The oil scandal is one of the biggest to have hit the headlines in recent decades. It’s also one of the most complicated. Mark Micallef and Kurt Sansone present a simplified version of it, starting with how the politicians fit in the picture.

Tonio Fenech

Tonio Fenech is currently responsible for Enemalta but was not when the bulk of the oil deals under investigation took place.

He only really entered the scene when The Sunday Times revealed that George Farrugia, the man at the centre of the scandal, was involved in a tax fraud investigation.

Mr Fenech explained the Tax Compliance Unit had been tasked with investigating Mr Farrugia’s company Aikon Ltd after the ministry was given a dossier by the Security Service.

His role became more complicated when it was revealed he had received a traditional Tal-Lira clock.

Labour first claimed it was worth €5,000 but Mr Fenech said it was an amateur clock given to him by George Farrugia’s sister-in-law and had no particular monetary value.

The clock was delivered by Ray Farrugia and George Farrugia, though the minister says he does not remember George being present.

George Farrugia also claimed he had had a meeting with Mr Fenech about a tender in which he was a losing bidder. The minister said he did not remember this meeting but did not deny it took place.

Austin Gatt

Austin Gatt was responsible for Enemalta when the dealings under investigation took place and he appointed Tancred Tabone as chairman of Enemalta in 2003.

Mr Tabone was previously chairman of the State-owned bunkering company Mediterranean Offshore Bunkering Company (MOBC). He was replaced as chairman of Enemalta in 2005.

In August 2003 Mr Tabone appoi­n­ted as his consultant petrochemist Frank Sammut, also charged in connection with the case, who served as MOBC’s chief executive.

A series of e-mails from George Farrugia were published in The Sunday Times and Malta Today indicating that foreign oil companies were interested in the political connections of the oil trader. In the e-mails, Mr Farrugia refers to meetings with “A.G., Aust and the minister”.

Dr Gatt has not denied meeting Mr Farrugia but insisted he never spoke about tenders with him or anyone else because he had a strict policy in his ministry that nobody should discuss tenders with anyone.

He also filed a police report concerning the e-mails published, claiming that one in particular could have been tampered with and that he could be the victim of a frame-up.

Dr Gatt defended his appointment of Mr Tabone by saying that although it was debateable whether a minister should resign over a political appointee who breaches public trust, at the time of the appointment Mr Tabone was an upstanding business leader with good credentials.

The minister also ended up in the eye of the storm after it transpired that he had a Swiss bank account, which he failed to highlight in the annual declaration of assets ministers are obliged to make.

Dr Gatt admitted this was an oversight and said he had inherited the account from his parents. He insisted the account was not active and passed on details of the account to the Police Commissioner.

Joe Cordina

Labour’s financial administrator Joe Cordina was sucked into the scandal when the Nationalist Party highlighted that he was one of three directors of Intershore Fiduciary Ltd (IFL), which, at the time of the alleged corrupt practices, acted as shareholder and director of George Farrugia’s company, Aikon Ltd.

Mr Cordina co-owns IFL with lawyer Martin Fenech (a former PN candidate who contested the December 2012 by-election for the seat left vacant by European Commission Tonio Borg) and accountant Charles Scerri.

Malta’s financial laws allow for a company to act as a fiduciary, which means that it effectively appears for the real owner of a particular company, in this case George Farrugia.

A 2011 investigative audit commissioned by John’s Group as part of a law suit, accused the directors of the fiduciary of being “accomplices” in Mr Farrugia’s fraud.

The directors of the fiduciary defended themselves by saying that Mr Farrugia hid from them all evidence of tax fraud and corruption and therefore they could not be held responsible for his behaviour. When they found out of his illegal activities, they severed all ties with him.

Before that, they said they had carried out their duties to scrutinise the audited accounts and make Mr Farrugia go through a due diligence report and insisted there was never anything untoward.

Mr Farrugia effectively channelled certain transactions through a New York account, which was hidden from the auditor and the directors of the fiduciary.

In court, the police said that Mr Farrugia had admitted that the directors of the fiduciary company knew nothing of his illegal activity.

David Farrugia Sacco

Lawyer and Labour Party candidate David Farrugia Sacco represented the Farrugia brothers, owners of the John’s Group, in a civil suit they launched against their own brother George.

George Farrugia in 2010 was sacked by his own brothers from the family business when they realised he was siphoning off business from their oil trading subsidiary Powerplan to his own company Aikon Ltd. They eventually sued him for an estimated €6.4 million but eventually reached a settlement.

As part of the suit, the John’s Group brothers commissioned an audit report and an IT Audit, which involved the scanning of the office computers of George Farrugia and his wife Cathy.

This IT audit is believed to be the source of the e-mails which eventually appeared in Malta Today, indicating irregular practices in relation to Enemalta oil procurement. On this basis, the PN accused Dr Farrugia Sacco of having had knowledge of the scandal back in 2010 and potentially, of doing nothing about it and helping with the leak.

Dr Farrugia Sacco filed a libel suit against PN general secretary Paul Borg Olivier and the Finance Minister over the claim.

Moreover, he argued that he was only ever involved with the civil proceedings and never had knowledge of the e-mails indicating corruption, which later surfaced in the press.

He also defended the role of his brother Stephen Farrugia Sacco in the IT Audit, saying he was not involved in this exercise and had only given advice to the expert who actually trawled the hard drives of Mr Farrugia’s computer on how to prepare a report that will be presented in court.

Manuel Mallia

Criminal lawyer and Labour candidate Manuel Mallia, like his colleague David Farrugia Sacco, was accused of having knowledge of the scandal back in 2010, when during the campaign he claimed he had only learnt about the scandal from the newspapers.

Dr Mallia had represented the Farrugia brothers in part of their actions against George Farrugia.

According to court documents, Dr Mallia had sent a letter to the directors of Intershore Fiduciary Ltd, noting their client, George Farrugia, was running a fraudulent activity and by providing a front for him, they were accomplices.

Dr Mallia also represented John’s Group during a meeting they had in Geneva with French oil firm Total. During this meeting, John’s Group was attempting to convince Total executives to renew an agent’s contract they had with them after they had sacked their brother George.

Dr Mallia has also sued Dr Borg Olivier for libel on the matter.

1. Commission on oil sales

On January 20, 2013 Malta Today published invoices purporting to show former Enemalta director Frank Sammut had received kickbacks for oil sales to Enemalta by Dutch company Trafigura in 2004. A police investigation focused on commission paid by oil companies to Sammut and George Farrugia, who acted as an agent for Trafigura and Total.

In court it was alleged that Sammut used to split commission with Enemalta chairman Tancred Tabone. The money was allegedly deposited in Swiss bank accounts.

2. Consultant

Mr Sammut served at MOBC between 1997-2004 but in August 2003 he was appointed personal consultant to Tabone and advised on oil buying. In court the police said Trafigura won its first oil tender with Enemalta in December 2003 without submitting an offer.

Mr Sammut’s job as CEO of MOBC was terminated in July 2004 by Mr Tabone on instructions of Energy Minister Austin Gatt. Police said Tabone had said Mr Sammut would be hard to replace.

Shortly after leaving the State firm Mr Sammut joined Island Bunker Oils as a consultant.

3. Silent partners

Oil bunkering companies in 2004 had expressed concern over preferential treatment Island Bunker Oils received from Enemalta and MOBC as a result of Mr Sammut’s departure. Prior to Mr Sammut’s job termination a number of parliamentary questions were tabled about alleged conflicts of interest that some of MOBC’s top officials had in relation to private bunkering activity.

According to court testimony Mr Sammut and Mr Tabone were silent partners in Island Bunker Oils while they occupied posts in MOBC and Enemalta. Their shares were held by Anthony Cassar and Francis Portelli, who have also been charged with bribery.

4. Bunkering scandal

The police have investigated the activity of Island Bunker Oils and the alleged preferential treatment it received at the handsof MOBC.

Mr Cassar and Mr Portelli are charged with bribing Mr Sammut and Mr Tabone.

Allegations of wrongdoing by top Enemalta officials linked to this aspect were first raised in 2009 by former PN president and MP Frank Portelli. At the time the police looked into the case but had no evidence.

5. Presidential pardon

On February 8, 2013, Cabinet recommended Mr Farrugia be given a presidential pardon to turn state evidence. The pardon was officially granted two days later. Mr Gatt attended the Cabinet meeting, while Finance Minister Tonio Fenech was absent. Farrugia’s pardon was conditional on him testifying in court on the oil scandal and returning illicit proceeds he may have made as a result.

6. Gifts

Mr Farrugia provided police with a list of Enemalta officials who had received gifts from him. Three of the people implicated by Mr Farrugia – Alfred Mallia, Tarcisio Mifsud and Ray Ferris – were charged in court with bribery.

It is believed that Mr Farrugia has given the police more names of people who were allegedly involved in the oil buying scandal.

7. Family feud

Mr Farrugia owned John’s Group with his brothers. In 2010 his brothers accused him of siphoning off money earned by family company Powerplan that acted as an agent for international oil companies to his personal company Aikon Ltd. The dispute was settled out of court.

8. Farrugia Dossier

In August 2011, a dossier on Mr Farrugia’s dealings found its way to the Security Service. Invoices and e-mails contained in the dossier allegedly showed the payment of commission on oil sales to Enemalta.

9. Tax investigation

In 2011 the secret service asked the Tax Compliance Unit to investigate Aikon Ltd for tax evasion.

The files were passed on to TCU via the Finance Ministry. Mr Fenech has denied knowledge of the information contained in the file passed on by the Security Service.

It is unclear what the Security Service did with the rest of the information available in the dossier.

The TCU investigation is still going on. Initially the TCU could not arrive at Mr Farrugia directly because Aikon Ltd was registered under a fiduciary trust run by a company that included former Labour Party treasurer Joe Cordina and former PN candidate Martin Fenech.