The GWU headquarters on South Street, Valletta. Photo: Darrin Zammit Lupi

Former GWU general secretary Tony Zarb refused to name the “pertinent authorities” who told him that leasing parts of the union’s headquarters could go ahead despite being in breach of a contract.

A report by the Auditor General found the GWU guilty of breaching a contract with the government when it leased parts of its Valletta headquarters to third parties, including the government’s utility body ARMS Ltd.

Mr Zarb told the Land Commissioner in a telephone call not to cause any problems because “the pertinent authorities were aware of this matter” and that the request should be approved.

However, the Land Commissioner, who has since resigned, told Mr Zarb he could not approve the request as it needed parliamentary approval.

According to the NAO, Mr Zarb did not name the “pertinent authorities”.

“Notwithstanding the numerous attempts made by the Office [NAO] to establish who the authorities referred to were, the GWU general secretary and the former commissioner of land did not provide this information,” the NAO said.

“While the GWU general secretary failed to reply to all correspondence sent by the NAO, the former commissioner of land claimed that he could not recall whether Mr Zarb had informed him of their identity.”

Both the principal permanent secretary, Mario Cutajar, who held the post of GWU deputy general secretary, and Planning Parliamentary Secretary Michael Falzon, responsible for the Land Department, denied that Mr Zarb had been referring to them.

Contacted by this newspaper yesterday, Mr Zarb refused to divulge any names and insisted he had nothing to say.

“I am not going to tell you anything. When it’s the appropriate time I will say who told me,” he said.

While stating that he had not read the whole report yet because he was in Brussels, Mr Zarb said he would take the “necessary steps” if the NAO had said anything about him which was not correct.

The GWU dismissed the NAO’s conclusions and said its legal advice was contrary to that of the Attorney General and the NAO with regard to the lease.

According to the NAO, however, Attorney General Peter Grech should consider instituting legal proceedings against the GWU for breach of contract.

“I am looking at the report and it is still too early to say what action to take. However, nothing is excluded at this stage,” Dr Grech told the Times of Malta.

On the political front, the Opposition yesterday said that political responsibility for the latest “lands scandal” fell squarely on the Prime Minister’s shoulder.

Addressing a press conference, shadow justice minister Jason Azzopardi accused Joseph Muscat “of becoming synonymous with every public land scandal under his administration”.

Recalling the Café Premier bailout, the Gaffarena Old Mint Street debacle and the repossession of Australia Hall in Pembroke by the Labour Party, Dr Azzopardi said the Prime Minister bore full responsibility because the Land Department was part of his portfolio.

He challenged Prime Minister Joseph Muscat to take action following the NAO’s conclusions and stop the illegal contract between a government company, ARMS, and the GWU.

“If he is serious, Muscat should stop paying €60,000 a year of taxpayers’ money to the GWU for an illegal contract,” he said.

PN spokesman Ryan Callus said that, following the latest damning report, the government had no option but to proceed with legal action against the union.

Highlights

The GWU headquarters occupies the Workers Memorial Building, the site of the former Auberge de France, in South Street, Valletta.

• In 1957, the government signed a contract with the union, granting the site for ‘trade union matters’, on a perpetual emphyteusis for an annual ground rent of €801.

• In 1997, the government amended the deed, allowing the union to lease the building to companies in which it had at least 51 per cent shareholding.

• In April 2014, ARMS leased 350 sq.m. of office space from the GWU, paying the union €61,950 a year for five years. According to the NAO, this was in breach of the 1957 and 1997 contracts with the government.

• No documentation was found at ARMS showing either when or how the GWU was informed that its bid had been accepted. “The ARMS Ltd acting CEO informed this office (NAO) that no correspondence to this effect could be traced and that the GWU was verbally notified of its selection.”

• The Permanent Secretary at the Office of the Prime Minister, Mario Cutajar, told the NAO that he had not taken any action, as he was unaware that ARMS Ltd were operating from the Workers Memorial Building.

“Of interest was the claim made by Mr Cutajar when stating that he first became aware of ARMS Ltd’s occupation of part of the GWU’s premises during his meeting with the NAO, that is, on July 15, 2015.”

“The NAO finds difficulty in understanding how the Permanent Secretary remained unaware of the fact that ARMS Ltd was actually occupying part of the Workers Memorial Building despite the considerable press coverage on the matter.” Incidentally, Mr Cutajar worked at the GWU HQ as its Deputy General Secretary for over 10 years.