The Prime Minister will attempt to reclaim the public assets given to Mark Gaffarena in the controversial expropriation of a Valletta property if any wrongdoing is established, a government spokesman confirmed.
Joseph Muscat has asked the Attorney General what legal options are open to the government should the two investigations into the scandal revealed by this newspaper expose fraud or corruption.
The deal is also likely to be contested if it emerges that the value of public land given to Mr Gaffarena exceeds 30 per cent of the value of the expropriated land.
Pressure has been mounting since The Sunday Times of Malta revealed the €1.65 million expropriation of half a property in Old Mint Street from Mr Gaffarena in two separate contracts earlier this year (see graphic).
On the second sale, Mr Gaffarena made a profit of €685,000 just a few weeks after buying a section of the property.
He was also given land that suited his commercial needs valued at half its worth. Asked whether Dr Muscat had acknowledged wrongdoing by seeking legal advice, his spokesman said: “The Prime Minister has already said in Parliament there were a number of questions for which he was seeking answers.
‘PM acknowledges that the case stinks’
“This is a commitment that the government will take all necessary action to ensure the right thing is done.”
Reacting, the Opposition said this move was unprecedented. “It’s an acknowledgement by the Prime Minister that this case stinks,” said shadow justice minister Jason Azzopardi.
Questions have been raised over the unusual expropriation of the property, which allowed Mr Gaffarena to first acquire two sections of a property before the government showed an interest in them, and the undervaluation of the land he was given in return.
The Opposition said that while Planning Parliamentary Secretary Michael Falzon had approved the deal on behalf of the government, the Prime Minister was ultimately responsible for the actions of the Government Property Division.
Dr Azzopardi added that Dr Falzon could not hide behind the architects who carried out the land evaluations because they were not the ones who decided what land should be given to Mr Gaffarena. According to conservative estimates by independent architects commissioned by this newspaper, the land given to Mr Gaffarena in return for the expropriation of part of the privately-owned Valletta property is worth at least double the valuation attached to it by the government.
Yesterday, Times of Malta also revealed that the family who sold their part of the Valletta property to Mr Gaffarena face a hefty tax bill amounting to more than the sale price.
The Commissioner of Inland Revenue has already appointed an architect to inspect the property. The bill the family faces when the tax man calls is €122,000 plus penalties and interest.
They sold the area to Mr Gaffarena for only €139,762.
Since the government bought it only a few weeks later for €822,500, taxes are due on the difference.
Otherwise, the implication is that government overpaid for the property.
Tonio Mercieca, the original seller who said he was seeking justice, has the option of initiating a court case to address wrongdoing.