Tista' taqra bil-Malti.
The corruption trial of disgraced former Prime Minister Joseph Muscat, his ex-chief of staff Keith Schembri, and former minister Konrad Mizzi resumed today before Magistrate Rachel Montebello.
The case, which centres around alleged graft involving the controversial Vitals hospitals concession awarded during Muscat’s tenure, has garnered significant public attention.
Josie Muscat, owner of Saint James Hospital, vehemently denied any involvement in a failed cancer treatment project spearheaded by Vitals Global Healthcare.
Josie Muscat clarified that he initially suggested setting up a cyclotron in Malta but asserted that he discussed this proposal with Malta Enterprise, not with Vitals or its shareholders. He emphasized that he never spoke to Vitals or its suspected secret shareholder, Shaukat Ali Chaudry, regarding the plans.
The former politician turned entrepreneur, whose Saint James Hospital group is the largest private healthcare provider in the country, was testifying in the case against Joseph Muscat, Keith Schembri, Konrad Mizzi, and others.
Prosecutors allege that Joseph Muscat and the other defendants took bribes, committed acts of fraud, and engaged in money laundering as part of the government’s project to award Vitals a 30-year deal to manage three state hospitals. Last year, a civil court annulled the deal on the basis of fraud. All defendants facing criminal charges deny any wrongdoing.
Wednesday’s court hearing primarily focused on testimonies related to the Cyclotron project. The project, which cost millions to set up, was eventually sold to Malta Enterprise for approximately €6.9 million after Vitals’ successor, Steward Healthcare, decided to abandon it.
Even years later, the equipment remains unused at the Life Sciences Park adjacent to Mater Dei Hospital, as confirmed under oath by a Malta Enterprise representative on Wednesday. Investigators working on a magisterial inquiry into the Vitals deal concluded that the company used taxpayer money to purchase the firm that owned the Cyclotron, which was later resold to Malta Enterprise.
Josie Muscat testified that the idea for the Cyclotron first arose in 2011 or 2012, but he withdrew from the project due to suspicions about an Italian investor involved. He recounted meeting the Italian investor during a trip to Israel with representatives from Malta Enterprise, clarifying that he had paid for his own passage and accommodation.
Former police inspector takes witness stand
The first witness, former police inspector Anthony Xerri, was cross-examined by the defence regarding his involvement in interrogating certain suspects, including auditor Christopher Spiteri. Xerri maintained that he was present for several of Spiteri’s questioning sessions, despite suggestions from the defence based on notes to the contrary.
Xerri revealed that the inquiring magistrate had verbally instructed him to search Spiteri’s residence after reviewing his testimony transcripts, leading Xerri to file for a search warrant. However, he stated that he did not analyse any seized files for potential professional privilege.
A Bank of Valletta representative presented account statements for Taumac Ltd, one of the companies involved in the case.
Officials from Malta Enterprise discussed the entity’s role in finalizing the cyclotron installation and the structural issues surrounding permits for the facility planned to produce cancer treatment products.
The prosecution attempted to connect additional witnesses via video link but faced technical difficulties. Other testimonies covered company name changes involving Kasco Foods/Sciacca Grill, Schembri’s past links, and Malta Enterprise’s engagement with an audit firm partly owned by a former Labour Party auditor.
With the day’s evidence concluded, the court indicated that it will hear submissions tomorrow from defence lawyers contesting the prima facie case against their clients. The prosecution will be allowed to immediately rebut these submissions.
A previous court session revealed the police did not investigate or question suspects before charges, potentially undermining the prosecution’s ability to shift the burden of proof in the alleged money laundering case.
Muscat, Schembri, Mizzi and their co-defendants face an array of serious charges including corruption, money laundering, fraud and bribery stemming from the Vitals deal privatisation.
In the previous court session, it emerged that the Police Commissioner instructed officers not to investigate or question the suspects before issuing charges. Instead, the police relied solely on the conclusions of the inquiring magistrate.
This approach has significant implications for the prosecution. In money laundering cases, unlike other criminal proceedings, the burden of proof shifts to the defendant, who must demonstrate that the money in question came from a legitimate source. However, for this “inversion of the burden of proof” to apply, suspects must first be given the opportunity to explain to the police how they acquired the funds. The court learned that the police did not conduct any investigation or questioning, potentially undermining the prosecution’s case.
Muscat, Mizzi, and Schembri face multiple charges, including: money laundering, fraud, conspiracy, accepting bribes and corruption in public office(Muscat and Mizzi), solicitation of bribes and abuse of office(Schembri).
Brian Tonna and Karl Cini of Nexia BT are charged with assisting Muscat in accepting bribes. David Joseph Meli, representing Steward Malta Management Ltd, faces charges of corrupting public officials. Other individuals, including Steward’s IT manager Clarence John Conger-Thompson and auditor Christopher Spiteri, are charged with various bribery-related offences and false declarations.
