Hospitals’ deal: How did we get here?
It’s crunch time for the hospitals’ investigation.
After nearly five years, a magistrate has handed 72 boxes of evidence to the Attorney General, indicating criminal wrongdoing in the deal.
Ex-prime minister Joseph Muscat has already broken his own bad news: “I know I’ll be charged” he said at a press conference last Tuesday, hot on the heels of the inquiry being concluded.
The details of the inquiry’s findings are not yet public.
Muscat’s government signed off on a €4 billion deal handing three public hospitals to Vitals Global Healthcare (VGH).
Despite the grandiose name, the investors behind Vitals had no tangible track record in healthcare.
The deal was “fraudulent” from day one, the Auditor General and a civil court have previously ruled.
Why?
Muscat’s government secretly signed a memorandum of understanding with the investors, behind everyone’s back.
The government then went through the show of issuing a competitive tender.
Lo-and-behold, the same investors who signed the secret deal then went on to win the tender.
It didn’t last long.
By the end of 2017, Vitals was facing financial ruin, and the Karin Grech, St Luke’s and Gozo hospitals showed little sign of the promised investment.
Seemingly out of thin air, another company – Steward Health Care – was endorsed by the government to run the hospitals.
Ex-Vitals director Ram Tumuluri claims top government officials conspired with Steward to kick him and Vitals out.
The deal with Steward too, would end in tears. A civil court terminated their contract last year, claiming both Vitals and Steward defrauded the government.
An appeals court went a step further.
Both the investors and government officials were complicit in the fraud, a panel of three judges, including the chief justice, ruled.
Despite the strong words, the judgment in the civil court meant little in terms of criminal repercussions on the government officials involved.
Until now.
WHat did josepH Muscat do?
Muscat didn’t just oversee the “fraudulent deal.” He is suspected to have secretly profited from it.
Weeks after resigning as prime minister, Muscat suddenly started receiving monthly payments of €15,000 from two Swiss companies, Accutor Consulting and SpringX Media.
On the face of it, the companies had nothing to do with either Vitals or Steward.
A money trail uncovered by Times of Malta in 2021 showed otherwise. Accutor was used by Steward to funnel payoffs to the Vitals investors. Millions of euros and dollars were paid into Accutor by Steward.
In March 2020, Muscat popped up on the receiving end of payments from Accutor. Muscat claims these payments were for legitimate consultancy work.
Bogus consultancy agreements are a common tool used to launder payments stemming from corruption. Such agreements give a clean air to dirty money.
This is the first time an exprime minister has faced a real possibility of prosecution.
Staring down the barrel of criminal charges, Muscat vehemently denies wrongdoing.
“Bring it on. I am bracing myself for it and I will fight it to win it,” he said last week.
Konrad Mizzi and KeitH scHeMbri
Keith Schembri and Konrad Mizzi, the ex-prime minister’s left and right-hand men, will likely face corruption charges.
The trio have been joined at the hip since 2013, when Labour first shot to power.
Muscat made Mizzi the public face of the hospitals’ deal. Schembri, as ever, was the one pulling the strings in the background.
The entire negotiation procedure between VGH and the government remains steeped in mystery. The government committee that led the contract negotiations with VGH failed to retain any documentation relating to its work, according to an audit.
Auditor General Charles Deguara has accused Mizzi of “misleading” his cabinet colleagues over certain financial aspects of a side deal with Steward.
Mizzi denies wrongdoing.
The ex-health minister has also been accused of “shirking responsibility” for the deal and refusing to cooperate with the Auditor General.
Furthermore, Mizzi is said to have consistently signed off on changes to the original deal, that appeared to solely favour VGH’s interests, rather than the government’s.
It is not yet known whether the magisterial inquiry has uncovered payments to Mizzi or Schembri in connection with the deal.
Mizzi’s home was searched in 2021 and his mobile phone seized in connection with the inquiry.
Schembri is known to have visited Accutor’s Swiss offices when he was still Muscat’s chief of staff.
E-mails made public by Steward indicate Schembri played a key role in securing the company’s takeover of the deal from VGH.
Both Schembri and Mizzi have kept a low profile since exiting politics in November 2019.
Schembri was charged with money-laundering in 2021, but not in connection with the hospitals’ deal.
cHris and edWard
Mizzi’s successor as health minister Chris Fearne as well as ex-finance minister Edward Scicluna are also reportedly facing the prospects of criminal charges.
Both men have always publicly and privately distanced themselves from the “fraudulent” deal.
However, this very inaction may prove to be their downfall.
As the Auditor General put it, the finance ministry was not even consulted about the privatisation deal.
Allowing this situation was a “gross shortcoming” in financial management of public funds, in a deal conservatively valued at €4 billion, the Auditor General said.
Scicluna once famously said Muscat’s government had an inner core – including Mizzi and Schembri, who took decisions in a “kitchen cabinet”, behind the backs of other ministers.
The ex-finance minister may very well have to answer in court why he let Muscat, Schembri and Mizzi cook up the hospitals’ deal in the kitchen cabinet, without trying to intervene and safeguard public money.
Fearne too has come under fire for his back seat role in the deal.
He famously welcomed Steward as the “real deal” in 2017, when they took over from Vitals.
Although Fearne appeared to have been sidelined during negotiations with Steward, questions have been raised about why he failed to intervene and use his clout as health minister to put an end to the shenanigans.
Fearne denied any wrongdoing in a statement on Friday.
“I have no doubt there will be the same conclusions this time around. I have never broken any law or ministerial ethics,” the minister said, pointing out, however, that he could only speak on his behalf,” he said.
“The Muscat, Konrad and Keith trio have been joined at the hip since 2013