Muscat’s phantom hospital and the network behind it

Labour always delivers what it promises, former prime minister Joseph Muscat said.

At the height of his glory on 28 March 2015, that same Muscat promised a €100 million state-of-the-art new hospital at Smart City  – S. Joannes Paulus II Hospital. Muscat pledged it would be a “medical centre of excellence for the Mediterranean” and would be operational by 2017.

A decade later, without a single stone of that splendid centre of excellence laid and without a single euro invested out of the promised 100 million, the courts have officially revoked the land concession allocated for Muscat’s hospital and ordered the concession’s dissolution.

The Smart City hospital isn’t just another hyped-up Muscat empty promise. This was another grimy, rotten scam to rival Vitals, Mozura, and Electrogas, at least in spirit if not in scale. Behind that thick grease were Muscat’s same dodgy duo – Keith Schembri and Konrad Mizzi – who had direct hidden financial interests in that stinking deal.

In March 2015 Muscat hosted a lavish presentation with full colour photo-montages of the new SmartCity Hospital in Castille.  His loyal duo, Mizzi and Schembri, sat next to him as the representatives of Synesis Limited, the new Maltese-Italian company behind the project, made wild claims of huge investment and international links.  They claimed the hospital would operate in strategic alliance with international healthcare giants Johnson and Johnson, which was “an innovative element, which goes beyond the simple supplier relationship”.

Mizzi stepped up to the podium to deliver even wilder claims.  The hospital he pledged would employ 500 people and would focus on “orthopaedic and sports medicine”. “Genomic medicine will also be pioneered in Malta from this facility”, he added.  International specialists would work alongside Maltese university professionals. He insisted the new hospital would provide medical education, research and a cadaver laboratory.   The Maltese government was handing over 23,500 square metres of land at Smart City for the hospital project.

The highlight of the event was Joseph Muscat’s pitch. The 100 million investment, Muscat boasted, is “an important step in achieving the vision of creating a healthcare cluster in the centre of the Mediterranean”.  Never one to miss an opportunity to mock his predecessor, Muscat commented cynically: “Smart City, which two years ago was a project lagging behind a problem, is now a solution which will attract high net-worth individuals to the island”.

So who were these high net-worth individuals? Synesis Ltd, the company meant to invest those millions was fronted by Maltese businessman Stephen Carter and Italian lawyer Francesco Rosi.  Giovanni Rusciano, another Italian, served as the main consultant behind the project.

Rosi and Rusciano, it turned out,  were closely associated with the near collapse of a Roman private hospital IDI. Eight hundred million euro in state funds earmarked for public services from the hospital had disappeared.  Hundreds of hospital staff were fired as a result of the crisis. Rosi handled the hospital’s financial arrangements, while Rusciano handled procurement and tenders. Rusciano had been investigated over alleged misappropriation of IDI funds and criminal association.

Less than one year after the lavish presentation at Castille, Carter , the Maltese face of Synesis Ltd,  was charged with money-laundering, fraud and misappropriation. Carter was also charged with defrauding a Gozitan couple.  In May 2018, Carter’s assets were frozen. Carter was forced to resign as director of Shoreline Residence.

While Carter and the two Italian lawyers were the named directors for Synesis Ltd, nobody knew who the ultimate beneficial owners were.  Their identity was expertly hidden behind ridiculously complex financial structures. The company was owned by three separate companies, all with different shareholding structures.

The majority shareholding was held by the Italians through Omnia Quality Holdings Ltd, but another part of the shareholding was held by Gloteks Ltd, which in turn was owned by a nominee company, Classic Services Ltd.  Among the directors of that nominee company was Mizzi’s closest buddy, Aron Mifsud Bonnici – that’s the one who’s just been spared prosecution for money-laundering, thanks to Labour’s merciful Bill 124.

To find out who was really behind the whole scam, we had to wait for a magisterial inquiry into the Vitals Global Healthcare concession. And surprise surprise, right in the middle of that sordid mess were Muscat’s chief lieutenants – Mizzi and Schembri.

Investigators discovered that Ivan Vassallo, who’d been given a €5.14 million loan by Vitals Global Shareholders to acquire Technoline, had set up a company called Eurybates in September 2015.  The company was to become part of a joint venture called Gene Malta which would “provide personalised medicine at a new 100 million hospital based at SmartCity Malta”.  Ninety per cent of the shares of Eurybates were to be held by Mizzi, Schembri, Pierre Sladden and former Allied Newspapers director Adrian Hillmann.

Vassallo and Carter were in regular contact between July 2015 and December 2015, immediately after Muscat announced the 100 million Hospital investment.  Gene Malta was planned to earn €200 per patient treated at the 200-bed St Johannes Paulus II hospital.  Assuming 80% capacity and a mean hospital stay of three days, Eurybates would have profited from €4.8 million per year.

Mizzi and Schembri never made any money off that project, not for want of trying.  But Eurybates received approximately €1.8 million euro from projects involving Technoline, Sirimed and others. Investigators came to the obvious conclusion – Eurybates was “a vehicle for kickbacks”.

But Synesis Ltd didn’t even have the €522,287 for the first payment it owed, due on 28 March 2017.  Synesis kept insisting that financing would be secured through project financing and that works would “commence shortly.  But nothing happened. Synesis had no money. Muscat’s €100 million hospital was far from “another major success story in foreign direct investment”. It was an absolute and catastrophic disaster.

Joseph Muscat must either be the unluckiest and naivest man on the planet, constantly exploited by a long list of people subsequently charged with serious crimes – Keith Schembri, Konrad Mizzi, Adrian Hillmann, Pierre Sladden, Ivan Vassallo. Or else Muscat knew about Eurybates and his dodgy duo’s corrupt plans to profit off the sick, and aided and abetted them by promoting Synesis and their project from Castille. What is certain is that Muscat kept defending and protecting both men till the very end, even after they were charged.

Whichever it is, Muscat owes the nation an apology – for his incompetence or for his repugnant collusion. Instead of apologising, he keeps cropping up, preaching his wisdom and foisting himself upon the nation. In June 2024, the court found there was enough prima facie evidence for the case against Muscat, Schembri and Mizzi over bribery, money laundering, and criminal association to continue.

In any normal country, Muscat would be busy fighting criminal investigators and prosecutors and lodging appeals in a desperate attempt to retain his freedom. In Malta, the taxpayers keep paying for his Sa Maison office, from where he conducts his profitable private business.