[attach id=266662 size="medium"]Rogue trader George Farrugia. Photo: Chris Sant Fournier[/attach]
Enemalta awarded the majority of oil contracts to two companies represented by rogue trader George Farrugia, an audit investigation has confirmed.
The fuel procurement committee awarded Totsa – a subsidiary of the French oil giant Total – and Dutch company Trafigura 17 of the 30 contracts it negotiated in the period 2008 and 2011.
According to the National Audit Office’s investigation, Totsa won 15 bids, ahead of BB Energy, the second-best placed company, which won seven contracts.
Mr Farrugia, the Maltese agent for the two companies, was granted a presidential pardon this year to tell all after the police accused several Ene-malta officials of receiving lucrative commissions to favour particular oil companies.
The treatment afforded to Totsa and Trafigura by Enemalta fuel procurement officials had already surfaced during court proceedings, which are currently ongoing.
Although the Auditor General did not draw a link with the oil scandal, the investigative process did highlight at least two cases where Totsa’s bid was chosen even though it was not the most advantageous one.
In June 2008 Totsa was awarded the tender for the supply of aviation fuel even though two other companies submitted more favourable bids. The National Audit Office could not determine the reason for this decision because no records of the fuel procurement committee’s discussions or workings were retained on file. The second incident happened in January 2009 when Enemalta chose to negotiate with Totsa even though another firm’s bid was initially more favourable.
No formal record of who formed the procurement committee was forwarded to the NAO
Once again, Enemalta’s decision was not adequately explained.
“No record detailing or explaining this course of action was made available to the NAO, barring a brief explanation submitted by Enemalta regarding credit terms,” the Auditor General noted.
The NAO investigation into how Enemalta bought its fuel requirements was started two years ago by Labour MP Leo Brincat, who called for it in Parliament.
In a review of the state energy company’s fuel procurement committee, the Auditor General criticised the lack of proper minute-taking and record keeping before 2011 when changes were made to the way it functioned.
The wide-ranging report spread over 336 pages includes a sample of the hand-written minutes from a meeting that was to decide on the award of a fuel supply contract.
Barely legible, the minutes, written on what appears to be a ruled copybook, include doodles and make no reference to the people present for the meeting and what was discussed.
As a result of the poor record keeping the Auditor General was unable to determine who the members of the fuel buying committee were during the four-year audit period as the level of detail provided by Enemalta was “sparse”.
“No formal record of who formed part of the fuel procurement committee was forwarded to the NAO, and the information gleaned in this regard was largely based on what one of the committee’s longest-serving members recalled,” the Auditor General said.