NAO report shows ‘usual suspects’ involved in hospitals’ scandal

Disgraced former Minister Konrad Mizzi’s ‘friends’, consultant David Galea, lawyer Aron Mifsud Bonnici and Permanent Secretary Ronald Mizzi, once again feature prominently in the latest NAO investigation on the hospitals’ deal through which three public hospitals were passed on to Vitals Global Healthcare, now a defunct company taken over by Steward Health Care.

An analysis of the report by the Auditor General’s Office shows Galea, CEO of Beat Ltd, Mifsud Bonnici, who also represents the disgraced Minister in various personal lawsuits, and Permanent Secretary Ronald Mizzi were placed in key strategic positions during the concession and negotiations process leading to the tainted project.

The same people were already outed by the NAO in other recent damning investigations related to the disgraced former Minister who has since been kicked out of the Labour Party.

The ‘trio’ was mentioned by the NAO as playing key roles in the Electrogas deal and the transfer of the ITS site given to Silvio Debono’s DB group in questionable circumstances.

Investigations by The Shift show Galea and Mifsud Bonnici were also involved in the corrupt Montenegro deal, with Ronald Mizzi travelling with Konrad Mizzi to the country in relation to the deal.

Montenegrin government press photos show Konrad Mizzi accompanied by his lawyer, Aron Mifsud Bonnici, and Permanent Secretary Ronald Mizzi on 11 November, 2015.

The NAO on the hospitals’ deal published on Tuesday, states that Galea, Mifsud Bonnici and Ronald Mizzi were appointed by the Minister to a steering committee overseeing the whole VGH process from tendering to negotiations and project management.

Galea – a childhood friend of Konrad Mizzi who received a number of direct orders costing taxpayers more than €1 million – was tasked with drawing up a feasibility study on the project. He was also put on both the Steering Committee of the project, headed by the Minister and on the Contracts Management and Negotiating Team.

The Steering Committee also included the Minister’s personal lawyer – Mifsud Bonnici, the Permanent Secretary, the Executive Chairman of Projects Malta and its Chief Operations Officer, and an unnamed director of Innovative Architectural Structures and a partner at auditing firm RSM –  the same firm that audits the Labour Party.

At the time, Mifsud Bonnici was also a director of Projects Malta, set up by Konrad Mizzi to lead the controversial deals with the private sector including the power station and the DB Group project.

Aron Mifsud Bonnici.

Aron Mifsud Bonnici.

Referring to the feasibility study drawn up by Galea as the only such report on this concession, despite its complexity and unprecedented nature, the NAO cast serious doubts on the “integrity” of the information provided by the Permanent Secretary.

According to the NAO, the report had no date and there were no letters of appointment regarding its commissioning: “According to the Permanent Secretary (Ronald Mizzi), this analysis was carried out early in 2015. The NAO sought to verify this through the review of correspondence exchanged between the team of experts and the Ministry; however, this was not possible as the requested correspondence was not made available”.

The NAO also describes the Permanent Secretary’s replies as “ambiguous” as he insisted that the commissioning of this report was done verbally.

“The NAO was not provided with any documentation evidencing when the team of experts were convened or when they reported to the Ministry, casting doubt on the integrity of information provided to this office.”

Galea is also mentioned prominently in the handling of other key decisions including the presentation of a ‘project initiation document’ and the proposal of the appointment of the negotiations committee to deal with VGH.

David Galea and Ronald Mizzi

David Galea (left) and Ronald Mizzi (right).

The latter also included Mario Vella – at the time the CEO of Malta Enterprise – who had also entered into a separate agreement with Barts for the provision of facilities, financed by the government – to set up a medical school in Gozo.

According to investigations carried by The Shift, Galea, who set up Beat Consulting together with Philip Tabone, father of Malta’s consul to Dubai, Anthony Tabone, was given more than 35 lucrative direct orders since the Labour Party’s return to power in 2013.

One of the more recent tasks assigned to him was to review a report submitted by the NAO on the Electrogas deal. David Galea himself was involved in the whole process acting on behalf of Konrad Mizzi.

Lawyer Mifsud Bonnici‘s name is also associated with Konrad Mizzi. Apart from acting as his defence lawyer whenever the former Minister is called to court, he was put in key positions at companies under the former Minister’s responsibility, including Arms Ltd, Engineering Resources Ltd, Enemalta, Projects Malta and other energy related companies involved in the Montenegro wind farm project.

He frequently accompanied the former Minister on trips abroad, including various visits to Montenegro. His wife, Katrina Borg Cardona, who is also a lawyer, was given other government directorships including at Air Malta and was appointed Board Secretary at the Selmun Palace Hotel Co Ltd, the Grand Harbour Regeneration Corporation, Malta Industrial Parks. She also served as a consultant at Malta Enterprise.

Ronald Mizzi – currently the Permanent Secretary at the Tourism Ministry – has been a permanent feature wherever the former Minister was involved.

Appointed permanent secretary at the young age of 31, as an inexperienced civil servant from Zabbar, he has been at the helm of the former Minister’s portfolios until the latter’s forced resignation, including the time when Konrad Mizzi was supposedly stripped of his portfolio for a short while after his outing in the Panama Papers.

Ronald Mizzi was also appointed on the Board of Directors of Air Malta when Konrad Mizzi took over the Tourism Ministry.

Despite his record, Ronald Mizzi is still occupying the post of Permanent Secretary at the Tourism Ministry, now led by Julia Farrugia Portelli.

In its audit, the NAO slammed the deal between the government and VGH, concluding that the latter should have been excluded from the bidding process because of “collusive behaviour” between the government and the company.

Through this concession, now taken over by Steward Health Care for the price of €1, the government committed itself to forking out €2 billion over 30 years. None of the obligations in the contract, including investment in modern facilities have been achieved on time.

Still, the government has not yet rescinded the concession and disgraced former Prime Minister Joseph Muscat involved himself in a meeting with the new prime minister to put forward Steward Health Care’s demand for a revision of the contract, even after the company failed to deliver on its commitments.

                           
                               

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