Auditor General confirms no evidence of corruption found in power station tender

The Auditor-General confirmed today that he had found no corruption or evidence of trading in influence in the power station extension contract.

Anthony Mifsud was grilled by MPs for two hours as a much-delayed Public Accounts Committee meeting on the controversial contract finally got under way.

Early in the sitting, Labour MP Evarist Bartolo said that the PAC had been ‘castrated’ because it could not summon witnesses other than the auditor, a term which was to be repeated several times.

After some wrangling over procedure, Infrastructure Minister Austin Gatt asked Mr Mifsud a series of questions about whether the National Audit Office (NAO) had found any evidence of corruption or trading in influence and, had that been the case, whether the Office would have reverted to the police.

Mr Mifsud said the NAO found no hard evidence of corruption but it saw many coincidences which made one wonder. There was smoke but no fire was found.

Had evidence of corruption been found, the NAO would have reverted to the police, he confirmed.

Neither did it result that there was trading in influence.

Dr Gatt observed that had there been corruption, there would have been people who tried to corrupt, and people who were corrupted.

The selection of the tender for the contract, he observed, involved financial and technical considerations which were decided in a long process involving 10 stages where the various boards and committees, in all cases, took their decisions unanimously.

He listed each stage and the persons involved in the decision making, and after each case, he asked the Auditor if there was any evidence that these people had been corrupted.

In all cases, the Auditor replied that there was no evidence.

“Therefore,” Dr Gatt said, “you found no evidence of corruption, no evidence of any of these persons having been corrupted, no evidence of trading in influence, and no evidence that anyone accepted to use his influence, right?

The auditor said that was the case, in view of the information available to the Audit office. He pointed out, however that there had been lack of cooperation from some people who the NAO had questioned.

Dr Gatt asked if any of the bidders had appealed, even when, during the technical deliberations, BWSC was not the preferred bidder.

The Auditor confirmed no one had appeal except in the final stage when one of the bidders complained that it was not informed of the result.

Dr Gatt noted that Bateman did not even come second. MANN came second, and did not appeal.

Labour MP Helena Dalli remarked that the ‘smoke’ that the Auditor General had spoken about did not refer to empty words, but serious issues which led him to look for fire. She asked the Auditor what smoke he had found.

The auditor said there was a series of coincidences throughout the process. For example, Enemalta always held its meetings with BWSC after having met the other bidders.

It was also strange how (consultancy firm) Lehmayer initially offered its services and was turned down, and then Enemalta itself sought its services a month later.

Mr Mifsud said lack of cooperation was evident mostly from BWSC agent Joseph Mizzi.

Charles Deguara, Deputy Auditor-General, said when questioned that Mr Mizzi had not been forthcoming about his meetings with BWSC. He also refused to answer questions.

At this stage the Auditor-General was asked if he could publish the text of what Mr Mizzi was asked, and what his replies were.

Intervening, legal adviser Prof Ian Refalo said NAO proceedings were protected by the Professional Secrecy Act.

Labour MP Evarist Bartolo later said he agreed that such proceedings should be confidential, so as to encourage people to come forward with information. But he said, that reinforced the need for this ‘castrated’ committee to be able to hear witnesses itself.

The Auditor said that Mr Mizzi had also not replied to questions on e-mails send in 2005.

Dr Gatt observed that according to the NAO report, Mr Mizzi had replied to the questions by saying that he had written those e-mails on instructions from his then employer, ASL.

Amid uproar, Mr Bartolo accused Dr Gatt of replying for the Auditor.

Mr Bartolo noted that the NAO had said that the tendering procedure should have been stopped when the emission thresholds were changed. This, surely, was based on firm information, not smoke.

He asked if Mr Mizzi had given NAO any information about e-mail exchanges after 2005 and whether BWSC officials had given any new information to NAO.

The Auditor said no new information was given.

Mr Bartolo observed that BWSC had congratulated Mr Mizzi for his contacts and intelligence network.

He observed that in 2005, on the basis of exchanges with Mr Mizzi, BWSC was already preparing to bid to supply a 100MW generating plant when, at the time Enemalta was said to be interested in a smaller plant.

Yet, within a year, Enemalta changed its position, fitting neatly with what BWSC had been preparing.

Mr Mizzi was able to arrange the timing of Enemalta’s meetings with the bidders, the specifications of the tenders, and the legal emission thresholds

The Auditor said the NAO was not asked to investigate the previous intention for a 65MW generating unit.

Mr Bartolo asked if Mr Mizzi was accompanied by a former Enemalta lawyer at the NAO meetings.

The Auditor said that he was. The lawyer was not employed by Enemalta at the time.

Dr Gatt observed that the e-mails referred to by the Opposition were written well over a year before the call for tenders for the power station extension was made. The award was made four years later.

He noted that the Opposition had told the Auditor that Mr Mizzi had sought favour from ‘people higher up the political hierarchy'.

Such people, he said, could only mean the prime minister or ministers. Had the Auditor established if anyone from the government had actually ever met anyone connected to BWSC?

The Auditor said that no such link had been established, but he had not questioned the ministers, other than Dr Gatt himself, who volunteered to come forward.

Dr Gatt said all the members of the government were prepared to submit sworn statements that they had no contacts with BWSC. He did not know if the Opposition could do the same...

He also asked if the Opposition had told the Auditor who from the government had met the BWSC officials.

The Auditor said no one was identified.

Dr Gatt asked if NAO had confirmed that Mr Mizzi had inside information from an Enemalta engineer.

The Auditor said no evidence was found.

The same applied for the Contacts Committee.

Dr Gatt observed that Joseph Mizzi had ceased to be an Enemalta employee 20 years before this case.

Had it resulted that he had sued the government because he was passed over for promotion?

The Auditor said that was not within his remit.

Dr Gatt also asked if NAO knew that two former Enemalta engineers had worked for the bids of the other competing companies.

The Auditor said the other bidders were represented by local companies Gasan and Fenech.

Dr Gatt argued that the fact that the e-mails purportedly written by Mr Mizzi were written at the time when he was in the employ of ASL meant that the ultimate beneficiary was not him, but ASL.

The Auditor said Mr Mizzi could have benefited on a commission basis.

Mr Mizzi had said that he wrote the e mails on instructions of his them employer, Mr Rizzo, while Mr Rizzo said that Mr Mizzi was bluffing.

Mr Bartolo said it was certainly no bluff that what Mr Mizzi promised in 2005 came true, including the tender specifications, the scheduling of the meetings and the change to the emission standards. Such changes, clearly, required good political contacts and good contacts in Enemalta.

He asked if there had been a falling out between ASL owner Mr Rizzo, and Mr Mizzi.

The Auditor confirmed that relations had started to deteriorate.

Mr Bartolo observed that Mr Mizzi subsequently left ASL and BWSC insisted that he should continue to represent them.

He pointed out that Mr Mizzi had sought to delete his 2005 e-mails from the ASL computers before he left.

He asked if Mr Mizzi made other exchanges available to NAO after this period.

The Auditor said he did not.

Mr Bartolo asked if Mr Mizzi had been a regular visitor to Enemalta and the Contracts Department, even when he left ASL.

The Auditor said Mr Mizzi represented several companies which submitted many bids. Furthermore, some Enemalta visitor registration documents were missing...

The committee will continue its proceedings on December 1.