Cabinet changes appear to be on the cards amid reports that the Auditor General’s inquiry findings into the Gaffarena Valletta property deal are expected to be tabled in Parliament on Wednesday.
The National Audit Office investigation started after the Times of Malta last May exposed an expropriation scandal involving businessman Mark Gaffarena, who partly owned a building in Old Mint Street, Valletta.
This was the second inquiry in the case. The Prime Minister had ordered the Internal Audit and Investigations Department, which falls under his office, to look into the matter too. This inquiry has already been completed, though its findings have not been published.
According to leaked information, the investigation has concluded that the deal breached expropriation rules, thus empowering the government to nullify the deal.
PM may want to pre-empt findings
While no commitment has yet been made by the government, which said it preferred to wait for the NAO conclusion, government observers said the Prime Minister was considering changes to the Cabinet to pre-empt the findings.
The main focus of the findings is on Planning Parliamentary Secretary Michael Falzon, who signed off on the deal.
The government paid €1.65 million for part ownership of the Valletta property that Mr Gaffarena had bought for a fraction of the price just weeks earlier. He made a profit of €685,000 in less than two months, apart from acquiring parcels of land in exchange equivalent to the size of more than 10 football pitches.
He had sealed two deals with the government on the same property before this newspaper exposed the pattern that halted further transactions on the property.
When the owners of the rest of the building became aware of the trend from media reports, they stopped further deals. Had the deal gone ahead, Mr Gaffarena could have earned a minimum of another €1.65 million.
The government bought half of the building in Valletta, a total of 445 square metres, which Mr Gaffarena owned.
This newspaper had revealed that Mr Gaffarena attempted to acquire the other half from third parties, probably to then sell them to the government.
So far, the government did not say why it failed to expropriate the other party of the property directly from the owners rather than wait for Mr Gaffarena to acquire them.
Evaluations made by independent architects commissioned by this newspaper indicated that the value of the land Mr Gaffarena was given in return for the expropriated property in Valletta - areas adjacent to properties he already occupied – were worth at least double the official evaluation.
Despite the controversy, people informed this newspaper that Mr Gaffarena remained a regular visitor at the Land Department. They said he could be seen there once or twice a week, usually meeting the same director.
caroline.muscat@timesofmalta.com
Timeline
December 18, 2007: Mark Gaffarena buys a quarter of the Valletta property for €23,294.
January 22, 2015: The President declares expropriation of a quarter of the property.
January 28, 2015: The government grants Mr Gaffarena €822,500 in land and cash. Independent architects value the land as worth at least double that sum.
February 26, 2015: Mr Gaffarena buys a second quarter of the property for €139,762.
April 8, 2015: The President declares expropriation of a quarter of the property.
April 10, 2015: The government gives Mr Gaffarena another €822,500 in land and cash. He makes a profit of almost €685,000 in less than two months.