GWU uses irregular income to settle debts with ARMS

The General Workers Union (GWU), Malta’s largest registered union traditionally affiliated with the governing Labour Party, has used tens of thousands of euro in irregular income derived from public funds to settle massive debts from accumulated water and electricity bills.

The Shift is informed that the GWU made an arrangement with Arms Ltd, the government’s utility billing company, to partially settle its arrears through a barter agreement by renting out part of its headquarters in Valletta to the government entity.

In exchange, the €62,000 that ARMS agreed to pay the union annually was used to slash parts of the unpaid bills.

The rental agreement between GWU and ARMS Ltd was entered into in 2014 and recently annulled by the court because the union could not lease its premises for commercial purposes according to a government concession signed in 1957 that covers the public property now known as the Workers Memorial Building.

Still, Arms Ltd agreed to use the public funds it was irregularly paying to the GWU to cancel some of the union’s debts.

The GWU confirmed the arrangement but refused to disclose the value of the debt accumulated for unpaid water and electricity services. The Shift is informed that these are substantial and may amount to hundreds of thousands of euro.

When asked to confirm this arrangement, a spokesperson for the GWU said:

“We would like to advise that the suggestion of ‘massive’ pending arrears with ARMS Ltd does not accurately reflect the situation. The outstanding bills are consistent with the utility consumption of an organisation of our size. While these amounts may appear significant from a residential perspective, they are typical for entities with similar operational needs. We also wish to highlight that our credit arrangements are managed in a normal and structured manner, ensuring that all obligations are met professionally and responsibly.”

Facilitating a cosy relationship

The latest arrangement between the Labour government and the GWU reinforces the bond between the two and may explain the usually militant union’s minimal action during recent years in defence of workers’ rights.

The GWU started renting part of its premises to ARMS through an illegal contract in 2014, shortly after Labour returned to power. The union received €62,000 annually for 350 square metres of space that hosts ARMS’s customer care offices.

The PN asked the court to annul the agreement after the government refused to take action to uphold the rule of law because it went against the public concession given to the union in 1957 by the Labour government led by Dom Mintoff.

In a decision by Judge Mark Simiana last year, the court annulled the lease agreement, declaring it in breach of both the law and the 1957 public concession agreement, but it stopped short of declaring the 1957 public concession null and void, avoiding serious repercussions for the GWU.

The Arms contract is not the only problem.

The court also annulled another lease agreement entered into with Kasco Foods – owned by Keith Schembri, the disgraced former OPM chief of staff accused of money laundering and corruption — to use another part of the GWU premises as a restaurant.

A few weeks ago, after a parliamentary resolution approved by Labour MPs, Prime Minister Robert Abela amended the GWU’s original 1957 concession so the trade union could turn part of its building into a commercial entity.

GWU Secretary General Joseph Bugeja hailed this new arrangement as “a win for Maltese workers”.

The GWU currently earns millions from commercial arrangements it made with Labour, including leasing property and managing schemes for the unemployed.

Several GWU officials, including its president, serve on government boards or act as consultants and are paid privately from public funds.