Updated at 11.30am with videos
PN leader Simon Busuttil rejects the claim that his party used false invoices to charge money meant as a donation from businessman Silvio Debono’s companies.
You have been accused of meeting Silvio Debono soon after becoming leader in 2013 to ask him to help the PN financially. Mr Debono’s company, db, claimed you specifically asked him to cover the wages of the general secretary and later the party CEO. What do you answer for this?
This week we had a political earthquake because I refused to be blackmailed. I had announced the Opposition would be objecting to the ITS land transfer deal and take the matter to the Auditor General. Sometime afterwards, I received an SMS from Mr Debono’s CEO to return the donations [that the company made to the PN]. This was the first time in the history of this country that the head of a political party ever said something like this: I was not ready to be bought. When I received that SMS, I felt something was wrong. The donations, which the party lives on and receives from everyone, should never be a way of shutting me up. This is the context.
This is the context [now] but some believe the wrong thing had happened four years earlier.
No, it did not happen four years earlier. Political parties live on donations. The law regulating political party financing makes it clear that parties can accept donations. If they do not accept donations, the political parties in this country cannot survive. To receive a donation is not only necessary but also legal. What should not happen is to allow a donation to shut you up. This is the point I would like to get across: I will not keep my mouth shut because of a donation, and this is the true political earthquake that happened this week.
The accusation is very specific: you personally, and other officials in the party, asked Silvio Debono to finance the [officials’] wages and this was done through invoices issued by Media.Link. If this is what happened, the invoices are false.
No, the invoices are not false. The donations were made to the party – we released the figure of €3,500, while the db Group said it was around €6,000, which means there may have been donations made to the sectional committee in Mellieħa. The bigger amount, around €70,000, was given to Media.Link as part of commercial transactions between both companies. It was a commercial relationship. The party financing law applies to the parties and not private companies. Debono is not correct when he says he paid the wages of the general secretary and Media.Link CEO. I have here [shows the documents] the FS3 [tax form] of the current general secretary, Rosette Thake, showing her wage is paid by the party, and that of Brian St John, clearly showing that his wage came from Media.Link. The idea that someone specifically paid for their wages is incorrect.
Let us not get lost in semantics. The accusation by Mr Debono’s company was that you asked him to cover these wages as a result of the party’s financial difficulties soon after you became leader. The scheme was for the party to issue invoices through its company. Silvio Debono is insisting the commercial relationship does not exist; there is no advertising to show for it.
It exists, because there are in-voices and VAT was also levied. But this is not the point. Every donation made to the party goes to finance its operations, which includes activities and salaries. Everyone can say they are contributing to the salaries of party officials. As long as the donations system is in place, this will always be the case. But for someone to give the impression that it was he who issued the paycheques for Brian St John and Rosette Thake is absolutely incorrect.
Is the party ready to publish the details of this commercial relationship [between Media.Link and the db Group]? How many minutes of advertising were purchased by the Seabank and other subsidiary companies on Net TV, Radio 101, the web portal and newspapers?
A commercial relationship bet-ween two companies is, by its very nature, private. But we said it was a commercial relationship, gave the amount involved and said VAT had been paid on it. We have no difficulty if Silvio Debono’s company wants to publish these invoices but until they do, we believe a commercial relationship should remain private.
The invoices represent the paper trail, but Seabank [db Group] said it did not take out advertising, definitely not to the tune of €70,800.
Let us for argument’s sake say that Seabank paid for the wages of the general secretary and Media.Link CEO, something we categorically deny. It continues to show how I am not bought, because I still came out against this project [the ITS land transfer]. This is the point. You are interviewing someone who has objected to the transfer of public land for €15 million, when government’s own estimates had valued it at some €212 million [based on the figures in the Paceville master plan]. The real question is why land that was worth so much gets transferred for only €15 million. If the PN took donations but still objected to the transfer, what did those who transferred this land get in return? These are the real questions.
I will not keep my mouth shut because of a donation, and this is the true political earthquake that happened this week
These real questions were asked by The Sunday Times of Malta in July last year when industry sources flagged the possibility of ITS land being sold off on the cheap. At the time, we heard rumours the site was going for €6 million. Doubts about this contract were already expressed months ago, and yet the PN remained silent for a whole year.
When it was first announced that Seabank had been chosen, the PN said that while it agreed with a project in that area, it raised two concerns: the value of the land and access to the foreshore. The second concern was cleared immediately, because the government said access to the foreshore would be maintained. On the first concern, the government announced it was commissioning an independent audit. Last month, the deal was presented to Parliament, and at that point, the government side told us the transfer was worth €60 million. It was only after, when we entered into the details of the contract that we found out that the €60 million… turned out to be €15 million.
I am informed you had three meetings about the ITS project with Silvio Debono, one of them, already mentioned by you last week, a few days before the contract was signed.
Around a week before the deal was signed and the government came to Parliament, we were given a detailed presentation by the company. During this meeting I raised questions about the value of the land… I have no difficulty meeting with anybody. I met with [the db Group] and others. Meeting people is good: it enables you to hear all sides. I am not at war with Silvio Debono. My interest is to safeguard what belongs to the public… I could have kept my mouth shut and said nothing about the SMS but this was a red line. I cannot allow myself to be threatened in this way.
Can it be that this attack by Silvio Debono is coming from someone who may have been given a different impression over the past four years?
No, absolutely not. And it is not correct to imply this, because the fact remains that I came out against the transfer. Despite me having listened to both sides and having accepted donations [from db], the fact remains that I took this case to the Auditor General. This is the defining point.
People look at this situation and say, ‘what did Simon Busuttil ask of Silvio Debono throughout these four years in financial terms’?
Until last Sunday, the party was asking everyone to donate money, and we collected €266,000. We are always open to donations, because we survive on donations.
But you sought him [Debono] out.
Absolutely not. I do not go out asking people specifically to come here… If someone asks for a meeting to inform me that he is willing to help, my answer is yes, so long as the person does not try to shut me up. Let’s not try to say donations are illegal, because the law allows them.
Nobody is saying donations are illegal. But €70,800 is illegal if it comes as a donation. In this case, the accusation is that it is being masked as a commercial transaction.
We are safely in line with the party financing law, because it does not apply to private companies but political parties. If there is someone who has big problems with the law, it is the Labour Party. It has not registered yet as a political party. The Labour Party has not yet given details of the donations it received last year like we have done. Labour’s highest officials are being paid by the State, which is illegal according to this law [shows a list of Labour officials and media personnel remunerated by the State while being in the party’s employ]. Furthermore, what donations has Labour received from Silvio Debono?
The question remains whether the commercial relationship worth €70,800 was truly a commercial relationship of a company that was advertising with the PN’s companies or was it money making its way to the party through false invoices?
It was a commercial relationship that was registered, to the point that VAT was paid on the amount. More official than this it cannot be… any notion, as suggested by Joseph Muscat, that this is fraud and money laundering is absolutely a lie. More so, the law on party financing does not apply to a commercial company. The focus of the law is the political party and the PN took nothing from Silvio Debono that can put it at odds with the law.
Are you saying the €70,800 was advertising?
It was a commercial relationship linked to programming on Net TV and Media.Link.
Some argue the law on party financing should change to include the commercial companies that belong to the parties, because this is an intelligent way of going round the law.
It is not a question of going round the law but sticking to it. When we introduced the ċedoli scheme, we made sure it was legal. Owen Bonnici initially claimed it was illegal, but today he admits it is legal.
Does the ċedoli scheme not go against the spirit of the party financing law? We do not know who the people loaning you money are.
If the political parties do not accept donations, and with the ċedoli scheme these are not even donations but loans, with a commercial interest rate of four per cent, they can close. In the financial situation I found the party in, I did not have the luxury to turn down donations. Whatever the donations are, will I allow them to buy my silence? My answer is no… Let’s use this case as an opportunity to change the system once and for all. This is why this week I set up an independent commission led by Judge Giovanni Bonello to study and come up with proposals on party financing and also of politicians.
If you really wanted a clean sweep, why wasn’t this commission one of the first initiatives you took when becoming leader?
The Prime Minister promised a law on party financing, but when he came to introduce it, he decided to keep the old donation system. This law, which I agreed with, legalised donations. In Parliament, we said donations raised question marks, and this is not something I am happy with. Should we change the system to one dependent on State subsidies?
You do appreciate the irony here. When the PN was in government, it opposed the State financing of political parties.
It was wrong. Now that I am in it, I know what it means to operate a political party only on donations and all the question marks they raise – it is a situation that boils down only to your credibility. Just imagine someone who did not have the integrity to stand up to the ITS deal and kept his mouth shut about it… You are right in asking me why now and not four years ago, but this was the first time I received a threatening SMS.
Will you return Silvio Debono’s money?
I was very angry, and I said if this is dirty money, then he can take it back. But when we discussed the matter internally and reflected on it, we asked ourselves why we should return something that was legal. By giving it back, we would be sending out the message that we may have done something illegal, when this was not the case. We are ready to defend our position in front of the Electoral Commission.
Are there any other businesses helping the PN in the same way?
No, this was the only case of a company that had such a commercial relationship, which has now obviously ended. The party receives donations from individuals, families, professionals and also businesspeople. From these donations, some €900,000 last year consisted of contributions worth €50 or less.
Do you feel this case has chipped away at the image you have tried to build of a party that stands for good governance and honesty?
I believe it has strengthened it, because those who followed what happened could say that Simon was the first one to say no to someone who wanted to shut him up. This has never happened.
Interview with the Prime Minister
The Sunday Times of Malta would like to put on the record that it has made a number of requests to interview Prime Minister Joseph Muscat, going back to late November 2016. He has not yet accepted. The invitation is still open.
PL statement
In a statement, the Labour Party said the interview continued to confirm that Dr Busuttil did not know the meaning of the word truth.
In the interview, he opted to push aside the truth and continued to lie blatantly to cover up the illegalities being carried out by his party.
He lied blatantly when he said that the illegal donations received by his party from the db group, which ran into hundreds of thousands, were because of commercial relations with the PN’s media.
It was Dr Busuttil himself who asked for donations and came up with a scheme of fictitious invoices. It was now known there were other sources of donations, the PL said.
In the case of the db group, the donor denied that this was a commercial relationship and said that this was a case of donations that had been requested by the PN to cover the wages of the general secretary and CEO.
But the worst lie was when Dr Busuttil said that party financing legislation did not apply to commercial companies. The first page of the law said exactly the opposite.
A donation was all benefits received regarding the activities or functions of a political party or on its behalf by a member of a party, a candidate or organisation, whether corporate or not, in which a political party directly or indirectly exercised effective administration and control.
Dr Busuttil was fake when caught with his back to the wall. Rather than continue to lie, he should publish all invoices between the PN media and the db group and cooperate with the Electoral Commission in its investigation on the illegalities carried out by his party, the PL said.