2019 was another significant year of investigative work for The Shift team. Throughout this year, we delved deeper into some important investigations which we kicked off back in 2018, namely the VGH and Steward Healthcare agreement and the ongoing White Flag saga. We closely analysed the asset declarations of cabinet ministers, and investigated just how much Nexia BT is gaining from the government. We also formed part of a cross-border investigation into a Europe-wide racket, responsible for robbing European taxpayers of some €50 billion per annum.
Cover Your Assets: Investigation cabinet ministers’ asset declarations
An investigation by The Shift News into the asset declarations of cabinet ministers over the last seven years brought to light disturbing results on a number of breaches, unexplained peaks and loans that defy the declared incomes.
Economy Minister Chris Cardona set the example on ignoring regulations by being involved in at least two companies in breach of the MFSA laws, one of which is owned by the Labour Party.
The Shift’s investigation also found a large discrepancy between the earnings and declaration of Parliamentary Secretary Silvio Schembri, where he earned twice his income declared to parliament in 2017. Meanwhile, Finance Minister Edward Scicluna’s net wealth increased by around €60,000 to €70,000 per year – an amount equal to Prime Minister Joseph Muscat’s unchanging bank balance in his asset declarations.
Ministers and Parliamentary Secretaries did not table their asset declarations for 2016 (the year of the Panama Papers revelations).
Our analysis also showed that all cabinet ministers have seen a steady increase in income and net wealth since 2013, except former minister Konrad Mizzi, who had declared that these dropped steadily since 2014, despite his involvement in major corruption scandals.
Read more here.
White Flag – continued
In 2018, we revealed that the placement of a “White Flag” on a beach is meant to denote a ‘plastic free’ beach, but questions had been raised whether it was an elaborate scam. Sources that sponsored White Flag beaches told The Shift News that they paid EUR 25,000 to sponsor a beach with seven Maltese and Gozitan beaches receiving the award so far, despite them being far from plastic free.
Environment Minister Jose Herrera raising the White Flag although a cleanup never occurred on site.
Payments go straight into an account in Zagreb, Croatia, while in Malta complaints increase about the lack of maintenance of the White Flag conditions. Some of these flags were sponsored by ministries using taxpayers’ money, while others were backed by private sponsorship, mostly from igaming companies.
In 2019, a freedom of information request filed by The Shift revealed a €29,000 price tag for the White Flag in Gozo, a different price to what Gozo Minister Justyne Caruana told parliament on 16 January when she had tabled costs totalling €7,776 for two White Flags on the island’s beaches. The disparity between the two sums remains unexplained.
Meanwhile, a Freedom of Information request filed on the communication between Environment Minister Jose Herrera and the representatives of the White Flag scheme was rejected on the grounds that “a search through a large number of documents would be required”. Following The Shift’s reports, igaming companies based in Malta who had sponsored the scheme voiced plans to sue White Flag and recover the money, and asked the government to join them. However, the government said that they will not be joining the legal case.
Read more here.
The VGH and Steward Healthcare agreement – continued
The agreement signed between Steward Healthcare and Vitals Global Healthcare, which transferred the concession of three of Malta’s public hospitals, has so far been hidden from public view. Over the past two years, The Shift News has revealed its contents in a series explaining what the agreement tells us about the controversial deal and its hidden owners.
Continuing on the revelations from last year, in 2019, The Shift News divulged the hidden key investor in Vitals Global Healthcare – Shaukat Ali Abdul Ghafoor. Over the year, The Shift followed his dealings in the healthcare sector in other countries. Our investigations found that Shaukat Ali Abdul Ghafoor is still negotiating with other governments in Eastern Europe, using the Malta bid to win new contracts even though the consortium failed to deliver in Malta.
In more recent developments, our investigation into the companies found that the model for the privatisation of Malta’s public hospitals, negotiated by Konrad Mizzi and Keith Schembri with the approval of Joseph Muscat, was exported to Balkan States with weak democratic structures, that enable large-scale corruption.
The Head of Steward Healthcare in Malta, Armin Ernst, was witnessed pitching the deal both for VGH and Steward. Rather than Steward Healthcare being “the real deal”, as quoted by Health Minister Chris Fearne, the plans of VGH and Steward in different countries seem to coincide perfectly. Was this by design?
Read more here.
Gordon Debono
Gordon Debono is one of the individuals facing charges for fuel smuggling from Libya to Italy. His assets have been frozen and held in Maltese banks. However, Debono and his wife Yvette Debono had devised a way of getting their hands on their assets as she acquired a shell company in Dubai called International Properties and Investments Ltd in March 2018.
Yvette and Gordon Debono. Photo: Facebook.
Further investigation of court records showed that a Belize company that Yvette Debono claimed owed it money was owned and controlled by her husband. This effectively means that husband and wife were transferring assets through offshore companies that they had no legal right to access, with the approval of the Maltese courts.
The investigation also revealed that the lawyers involved in the case, Maltese lawyer Robert Montalto and Cypriot lawyer Ionnis Moditis, each got €60,000 for their services.
Read more here.
Grand Theft Europe
Maltese companies were found to have been involved in a Europe-wide racket responsible for robbing European taxpayers of some €50 billion every year.
In a cross-border joint investigation involving The Shift News, some 300,000 pages of tax and security investigations provided indisputable evidence that companies incorporated in Malta were being set up with the sole intention of facilitating VAT carousel fraud. These companies allowed criminals to steal taxpayers’ money from other EU states, creating a black hole worth billions, that is used to finance the mafia, terrorism and other illicit activity.
Read more here.
Over €2 million in direct orders to Nexia BT
More than €2.4 million in government contracts were awarded to Nexia BT, the firm which set up the Panama companies for the Prime Minister’s close aides, either directly or through its owner Brian Tonna. Of these, 85% were direct orders worth €2 million.
Prime Minister Joseph Muscat officially inaugurated Brian Tonna’s (left) Nexia BT offices in June 2013. Photo: DOI / Omar Camilleri
The analysis by The Shift News shows that, between 2013 and 2017, the contracts awarded to Tonna, his company Nexia BT and its subsidiaries total €2.4 million and cover a broad range of services supplied to government, from advising the Prime Minister to consulting on public toilets.
That being said, the information provided to The Shift News did not portray the complete picture of how much Nexia BT was awarded, as one of its main clients, Konrad Mizzi’s Projects Malta – refused to disclose contracts.
Read more here.