumuluri when it was already known at the time that his name was associated with fraudulent behaviour.
The witness does not answer the question directly but states that another individual within PwC was responsible for this process – Lucienne Pace Ross. It is likely that we will be hearing from Pace Ross on this matter if the defence decides to summon her to testify.
The witness further describes how besides Tumuluri, VGH had also introduced PWC to several American doctors and engineering experts who had lent their credibility to the pitch which was to be presented with PWC’s help.
Debono circles back to the witness’ earlier declaration about how PwC had failed to notice anything suspect about the deal.
“There were no red flags because the scope of the project had changed and the government had launched a public procurement process”, the witness insists.
13:18 | Michel Ganado is asked to explain the onboarding process that PwC uses when dealing with a client such as VGH.
Upon first contact from the potential client (Bluestone obo Ram Tumuluri), PwC goes through a basic Know Your Customer (KYC) procedure to manage risks associated with potential clients. Following preliminary conversations with Tumuluri and this KYC process, the witness claims that at the time this onboarding occurred, an engagement letter was issued and PwC accepted VGH as clients.
Ganado specifically states that VGH had passed through this test and that there was no indication that these investors were not quite what they said they were.
The witness explains how PwC were aware of the existence of an MoU between VGH and the government before a formal request for proposals was issued, and the witness believes that said MoU was a final version of the agreement. The witness is asked about who had paid PWC for the service provided to Bluestone Special Solutions, and the witness says that the invoice was sent to the same company.
Defence: “So you didn’t see anything wrong with this money? You accepted it.”
Ganado: “Yes, at the time, we did not have any reason to believe otherwise.”
13:12 | Facing questions from the defence, the witness details how PwC were approached for this project pitch. PwC had assisted Vitals with their project pitch, discussing the project’s details with former VGH frontman Ram Tumuluri.
It is pertinent to note that last week, the prosecution had informed the court that Tumuluri could not be served with summons as he could not be traced by Maltese authorities.
13:08 | The next witness, Michel Ganado representing PricewaterhouseCoopers (PwC), asks the court to exempt him from his confidentiality obligations towards his former clients (Projects Malta).
Magistrate Leonard Caruana asks the witness whether his clients released him from his obligations, and he replies in the negative. Both parties in the case and the court scratch their heads to figure out what the court can or cannot do in this instance.
Noting the witness’ statement about professional secrecy and citing the Professional Secrecy Act (Cap 377), the court formally releases the witness from his secrecy obligations given that the witness is not an auditor or lawyer but a digital services specialist.
13:04 | George Valencia takes the witness stand, however his testimony will be suspended until further notice, since the defence managed to establish the facts it sought to establish through previous testimonies.
Former CEO of Projects Malta Eman Schembri’s testimony is also suspended for the same reason.
12:53 | The defence now asks the witness to state how he came about to know about the project. Wait says that Projects Malta was specifically set up to cater for these kinds of projects. The defence asks the witness about whether Projects Malta became the contracting authority once it was set up, which the witness disagrees with wholeheartedly, arguing that Projects Malta had similarly acquired a public procurement function with other major public-private partnerships.
Wait insists that Projects Malta was only the administrator of the project and not the contracting authority.
Wait is asked about who was in charge of appointing individuals on the steering committee, and he states that permanent secretary Ronald Mizzi would pick who would represent Projects Malta on these committees. Wait is asked about whether he kept tabs on these meetings and whether his representatives would inform him of the outcome of these meetings, and the witness says this was not the case.
12:44 | Wait is now asked to explain why he had stated that David Galea had chaired the meetings of the steering committee, though minutes from the steering committee’s first meeting state that permanent secretary Ronald Mizzi had chaired that meeting.
Wait says he made a mistake in his earlier assertion and that the defence was correct to suggest that Mizzi had chaired that meeting.
The witness is asked to clarify whether Galea was the person who he would liaise with. Wait states that he was not directly involved with the day-to-day operations of the committees.
The defence also asks Wait to clarify who had approached David Galea from Projects Malta’s end, and the witness states that it is possible that he was not approached directly by Projects Malta but that it could be he was contacted directly by the ministry.
He does confirm that payment for Galea’s services would have gone through Projects Malta, as stated by Galea himself earlier today.
Quoting from the procès-verbal of the inquiry report, defence lawyer Franco Debono asks the witness about a reference to the inquiring magistrate’s assertion about Projects Malta and that the entity was not involved directly. Wait agrees with the inquiring magistrate’s assessment, and says that the entity’s role was to “support the project” and that “Projects Malta was not meant to take decisions about the deal”.
Wait adds that final decision-making about this concession was always issued through Konrad Mizzi’s ministry, subject to Cabinet’s final go ahead
12:35 | The defence on behalf of Deguara Advocates asks the next witness, William Wait, the former head of Projects Malta, about his involvement with Projects Malta, which began in April 2015 and ended in June 2017. Projects Malta’s involvement to the deal was to serve as the administrative entity that would manage the project.
Wait states that the RfP was already published by the time he had joined Projects Malta and that he had no direct relation with the management of the project, in spite of prior testimonies which suggested that Projects Malta was in fact in charge of the project.
Projects Malta’s responsibilities in relation to the project included management of the property assets linked with the concession. He states that Projects Malta would be represented on the committees which assessed bids and conducted the adjudication process. Projects Malta’s legal consultants on the deal were Ganado Advocates, Weightman, and Beat Ltd, the witness clarifies.
Defence: “Dr Bradley Gatt – does that name mean anything to you?”
Wait: “No.”
Defence: “Were you aware of who prepared the RfP from a legal perspective?”
Wait: “No.”
11:52 | We finally get a break! The sitting is suspended until 12:30. There are six individuals left on today’s list of witnesses.
11:47 | The defence is now asking Galea to inform the court about what the ‘pass mark’ criteria for the request for proposals was, how it was established, and who was responsible for determining it. Galea suggests he is not able to recall these details offhand and the court busies itself with retrieving the relevant note from the RfP.
The ‘pass mark’ was set at 65%.
The defence asks Galea further questions about the concerns which were previously flagged by Ganado Advocates, including by their representative who yesterday said that his team had faced pressure from Galea and RSM Malta Ltd (Labour Party’s auditors) to expedite the drafting process for the request for proposals, were addressed. The witness states that he believes those concerns had been addressed but does not go into further detail, nor is he asked to.
11:36 | Defence lawyer Stefano Filletti zeroes in on the “harsh criticism” which the NAO reserved for the committees in question, in particular about the almost total exclusion of the health ministry from the adjudication process.
Galea says that it is not true that the health ministrywas not consulted at this stage because under Konrad Mizzi’s tenure, the health and energy ministry were the same.
Magistrate Leonard Caruana: “Can you roughly quantify the input which you received from the health ministry?”
Galea: “The project is complex and it had many elements, many of which were not health-related…”
Magistrate: “That’s not the question.”
Galea: “Technical specifications came from someone technical, we focused on the commercial side from our end.”
The former CEOs of Karin Grech Hospital and Gozo General Hospital, Stephen Zammit and Nadine Delicata, are named as the individuals providing these technical specifications.
11:27 | Galea is asked about whether he testified anywhere else about this case, and he says that he was only asked to testify by the National Audit Office.
The defence repeats questions about how the witness was appointed, what the draft document consisted of and who it was drawn up for, and so on. He repeats his previous answers, so we’ll spare you from the boring repetition and try to bring you only additional information we’ve not yet referred to.
11:15 | The witness is asked about who had asked him to draw up the draft document which set out what a services concession agreement would look like, and he states that he had done so at the behest of Projects Malta. He also says that he had delivered a presentation about the draft document to all the relevant stakeholders of the project on behalf of Projects Malta.
Similar to the previous witness, Galea is unable to answer about who was involved in the steering committee and again insists that he was not chairing this committee and that there was no formal hierarchy involved.
The witness specifies how a firm named Weightman’s which was subcontracted to assist with the process of designing the specific parameters of the health services delivery agreement. Facing further questioning, Galea explains how this firm provided templates with which this agreement could be designed and adapted to this specific concession. He goes into detail about what this health services delivery agreement specified.
You can read more about this in greater detail by looking at The Critical Angle project’s data library entries about the hospitals concession.
11:02 | The witness fails to answer a direct question about who was meant to evaluate the fitness and probity of the bidder (whether it was supposed to be the steering or evaluation committee). He does not answer the question beyond stating that there were evaluation criteria to be adhered to and that was about it.
Franco Debono: “So the evaluation committee was tightly regulated by these evaluation criteria, correct?”
The witness prevaricates and says that they were considered as guidelines rather than as binding criteria.
Franco Debono: “So the bids should have been evaluated solely according to these criteria, no?”
The witness says that this process was only “superficial” and then clarifies that these criteria were in fact binding.
10:58 | Defence lawyer Franco Debono takes over questioning, asking whether Galea was responsible for setting up the terms of reference of the evaluation committee.
The witness says that he had submitted a draft document to that effect but that he cannot formally state that he was responsible for the evaluation committee’s terms of reference.
Overall, the tone of Galea’s testimony indicates that there was a deliberate dilution of responsibility throughout every committee that was in charge of the adjudication process for the hospitals concession.
Today, we heard two witnesses from these committees, and both outright refused to attribute any responsibility to themselves or even anyone else who was named on these committees.
10:50 | David Galea is asked about what kind of evaluation they carried out about the winning bidder and says he doesn’t know, in spite of the fact that he seems extremely well-prepared whenever he is asked questions about the details of the concession agreement and why the committees were set up in that manner. In another subsequent meeting, however, there is a reference to such evaluation being carried out about the complex offshore ownership structure behind VGH’s front companies.
When asked about this meeting, Galea’s memory seems to momentarily falter again, though he eventually does repeat his previous explanation about why the agreements were set up in this manner. He does not really answer the question about what kind of evaluation they carried out about the winning bidder, claiming he does not recall the exact details and that if his signature is on those minutes, then they must have discussed it at some point.
10:41 | The witness is asked about how many bidders were involved, and he (correctly) replies that he believes there were three bidders. He adds that he only dealt with the bid submitted by VGH directly, and he does not recall whether the steering committee had ever mentioned the other bidders.
Farrugia Sacco asks what the witness’ role was in the negotiation committee.
Witness: “I was involved but I cannot say who was officially chairing the committee.”
“Can you confirm you were chairing this committee?”
Witness, reluctantly: “Yes, yes, I used to chair the committee.”
10:38 | Galea is asked about various other details related to the deal, including minutes which referred to efforts from the committees to assess the bankability of the deal as well as how come it was decided that the deal would be subject to management and concession agreements.
The witness clarifies that the committees he was involved in had not eventually followed through with reaching out to banks to assess the financial viability of the deal, and is not able to give a reason as to why this was the case.
The witness states that the concession agreements referred to were divided into multiple aspects which determined the various areas of responsibility which the concessionaire would be obliged to bear, and that this was done with the view of streamlining the various work processes which the deal required (site preparation, bidder evaluation etc…)
10:29 | The defence asks the witness about who chaired this meeting.
Galea: “To my knowledge, though I am not 100% certain, I think was mainly chaired by Ronald Mizzi.”
Farrugia Sacco insists, arguing that “even a band club” would have detailed minutes of these meetings and would have a formal chair. Galea insists that there was no formal structure and that Mizzi would serve this role as the most senior government executive on the committee.
Facing further questioning, Galea states that he was involved in the drafting of the request for proposals but that it was largely handled through Ganado Advocates, as attested to by one of their representatives in yesterday’s hearing.
Galea adds that he had also provided his “input” in multiple aspects of the process without specifying what kind of input he is referring to exactly, including on the multiple committees which were appointed (steering, evaluation, and negotiation committee).
10:25 | The next witness is David Galea, Beat Ltd.
Lawyer Farrugia Sacco initiates questioning. The witness is asked about his role, and he says it mainly consisted of handling the negotiating process. The defence asks about who made up the steering committee, and he lists the various representatives who made up the committee, among them representatives of entities like Projects Malta and the health ministry.
He was appointed to his role on the steering committee via a letter of recommendation issued by Projects Malta. Galea refuses to directly answer what role he formally served on the steering committee when Farrugia Sacco asks him to specify. He would attend the committee on the strength of his letter of recommendation.
10:16 | After failing to answer most of the questions which the defence asked, magistrate Leonard Caruana asks the witness to state what his profession is.
Though the witness seems to have stumbled obliviously through all of the steering committee’s meetings, he nonetheless tells the court – with a straight face – that his area of specialisation is “business operational management and operational excellence”.
10:14 | Stefano Filletti takes over questioning (obo Ronald Mizzi). Micallef is asked about how he was paid for his services. He would invoice Beat Ltd directly. He is asked specifically about how Galea had appointed him and he is asked whether he was aware of the project’s details, and the witness states that he understood the basic premise of what the concession was meant to be and what the steering committee was meant to achieve.
Again, he is unable to recall any particular details about the details of what was discussed in the meetings as such, only that the committee’s general objective was to ensure the deal adhered to the conditions set out by the request for proposals. The defence asks whether the witness was aware that this concession was a result of a decision that was made by Cabinet collectively, and he says that he was not.
10:05 | Franco Debono takes over questioning. Micallef states that he works as a freelance advisor and he had participated in this steering committee at the behest of David Galea (Beat Ltd, chaired the committee, close friend of disgraced former tourism minister Konrad Mizzi). The witness says that he was not formally appointed to this committee through an appointment letter as far as he was aware.
He is asked whether he knows about how the other individuals on the committee were appointed. He says that the committee was already constituted by the time he was roped in to support it.
Micallef clarifies that Beat Ltd would subcontract his services regularly, including when his services were sought for the hospitals concession case.
10:02 | Lawyer Giannella de Marco takes over questioning – she refers to minutes of this steering committee from 2015.
Given that the witness is having difficulty recalling what happened in these meetings, he is handed a copy of the meeting minutes which he had drafted and signed off on himself. He confirms that the document is authentic and that he had attended these meetings.
“So you attended these meetings, you wrote down the minutes, and then circulated them,” de Marco states, “so can you have a look at these minutes and explain?”
The witness obliges, describing the annotations that he had used and further confirming that he had produced this document.
09:59 | Defence lawyer David Farrugia Sacco continues asking about the various stages of the project, which started with the request for proposals, then the bidding and evaluation process, and then eventually the selection of the final bidder. Farrugia Sacco may as well be asking Micallef to recall a past life – the results would be just as foggy.
09:56 | In 2015, the negotiation committee was meant to draft a set of service agreements which would be used as the basis for assessing the performance of the concessionaires. The defence asks Micallef whether he knows anything about this process and whether he remembers anything about this process, and he says that he does not recall the details. The witness seems to hardly recall anything about his involvement in the deal, in spite of the fact that there is arguably no other public-private deal in Malta’s history which was investigated this thoroughly.
09:49 | The next witness is Joseph Micallef, a former member of the steering committee on the hospitals concession.
Describing it as “a brief period of five months”, Micallef states that a handful of meetings were held during the time. Answering questions from the defence, he says he is not aware of who designed the request for proposals. He does not really remember who set up the terms of the request for proposals, and that “he cannot put a name behind (sic) it”.
Micallef is unable to answer most of the defence’s questions about his time as a member of the steering committee, insisting that he only served “a supporting role.” Another question he fails to answer is who would take the initiative to set up this committee’s meetings, or even who chaired it. The witness claims that they would coordinate these meetings informally, checking each individual committee members’ schedule and coordinating accordingly.
Asked about the terms of reference of the negotiation committee and whether he remembers anything about that, separately from the steering committee, Micallef says “I’d be lying if I said I didn’t come across those terms of reference at some point, though I can’t say I remember the details.”
09:45 | The first witness is Charles Deguara, auditor general of the NAO.
During yesterday’s hearing, defence lawyer Stephen Tonna Lowell had requested a document from the NAO. The document in question is correspondence between state advocate Chris Soler and the NAO. The auditor general submits the requested document to court, which is to be kept under seal. The prosecution suggests that since this correspondence refers to legal advice which the state advocate had given to the government, formal permission should be sought beforehand. There are no objections to this suggestion.
Tonna Lowell clarifies that Fearne himself had sought the legal advice in the email and that therefore, he is in a position to provide said permission. The court notes this down and admits the evidence as part of the acts of the case.
09:38 | Good Morning! We’re in session.
