Security service is probed by police

Police are investigating the alleged disappearance of documents indicating corruption at Enemalta after they were passed on to Malta’s intelligence agency in August 2011.

The unprecedented investi­gation into the Malta Security Service (MSS) has been going on for the past few weeks.

The probe was triggered by revelations in The Sunday Times last month that the Government received a tip-off in relation to alleged tax evasion by oil trader George Farrugia, who was recently given a presidential pardon to reveal all he knows about the oil procurement scandal.

Former Finance Minister Tonio Fenech had confirmed that his ministry was tipped off about Mr Farrugia but insisted the information only involved documents indicating tax evasion.

These documents were passed on to the Tax Compliance Unit. The unit launched an investigation, which is still going on.

However, Mr Fenech also revealed that the information came from the MSS.

The Times is reliably informed that the service received a detailed dossier containing invoices and damning e-mails to and from Mr Farrugia in August 2011 and that only a part of that dossier was passed on to the Finance Ministry.

High-level sources said the agency, whose primary area is national security, is unlikely to have investigated corruption itself as it does not have the expertise or set-up to investigate corruption and money trails.

“The service deals with anti-terrorism, national security and organised crime and does not really have the assets to deal with this sort of investigation,” a source said.

Asked if the service could have passed on the documents to the police for investigation, the source simply pointed to the entrenched institutional rivalry between the MSS and the police.

In fact, there is no indication that any documents were passed on to the police.

The investigation by the police Economic Crimes Unit, which has so far led to four people being charged over kickbacks on oil tenders, was initiated after Malta Today broke the story on January 20. Moreover, it only took a month or so for the first people to be arraigned.

The man who was in charge of the MSS at the time, Godfrey Scicluna, coincidentally suspended himself as the oil scandal story unfolded towards the end of February, after the police issued criminal charges over an unrelated traffic accident in which an elderly man was injured.

In his stead, the outgoing government appointed Francis Sciberras, the former deputy head of the service.

The twist adds a new dimension to an already complex issue that started in 2010 with a family feud between Mr Farrugia and his brothers, who own the John’s Group of companies.

That year, the brothers sacked George from the group’s oil trading company after they accused him of siphoning off the family’s business into his own firm.

After the breakup, they commissioned IT consultants to scour Mr Farrugia’s office computer and that of his wife Cathy and discovered hundreds of e-mails and invoices that pointed to the fraud.

The investigation also uncovered the evidence that enabled the police to make the recent arraignments.

Part of this evidence, showing that Mr Farrugia was defrauding the family business, was used in a civil lawsuit that ended in an out-of-court settlement.

It is understood that someone close to the family delivered the rest of the evidence to a member of the Security Service.

So far the police have arraigned four former Enemalta officials in connection with the kickbacks: ex-chairman Tancred Tabone, his one-time adviser Frank Sammut, the former financial controller Tarcisio Mifsud, and a former member of the oil procurement committee, Alfred Mallia.

Another two businessmen, Anthony Cassar and Francis Portelli, were also arraigned although their charges have nothing to do with the kickbacks on oil tenders but relate to a tender for the leasing of a barge to the state-owned bunkering company MOBC.

[email protected]