SVDP scandal: Top civil servants shun responsibility as PL, PN take no action

Top civil servants who pushed through the illegal 2017 quarter-billion-euro direct order to DB Group and James Caterers are denying any responsibility for the flawed deal, despite the National Audit Office’s clear conclusions that they failed to carry out their duty.

Mark Musu – the Permanent Secretary at the Ministry for Family Affairs who signed off on the irregularities in the public procurement process – shrugged off emailed questions about whether he accepts accountability for the gross failures highlighted by the NAO with a reference to the government’s official statement. He added that he considers the NAO’s reference to him “unfair”.

Josianne Cutajar, the politically appointed CEO of the St Vincent de Paul facility (SVDP) also singled out by the NAO, was even less forthcoming. She has ignored questions emailed to her a week ago and appears to be attempting to ride out the scandal with a business-as-usual stance, despite the serious implications around her involvement in the deal.

The NAO was unequivocal in its conclusions about the role played by Musu and Cutajar in the “illegal” award of the direct order.

Specifically, the NAO concluded that Musu “did not provide adequate direction, with the input provided solely serving to endorse a procurement process that was flawed and in breach of legislative provisions”.

Asked to state whether, in view of these damning conclusions, he has offered his resignation, Musu chose not to reply. Instead, the former One TV newscaster – who was appointed Permanent Secretary in 2013 – criticised the NAO for singling him out.

“From a personal point of view, I consider the NAO inference as unwarranted and unfair.  Other parts in the same report actually contradict such conclusion,” Musu told The Shift.

Cutajar, the CEO of St Vincent de Paul who has been linked to other ‘dubious’ multi-million-euro direct orders issued by the State-run residence for the elderly, was identified by the NAO as the pivotal civil servant driving the DB/James Caterers deal.

Despite this, Cutajar has retained her position and appears to be determined to avoid any responsibility for the waste of tens of millions of euros of taxpayers’ money.

The Shift asked Cutajar whether she has discussed her position with Minister for Senior Citizens and Active Ageing Michael Farrugia and if she will be stepping down. She did not reply to any of the questions put to her.

According to the NAO, Cutajar negotiated directly with the consortium and agreed to assign the multi-million direct order to the DB Group and James Caterers without seeking authorisation from the Finance Ministry.

In addition, Cutajar only sought to determine the costs of this mega-direct order after she had already committed the government to award it to the consortium, having failed to take into consideration market rates or potential competition.

The Audit Office’s report concluded that the rates eventually agreed with the consortium, some €22 million a year for the next 15 years, were inflated and flawed.

The Shift is informed that so far, Cutajar has not been asked to resign.

No action despite confirmed irregular contract

To date, the government has not committed itself to rescind the illegally granted contract, even though, according to the NAO, taxpayers will be forking out millions in irregular, extra payments every year.

While the NAO investigation made it clear that all procurement rules were breached and that the direct order was illegal, Prime Minister Robert Abela’s response has been muted and he’s refused to pledge any action to cancel the contract.

Employing his stock reply in times of difficulty, that “the government was studying the report,” Abela has failed to take any mitigating measures, which means that DB Group and James Caterers continue to be paid a staggering €60,000 a day.

The PN Opposition has also appeared reluctant to pile pressure on the government over the scandal. In its reaction to the damning NAO report, the PN called only for political responsibility to be shouldered, through the resignation of the Labour politicians involved but failed to demand the cancellation of the contract.

This is unusual: in the past, the PN has acted decisively in pressuring the government to cancel illegalities found by the NAO, including through the presentation of motions of censure in Parliament and court action.

Nothing of the sort has been announced this time.

Political parties compromised?

Industry sources insist the reluctance of both the Government and Opposition to take action in this case is a clear sign of how deeply compromised the Parties are through their acceptance of significant, regular donations, in cash and in kind, from companies involving Silvio Debono and James Barbara.

Labour and PN Party sources confirmed that the two companies involved are habitual donors, who provide ‘assistance’ to many politicians in both camps, including sitting members of parliament.

The sources also pointed out that PN Secretary General Francis Zammit Dimech served on DB Group’s board of directors for many years, while Mario De Marco’s legal firm represented the same company’s interests in multiple deals, including the controversial 2017 sale of the former ITS site to DB Group at well below market value.

So far, both the PL and the PN have refused to reply to questions by The Shift on whether they will be taking any action to halt the illegal contract.

On top of the €274 million direct order, DB Group and James Caterers were also awarded a further €60 million contract to provide meals at the St Vincent de Paul Residence for the next 10 years. This add-on deal is renewable for an additional five years, which would mean the consortium could rake in at least €30 million more.