Dalli's resignation not linked to false claims, insists PM

Prime Minister Lawrence Gonzi reiterated yesterday that the resignation of John Dalli as Minister of Foreign Affairs in July 2004 had "absolutely nothing to do" with the false allegations made in a private investigator's report into a Mater Dei Hospital contract.

Late last week, the former Finance and Foreign Minister claimed he had been forced to resign from the Cabinet as a result of the allegations carried in the report which was found by a court to have been fabricated by private investigator Joe Zahra. The report had alleged that following meetings involving Mr Dalli's brother, among others, a Lm25 million hospital equipment contract was awarded to Italian company Inso. Mr Zahra had compiled the report for Simed, a company which had lost the bid.

Mr Dalli subsequently said he expected the Prime Minister to take the "necessary" action after the court judgment found no irregularities in the tender allocation.

But Dr Gonzi yesterday insisted that the false allegations in the report had been the reason behind Mr Dalli's resignation.

Carefully wording his replies when questioned by The Times following a public address at the PN office in Marsaxlokk, Dr Gonzi said: "As far as I'm concerned, it had absolutely nothing to do with this case".

In his weekly column in The Sunday Times yesterday, Mr Dalli said that as a result of the report concocted by Mr Zahra, the Prime Minister and his advisers presumed him guilty and pushed for his resignation from Cabinet even though the report itself had been flawed.

Mr Dalli went on to ask why the Prime Minister had not insisted that he be given proof before taking his political decision, and even why he (Mr Dalli) had not been made aware of the report and given the opportunity to defend himself.

Yet according to Dr Gonzi, when Mr Dalli resigned as Foreign Minister, the information which had to do with the hospital tender allegations had not been yet compiled.

"At around June 11, 2004, all I had was an allegation from the legal representatives of the company which lost the tender and which, at the time, appeared completely unfounded," Dr Gonzi said.

The information, he said, only reached him after Mr Dalli's resignation and he passed the details on to the Police Commissioner for investigation.

The court ruling last week proved that the tender awarding process had been above board and that the allegations made at the time had been pure fabrication, Dr Gonzi said. They proved that the allegations made about the Nationalist government and against Mr Dalli had been unfounded.

"Initially, political mileage had been made out of the issue. Subsequently, more allegations came forth and at a certain point, the allegations came from the company which had lost the tender. In fact, the individual who wrote the false report had been commissioned by that company," Dr Gonzi said.

The Prime Minister said that when the losing bidder and its legal representatives had asked to see him, making "extremely serious allegations", he had promised to call an investigation upon being given proof of the allegations.

"They did not provide proof, and because the allegations kept resurfacing, I referred the case to the Police Commissioner. It turned out that all the allegations against Mr Dalli and the Nationalist Party were false. When I had met John Dalli to discuss a number of issues, including this case, I had expressed my intention to seek advice on whether the government could sue those who made the allegations," Dr Gonzi said.

Mr Dalli had resigned amid claims that the Ministry of Foreign Affairs, which he headed at the time, had made over Lm40,000 worth of travel bookings through a travel agency which was a shareholder in a company whose directors were the two daughters and a former driver of Mr Dalli.

Another claim, made by Opposition leader Alfred Sant, had been that the Foreign Minister had personally intervened to ensure that Gauci Borda Shipping Ltd - whose secretary was Mr Dalli's daughter - was appointed local agent of Islamic Republic of Iran Shipping Lines (IRISL).

Dr Gonzi had said in an interview with The Times in July 2004 that in the case of the Iranian shipping lines, no claims against Mr Dalli had been substantiated.

"With respect to the travel (agency) issue, the facts are there. They are even explained by Mr Dalli himself in his statement. So I think the situation unfortunately developed in a way where both of us concluded that Mr Dalli could not continue to occupy the post of a minister. That is why I accepted his resignation when he offered it," Dr Gonzi had said.

Asked yesterday evening why he was linking his resignation with the fabricated report when he had failed to mention it before, Mr Dalli said it was clear with hindsight that the Prime Minister had had the report in hand 15 days before his resignation.

"Dr Gonzi had told me 'I cannot have a minister who is under investigation'. He never answered me directly when I asked him what investigation he was talking about," Mr Dalli said.

He claimed the allegations about IRISL and his daughters' involvement with the travel agency were smokescreens spinned by certain journalists.

"They were simply a series of manoeuvres to get rid of me," Mr Dalli said.