The former managing director of the Voice of the Mediterranean yesterday denied claims that he had exceeded his hospitality allowance and of squandering Lm18,000 on a Mediterranean "cruise".

Richard Muscat was speaking during the morning meeting of the Public Accounts Committee which was discussing an inquiry report by the Auditor General that was highly critical of the way funds at the station were administered between 2000 and 2003.

Replying to questions by committee chairman Charles Mangion, Mr Muscat said that what had been described as a "cruise" was the Odyssey project - a Mediterranean dialogue/peace tour around 15 Mediterranean ports. This was on board a Romanian warship, which had artists from all the five partner countries including Malta.

Dr Mangion pointed out that this project had cost VoM around Lm18,000. This, he said, was in 2003 when Mr Muscat was aware of the station's precarious financial situation.

Mr Muscat said that most of the payments were made before the summer of 2002.

He also denied claims by the Auditor General that fireworks had cost over Lm8,000. No fireworks had been paid for, he said.

Simon Ciantar, from the office of the Auditor General, said that during the investigations they had found a nominal ledger payment for pyrotechnics and a credit advice issued by a bank dated October 30, 2003. More information about the fireworks had been obtained from interviews with VoM staff.

Asked about the selection of Cyberspace Ltd for the provision of an internet radio service, Mr Muscat said that he had handpicked the company because he felt he had a certain leeway and could avoid the bureaucratic procedures of the civil service, which could have meant losing certain opportunities.

Turning to the Auditor General's claim that his hospitality expenses were in excess of his entitlement, Mr Muscat said that his personal hospitality allowance was Lm700.

He used this allowance for work related activities and in these instances he did not provide an invoice.

The expenses referred to by the Auditor General could in no way have been covered by his allowance. One such expense was for Christmas drinks for VoM's staff of 18 contributors and other friends of VoM, amounting to 130 persons, which had cost Lm585.

Labour MP Helena Dalli asked Mr Muscat about a meal at the Re del Pesce restaurant, that cost Lm178 and for which no receipt had been presented. Mr Muscat said that the lunch was for VoM staff but he did not know why an invoice was not presented.

As for travel expenses, he said VoM had been an international station with membership in international organisations and all travel had been in relation to these organisations.

Asked by Labour MP Leo Brincat why he always used the services of EuroTours, the Nationalist Party's travel agency, he said he did not have a reply to this question.

Mr Brincat asked Mr Muscat about a VoM sponsorship for the opening of the Dublin Consular Office at a time when the station was going through a precarious financial situation.

Mr Muscat said the situation at the radio then was not precarious and he had saved the Foreign Affairs Ministry money.

Mr Muscat said that the problems for VoM started looming at the time of the relocation to Birkirkara when the Libyan government's payments were not forthcoming. He had written to the Foreign Minister and to the Parliamentary Secretary at the Foreign Ministry explaining the situation. Had the move to Birkirkara not been required, VoM would have survived for another year.

The committee yesterday started its meeting by listening to a recording of the interview which the staff of the Auditor General's office had with Cyberspace managing director Tony Cassar as part of their investigation.

Mr Cassar was continuously asked about the similarities between the two contracts for the provision of internet services and he explained what services each contract required. The Auditor General's staff could be heard insisting that what Mr Cassar was saying he did, did not form part of the contracts.

During questioning at yesterday's meeting, it transpired that the Auditor General's copy of the internal inquiry report by Foreign Ministry officials Charles Mifsud and Gaetan Naudi did not include an attachment with an explanation from Cyberspace on the differences between the two contracts.

Dr Mangion insisted that the the Auditor General's staff should have obtained their copy of this inquiry report from Parliament. The investigation carried out by the Auditor General, he pointed out, had been instigated by a report presented in Parliament, therefore, the office should requested a copy of the report.

Dr Mangion asked the Auditor General's IT expert, Louis Borg, what his opinion on the contracts was, now that he had seen the document attached to the internal inquiry by the Foreign Ministry. Mr Borg said that the work highlighted in these documents would definitely have cost more than laid down in the original contract but he could not quantify the value and increase in cost.

Replying to questions by Mr Brincat, Mr Cassar said he had employed Mr Muscat's son following an interview, when he was looking for people with experience in networking.

When the VoM contract was terminated, Cyberspace had to restructure and its staff were moved to other deparments. Mr Muscat's son Marianu had been asked to move to the sales department but he preferred to resign and further his studies.

Mr Cassar was asked for an explanation regarding an invoice covering hotel accommodation.

He said that this was related to the Odyssey project. Two days before the ship's arrival in Malta, he was contacted by Mr Muscat who told him that the crew needed accommodation for one night and asked him to find suitable lodgings in a two-star hotel. The accommodation was for around 70 people but he did not remember the name of the hotel or the rates charged. The total was for Lm850.

Mrs Dalli told Mr Cassar that when he claimed expenses, he should have attached the hotel invoice to his own invoice. It was also unacceptable that he did not remember the hotel's name.

Questioned about this by Mr Brincat in the afternoon sitting, Mr Muscat said Mr Cassar had been involved in this project because he had offered to help in the organisation of the activity.

He (Mr Muscat) asked Mr Cassar to organise the said activity and this was held at the Milano Due Hotel. Asked how he had signed a payment voucher without a hotel invoice, Mr Muscat said he did not know that this was the case. However, he could vouch that the price charged by the hotel was what VoM had been charged because he had spoken with the hotel owner.

On the claim that Lm39,000 had been spent on office furniture and that he had changed his office furniture twice in one year, Mr Muscat said that when he assumed his position, the Floriana office still had old, steel furniture.

The furniture had to be changed once more after the relocation to Birkirkara because the new office was bigger. His old furniture was used in another office.

The steel furniture was sold for some Lm300.

Questioned on the payment of terminal benefits to a part-time accountant who had a full-time job elsewhere, the Corporate Services director at the Foreign Ministry Charles Mifsud said the advice of a foreign ministry lawyer had been sought.

Dr Gatt called on the committee to ask the Foreign Affairs Ministry to reclaim the terminal benefits paid to this employee.

The committee yesterday evening also heard evidence by Sergio d'Amico, who had done network consultancy work for VoM.

Dr d'Amico gave a technical explanation as to the length of cable that, in his opinion, had been required at VoM but which the Auditor General's office had found to be more than necessary.

He said that following his first interview with Mr Burlò, he had sent Mr Ciantar an e-mail explaining how the calculations were made. He also asked for a second meeting with Mr Burlò, to which he had taken two copies of a file with the intention of leaving one copy to the office of the Auditor General.

Dr d'Amico claimed that this file, except for one page of it, in which he had criticised the managing director of VoM for his choice of servers, had not been accepted by the Auditor General's staff.

Dr d'Amico said he had also offered Mr Burlò to accompany him at an inspection of the office but the latter told him he did not have the time.

Mr Borg said when asked he had never seen Dr d'Amico's e-mail. He said that in his opinion, the amount of cable claimed as used had not, in fact all been used.

Mr Burlò said that the office had tapes of the meeting with Dr d'Amico and if one listened to them, one would see what Dr d'Amico had said.

At the beginning of yesterday evening's meeting, it was pointed out to the Auditor General that his office had been asked to present a list of the people or companies they had tried to appoint as experts but who had refused.

Mr Burlò said he did not have this list available. He said Mr Borg had been appointed on the recommendation of a colleague.

Dr Gatt questioned why this statement had not been made by Mr Burlò when he was first asked about the situation. The minister said he did not believe that other persons had been contacted. He said that the Auditor General's office had chosen its expert in a very amateurish manner.

Later, when the committee started to speak on fire fighting, Dr Gatt noted that by coincidence, the fire fighting expert appointed by the Auditor General had also, in the past, been an employee of the fire fighting contractor Alberta.

He said he expected the unwritten regulations regarding conflict of interest to also be used by the people carrying out investigations.

He pointed out that there had been too many coincidences in this investigation.

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