Government in long legal battle to stop publication of agreement now ‘missing’

In correspondence with the National Audit Office (NAO) in the course of the investigation into the privatisation of three State hospitals, Malta Enterprise denied any ownership of a Memorandum of Understanding (MOU) – yet it had spent years battling against its disclosure in court.

In an additional twist, Prime Minister Robert Abela yesterday told reporters that after the publication of the NAO report last Wednesday he had “immediately” requested the MOU, “but I was informed that the document could not be found.”

The MOU between the companies behind Vitals Global Healthcare (VGH) and the government was signed six months before the Request for Proposals (RfP) for the hospitals’ privatisation was issued by the government.

“The relevance of this document is paramount,” the NAO report goes, adding that “despite the numerous requests made, very limited information and certainly no copy of the Agreement [MOU] was provided to the NAO.”

The Auditor General wrote that the “government’s reluctance” to turn over the MOU “casts the greatest shadow of doubt over the validity of the concession awarded by government, for in reality, all appears to have been pre-agreed and the procurement process undertaken was solely intended as a superficial exercise leading to an already determined outcome [to hand over the hospitals to VGH].”

After contacting various ministries to no avail, the NAO wrote to Malta Enterprise after ‘obtaining substantial information’ of its involvement. “The CEO Malta Enterprise,” wrote the Auditor General in his report, “outlined that the entity was not aware of this agreement and was therefore not a party to it, and neither possessed an original or copy, nor had access to it.”

The previous CEO was approached, who referred the Auditor General back to the present CEO, Kurt Farrugia, who until his appointment to Malta Enterprise a year ago served former Prime Minister Joseph Muscat as Head of Communications.

Journalists have found two MOUs. The second one, drawn up between the investors behind VGH and dated 23 November 2014, was revealed by The Shift two years ago after it was filed in a court case initiated by one of investors.

The first one – the one that’s gone ‘missing’ – was signed six weeks earlier between the government and investors behind VGH. The Sunday Times had reported that former Economy Minister Chris Cardona, then responsible for Malta Enterprise, had been the signatory for the government.

The latest probe by The Shift after the publication of this week’s NAO report shows that Malta Enterprise – whose CEO told the Auditor General that the agency was “not a party to it [the MOU]” – spent three years battling a Freedom of Information request for disclosure of the MOU signed between the government and investors.

The three-year legal saga ended in the Court of Appeal nine months ago, where Judge Joanne Vella Cuschieri agreed with a lower Tribunal that the MOU “no longer had any validity between the parties” because the agreement had been superseded by a contract that is in the public domain.

The implication was that the media could (or had to) work with the published contract – odd reasoning according to justice experts consulted by The Shift given that the request was precisely for the MOU so that it could be examined in its own right, as well as to compare with the contract.

The contract tabled in parliament in October 2016, in fact, had around a fifth of it redacted. Interest in the MOU was predicated on the understanding that it would provide substance and insight into the “proof of collusion” between VGH and the government for a “predetermined outcome” – as the NAO has now put it – and that the call for proposals and the evaluation process had been just a charade.

The legal battle for the MOU had been initiated by The Times’ journalist Jacob Borg, a month after the redacted contract was tabled in parliament. Borg’s Freedom of Information request was rejected twice on the basis of confidentiality or secrecy of any discussions and documents in the course of negotiations imposed on Malta Enterprise officials by the Business Promotion Act and Malta Enterprise Act.

The Information and Data Protection Commissioner (IDPC) then got involved, requesting the MOU so that he could make an appraisal of Malta Enterprise’s refusal to comply with the Freedom of Information request.

Malta Enterprise challenged the IDPC’s request in front of the Information and Data Protection Appeals Tribunal, where the agency’s CEO, Mario Galea, testified that he had referred Borg to the hospitals’ privatisation contracts that had been concluded.

The Tribunal vindicated Malta Enterprise’s noncompliance, and this led the IDPC and The Times to appeal.

They argued that provisions in the Freedom of Information Act should take precedence over confidentiality provisions in the two other laws, emphasising the public interest element of these agreements into the privatisation of State hospitals using taxpayer money.

Yet Judge Vella Cuschieri dismissed the pleadings and reaffirmed the Tribunal’s decision. She was newly appointed after five years serving as a magistrate, a role she had been appointed to a year after unsuccessfully standing for the Labour Party in the 2013 election.

She made another judgment on the same day – 11 October 2019 – that went against the media. In that case, a libel sentence in favour of Keith Schembri was reaffirmed, partly on the basis of wrong interpretation of evidence in the testimony of a key witness.

In the MOU case, the judgment expanded on the Tribunal’s sentence, at one point stating that it was “legally obvious” that the MOU had lost its validity and that it was the contract that mattered. Justice sources told The Shift that this legal obviousness takes no heed of the potentially larger conflict with the supreme principle of freedom of expression.

The strong public interest was incontrovertible in the case, and that made the confidentiality provisions in laws governing Malta Enterprise in conflict with the Constitution.

Such conflicts may be referred to the Constitutional Court for its guidance, as provided in Article 46 (3) of the Constitution, either at the request of the litigating parties or at the initiative and discretion of the presiding judge. In this case, no request was made by any of the parties, and the judge didn’t refer it to the Constitutional Court.

Neither the IDPC nor The Times appealed Judge Vella Cuschieri’s judgment.

Nine months later, Malta Enterprise is now denying having had any access to the MOU, and Prime Minister said yesterday that the MOU “could not be found”.


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