Aqra bil-Malti

At a Glance:

• Keith Schembri testified under oath that he was unaware key players in the hospitals scandal had negotiated for shares in Electrogas, the energy deal.
• Previously unpublished messages reveal a different story.
• Schembri wasn’t just kept informed of negotiations. He was actively involved in them. The fake email address he used also reveals startling parallels between the hospitals deal and Electrogas.
  

Schembri was questioned in March 2023 by Public Accounts Committee chairman Darren Carabott as part of the parliamentary probe into the Electrogas deal.

“Did you know Yorgen Fenech approached [Ram Tumuluri and Mark Pawley] about the sale of Gasol’s shares [in the Electrogas consortium]?” Carabott asked.

Schembri said, “No.”

“Did you know about active negotiations by Yorgen Fenech with these two individuals [to buy these shares]?”

“What? No.”

Carabott asked a final time, “And you were never made aware of these negotiations, right?” “No, never,” Schembri replied.

Lying under oath is perjury, a serious crime punishable with imprisonment.

Previously unpublished email exchanges seen by The Shift reveal that contrary to his sworn testimony, Schembri was kept aware of the negotiations through a covert communication channel with Yorgen Fenech, Ram Tumuluri and Gasol plc.

‘Frank Pillow’, Schembri’s alias for shady activity

Investigators probing the hospitals concession concluded that Keith Schembri routinely used a fake email address under the alias ‘Frank Pillow’ to keep covert tabs on sensitive discussions about the deal.

Schembri used this fake email in private correspondence with disgraced former minister Konrad Mizzi (who was using his personal Hotmail address), Ram Tumuluri, and others in a way that investigators said suggested “they were privately assisting Bluestone / Vitals in a manner that was separate but parallel” with their government roles.

This included Mizzi and Schembri secretly guiding Tumuluri in negotiations with the government in ways that ran counter to their duties as government officials.

This new email correspondence seen by The Shift reveals that Schembri also used his ‘Frank Pillow’ email address to keep tabs on eleventh-hour negotiations regarding the sale of Gasol’s shares in the Electrogas LNG power-station concession.

Winning Electrogas consortium leader Gasol faced insolvency in early 2015 when the ink on the Electrogas contract was still wet. Gasol had to sell off its shareholding quickly or risk prejudicing the entire concession.

The other consortium members were GEM / ‘Greener Energy for Malta’ (comprising Yorgen Fenech’s family business the Tumas Group, plus the Gasan Group and Paul Apap Bologna’s CP Holdings), the State Oil Company of Azerbaijan Republic (Socar), and Siemens.

The government and Enemalta were formally notified Gasol was selling out in late July 2015 but Schembri’s ‘Frank Pillow’ email address was receiving updates from Yorgen Fenech at least a month earlier.

An email from Yorgen to ‘Frank Pillow’ said “Replies in red next to the points below.” The replies were the reactions of Fenech, GEM, and Gasol to confidential advice provided by DF Advocates to Ram Tumuluri relating to negotiations with GEM and Gasol over shares in Electrogas.

Email exchanges seen by the Shift show that Keith Schembri, through his “Frank Pillow” fake email, was aware of negotiations relating to the sale of Gasol’s shares in Electrogas.

It is unclear whether it was Schembri or Tumuluri who forwarded this email to Yorgen Fenech, but Fenech was providing the consortium’s comments on that confidential advice to Schembri who was disgraced former prime minister Joseph Muscat’s chief of staff at the time.

The negotiations Schembri was being kept informed of related to the proposed purchase of all of Gasol’s shares in Electrogas through an offshore company owned on paper by the same people involved in the “fraudulent” hospitals concession that the court has since annulled.

It reveals yet another corner of the tangled web between those in government who are repeatedly involved in deals not in the public interest and the enablers they worked with.

The Shift has independently confirmed that the Yahoo email address in the name of ‘Frank Pillow’ is linked to Keith Schembri’s mobile number.

Electrogas and Vitals: Parallel roads

Hospital investigators noted that Konrad Mizzi made sure his ministry’s energy team handled the hospitals concession rather than his newly absorbed health department so that he had the ‘right’ people in place.

“In our opinion, those ‘right’ people had already been used by Dr Mizzi and Mr Schembri in a similar suspect ‘concession’ in the provision of energy for Malta at the taxpayers’ expense,” the investigators working on the magisterial inquiry into the hospitals deal concluded.

The ‘suspect’ concession they referred to is the one awarded to Electrogas, described by international energy market analysts as a deal where Malta was “losing money hand over fist”.

The power station sell-off featured in headlines from Azerbaijan to New York as a corrupt deal potentially linked to the 2017 assassination of investigative journalist Daphne Caruana Galizia.

Yorgen Fenech, the Tumas Group heir awaiting trial for allegedly conspiring to murder her, was a director of and is a key shareholder in Electrogas, as well as the owner of 17 Black, a company in the Ajman Freezone (United Arab Emirates).

Following questions in parliament, the National Audit Office (NAO) examined the corrupt process through which Electrogas was awarded the €5 billion concession in 2013. It published a 600-page report, and the findings were damning.

But procurement irregularities are not the only links between Electrogas and the hospitals concession.

Shaukat Ali (centre) and his sons Asad (right) and Wajid (left) are all facing criminal charges related to the hospitals deal.

Investigators found evidence that Shaukat Ali Abdul Ghafoor, a hidden beneficial owner of Vitals and alleged front for politically exposed persons, assisted Keith Schembri and Konrad Mizzi with opening bank accounts in Dubai. These accounts were allegedly to be used for Schembri and Mizzi’s secret Panama companies.

Likewise, investigators found that “a common friend from Malta” introduced Yorgen Fenech to Wasay Bhatti, an advisor and alleged front for Shaukat Ali, for assistance with moving money when 17 Black’s accounts at Noor Bank in Dubai were suddenly shut down.

Disgraced former prime minister Joseph Muscat is charged with allegedly receiving bribes from companies controlled by Bhatti relating to the hospitals concession.

Investigators also retrieved documents that revealed VGH frontman Ram Tumuluri had engaged in discussions with 17 Black owner Fenech in 2015 to buy Gasol’s shares in Electrogas Malta using an offshore company called Dempsy Investments Ltd. Like Vitals, this company was ultimately owned on paper by Mark Edward Pawley.

Investigators looking into the hospitals concession found that Tumuluri was involved in structuring a buyout of Gasol’s shares in Electrogas through offshore companies related to the hospitals.

These documents showed that Tumuluri was planning to use the same questionable funding structure he used for the hospital concession, including a surreal bank guarantee issued by an Indian company whose main business was the supply of milk.

These latest emails now separately confirm that these negotiations by Tumuluri with Fenech and Gasol took place, and they confirm Schembri’s active involvement.

Gasol exits

It is unclear whether negotiations progressed further. In July 2015, Electrogas formally notified then-minister Konrad Mizzi and Enemalta that Gasol was facing difficulties and that Siemens, GEM, and Socar would buy it out.

An evaluation committee was cobbled together to review the request and establish whether Electrogas still fulfilled the conditions of the bid following Gasol’s withdrawal.

This committee — again composed of the ‘right’ people — effectively rubber-stamped the departure of the lead member and 30% shareholder without impacting Electrogas’s award of the concession.

The NAO later found that the government and Enemalta had amended the contracts with Electrogas to permit this previously prohibited transfer.

Schembri and Mizzi are the subject of US State Department sanctions, including a US travel ban, for significant corruption in their role in Electrogas.

Schembri, Mizzi, Tumuluri, Pawley and many others are facing criminal charges for bribery, fraud, insider trading, misappropriation and money laundering in relation to the hospitals concession. All involved deny any wrongdoing.