Former OPM chief of staff Keith Schembri was well aware of the misappropriation of taxpayer funds in relation to the hospitals deal but did nothing to stop it, instead prioritising personal profit through his involvement, the inquiry on the deal concluded.

The inquiry details Schembri’s control at every stage of the deal. “His position within the government from 2013 as Chief of Staff to Prime Minister Joseph Muscat placed him in a prime position to manipulate events in relation to the Healthcare Concession.”

The inquiry adds that “this seems particularly significant as we have found that Schembri was not only central to the whole scheme from its inception but that his orchestration and endorsement of it seems to have been essential to getting the PPP off the ground and then awarded to the consortium (including Shaukat Ali) behind Vitals Global Healthcare (VGH).”

The inquiry report details Schembri’s close relationship with Shaukat Ali, the Pakistani at the centre of the deal who, the report shows, took millions from the concession. It states, “Where you find Shaukat Ali,  you also find Keith Schembri.”

“We found that the close relationship between Keith Schembri and the Shaukat Ali family, was pivotal to the success of the concession movement and that the actions of each party have the hallmarks of corrupt practice and manipulation to achieve it,” the inquiry found.

The Shift has already reported on the millions Shaukat Ali and his family members received from taxpayer money intended for the hospitals’ concession that went into his account and those of his children and his two wives.

“Shaukat himself has a lengthy track record of corrupt involvement with top government officials – His family were involved at the highest levels of Colonel Gaddafi’s notoriously corrupt regime in Libya. His involvement and ownership were then concealed but later rewarded by the payment of huge success and other fees triggered by the orchestrated award of the concession to VGH,” the inquiry report states.

It adds: “Schembri and Shaukat were not only close business partners well before the concession but operated in a relationship of such mutual trust and co-operation that Shaukat was privy to Schembri’s personal financial affairs and bank accounts and was a prime mover in assisting Schembri to secretly set up Dubai companies and bank accounts.”

Virtually all of the key players either reported to Schembri or sought his endorsement of most of the key matters that shaped the concession and the misappropriations of funds that accompanied it, the inquiry concluded.

“The police in Malta are aware, and we are aware, that Keith Schembri has a long track record of nefarious deals which he went to considerable lengths to keep secret.”

The inquiry also notes that following the signing of the Memorandum of Understanding, Schembri was immediately aware of very damning negative information regarding the credibility and financial standing of many in the investor group.

“As an officer of the Government of Malta, it would surely have been incumbent upon him to act on this information and it is significant that he appears instead to have ignored it.”

He ignored it for his own benefit at the cost of the public interest on a healthcare deal: “Both his and Shaukat’s long track record of sophisticated concealment of nefarious commercial arrangements strongly suggests that their modus operandi would have required Schembri to have had a structured share of the spoils.”

The inquiry stresses that the primary aim of all key players (in both the VGH and Steward eras) was not to operate the hospitals’ concession but to sell it as soon as possible, probably packaged with hospitals in other territories, for multi-million-euro capital gain.

The Shift reported in 2019 that rather than focusing on delivering on the concession over three public hospitals in Malta, VGH’s priorities were to milk the concession and expand to other countries at Maltese taxpayers’ expense.

The inquiry found that Schembri was profiting from every possible aspect.

In August 2015, just after the hospital concession was awarded, four companies were incorporated in Dubai.

The inquiry notes that Keith Schembri, Joseph Muscat, and Konrad Mizzi were in Dubai in early February 2016 and that Joseph Muscat travelled again to Dubai in late March 2016.

Schembri set up several other companies that indirectly benefitted from the deal. The inquiry also found fronts, such as former Allied Newspapers Managing Director Adrian Hillman, on companies purchased that would lead to profits, such as Technoline.

“Ninety per cent of the shares (in Technoline) were planned to be held by four individuals identified as ‘AH’ (Adrian Hillman), ‘PS’ (Pierre Sladden), and two individuals identified only as K & K’. From the accumulation of evidence… we conclude ‘K & K’ to be Keith (Schembri) and Konrad (Mizzi),” the inquiry states on Technoline.

“They were to acquire 100% of Technoline using Government of Malta funds fraudulently channelled from the VGH concession.”

Acting as his proxy, Adrian Hillman would provide sensitive details on the progress towards the purchase to Schembri, who would then share these with Mizzi and Shaukat Ali.

The project went ahead with €5 million being advanced from taxpayer funds in an arrangement involving one of the Jersey companies set up by Shaukat and Ram Tumuluri. This was revealed by The Shift in January 2019.

Schembri and Konrad Mizzi, whom the inquiry defines as his sidekick, also benefitted in other ways. Taxpayers funded their online reputation management. In late 2017, VGH was invoiced $9,000 on behalf of not only VGH but also Schembri and Mizzi by Pakistani-based Itech, which had been introduced to Schembri by Shaukat Ali’s son.  The engagement appears to have run for around 11 months.

Keith Schembri’s companies, Kasco Foods Ltd and Kasco Engineering Ltd, gained lucrative contracts to supply goods and services to the catering companies supplying the Concession and other Hospitals (James Caterers and its subsidiary Malta HealthCare Caterers Ltd)

VGH / Wajid Ali also entered into an arrangement regarding a property owned by Mr Schembri’s company FSV Limited. Between November 2018 and December 2019, FSV was paid €36,000 by Steward Malta Management Ltd. Earlier payments were made from Bluestone Investments Malta Limited to another company connected to Schembri called 3City Designs Limited, owned by Keith Schembri’s wife (now separated), who is also facing criminal charges.

Meanwhile, the inquiry also found that Schembri was influencing the selection of hospital board members who might be supportive of their oversight and views and, ultimately, his own profits.