Keith Schembri downplays his role in Electrogas project during PAC grilling

In a rare public appearance, the chief of staff of disgraced former prime minister Joseph Muscat, Keith Schembri, testified in parliament’s Public Accounts Committee (PAC), where he repeatedly downplayed the extent of his knowledge and involvement in the controversial energy project.

While Schembri was chief of staff, the Labour government implemented a number of major projects that remain mired in scandal and corruption allegations. These include the Vitals/Steward hospitals deal, the Montenegro wind farm, and the Electrogas project.

Shortly after presenting himself and his role in Muscat’s government to the committee, Schembri started by saying that as soon as the Labour Party was elected to govern, his responsibility was to ensure the implementation of commitments made in the electoral manifesto. Reducing entry tariffs was one of the Party’s main promises.

However, when Opposition members of the PAC pressed Schembri to divulge the names of those involved in Labour’s pre-electoral decision to go for a gas power station, Schembri said, “It’s been a long time”.

One of the PAC’s major points of inquiry over the past two legislatures has been a damning investigation into Electrogas by the National Audit Office (NAO). The report highlighted “various shortcomings” and described major, often undocumented, flaws in the selection and evaluation process.

The report referred to the “inconsistent approach” adopted by the evaluation committee in its assessment of submissions, with the final assessment of competing bids overseen by Brian Tonna, the managing partner of the firm that set up the companies exposed in the Panama Papers belonging to Schembri and then-energy minister Konrad Mizzi.

During his testimony in the PAC, Schembri insisted that apart from four Cabinet meetings, he only attended one meeting with Enemalta representatives, instead of the energy minister and permanent secretary, on the gas plant project. He said he was there only to follow the proceedings.

Schembri also repeatedly denied having had any information related to the Electrogas tender and denied having had any influence on the selection of the winning bidder.

During the questioning, he also denied knowing who the winning bidders were before their official announcement.

He also denied having spoken to any of the Electrogas shareholders during the tendering process, including SOCAR, Siemens, Gasol, Mark Gasan, Paul Apap Bologna, Yorgen Fenech and Ray Fenech.

“I have known Yorgen since the age of nine, but I only resumed contact with him after the Electrogas tender. During the tendering process, none of them spoke to me. Never.”

Yet Schembri let slip that the late George Fenech (father of Yorgen Fenech) “never wanted the power station anyway”.

When Opposition MP Graham Bencini reminded him that he had just said he never spoke with Electrogas shareholders about the power station, Schembri backtracked.

“Oh, we spoke about many things…it doesn’t mean anything. We were talking about reducing tariffs. Of course, that would come up in conversation,” Schembri then replied.

When Schembri was asked whether he had any say in Electrogas’ issue with pending excise duties, Schembri replied that this issue would have been then-finance minister Edward Scicluna’s remit. However, the PAC noted that Scicluna had told them that he did not get involved in that issue, to which Schembri replied that he didn’t know who did.

When questions turned to his offshore companies, Schembri said, “I had so many offshore companies,” adding that he opened the Panama offshore company after details of his BOV-held Trust were leaked to the PN and therefore wanted to move his assets.

Keith Schembri and Konrad Mizzi had opened offshore companies to allegedly receive €5,000 a day in kickbacks from a Dubai-based company 17 Black, owned by former Electrogas chief and the alleged mastermind behind journalist Daphne Caruana Galizia’s assassination, Yorgen Fenech.

Schembri denied that 17 Black had to pass on payments to his Panama companies on business projects. “The business was meant to start after my exit from politics. I knew it was Yorgen Fenech’s company,” he told the PAC.

At one point during the session, Schembri complained about the line of questioning by the PAC, saying the press minutely scrutinises his business and his affairs are publicised widely when he tenders for government contracts.

Nevertheless, Schembri’s companies are still receiving direct orders from the government.

Schembri was the subject of three magisterial inquiries and those concluded have led to arraignments and charges linked with financial crime. The cases are still ongoing.

Schembri and Mizzi have also been barred entry to the US on orders of the Secretary of State. A statement by the US State Department refers to “credible information that Mizzi and Schembri were involved in a corrupt scheme that entailed the award of a government contract for the construction of a power plant and related services in exchange for kickbacks and bribes” – a reference to what could only be the Electrogas project.

Schembri was assisted by lawyers Edward Gatt and Mark Vassallo. The PAC hearing has been adjourned and will resume on 18 April.