Yesterday’s Public Accounts Committee session which dealt with the Auditor General’s report on Voice of the Mediterranean turned into a veritable nightmare for former Permanent Secretary Gaetan Naudi as he received what can only be described as a true grilling by the Labour MPs on the committee.

Mr Naudi continued where he left off on Wednesday pleading ignorance of what was going on at the station during his tenure as PS, a stance which greatly irritated PAC Chairman Charles Mangion especially with regard to certain expenses for furnishing of the premises that reached astronomical levels.

Beginning the session, Labour MP Leo Brincat said that he asked Mr Salv Gauci from the Ministry of Finance whether due to sanctions on Libya, VOM’s ownership structure had changed with the Maltese government taking over a majority stake in the company.

He tabled documents which showed that the Maltese government did indeed have a 51 per cent stake at some time with Parliamentary Secretary Tonio Fenech asking whether this document had been leaked from the Auditor General’s office. Mr Brincat said that this was certainly not the case.

Mr Fenech said that it was clarified beforehand that the government did not own a controlling stake in the company but simply paid out its contribution on a 50/50 basis and this did not have an effect on whether government financial regulations applied.

Asked by Dr Mangion, Mr Naudi said that he authorised payments to VOM but these were effectively transferred by members of his staff. He said that he had never actually intervened in the operations of the radio station adding that he never had any negative reports on the situation at VOM.

Mr Naudi said that VOM councilor Alfred Zarb had told VOM managing director Richard Muscat to observe the government regulations with regards to employment and financial considerations. He said that he could not confirm that Mr Muscat was observing these regulations adding that he never gave instructions for government regulations to be implemented in this regard.

Mr Brincat asked Mr Naudi why the Auditor General had noted in his report that the VOM councillors did not have proper guidance on how to conduct their operations and whether this was a serious lapse of conduct on his part. Mr Naudi said that he never had any occasion to peruse the guidelines with regards to the station.

Mr Fenech asked whether former Foreign Minister George Vella had asked for any guidelines to be applied to VOM with Mr Naudi responding in the negative. At this point, an OPM representative was asked by Helena Dalli what the was role of a Permanent Secretary with the latter stating that he could not define what this role was.

Mr Naudi said that he was never aware that the government’s contribution amounted to over 50 per cent of the total contribution to VOM. He said that he came to know about certain situations at VOM after reading the Auditor General’s report as he was not aware of them during his tenure as Permanent Secretary.

Mr Brincat asked why Mr Naudi had been rather apologetic in defending Mr Muscat, attributing the latter’s actions to over zealousness. Mr Naudi said that he never had any instructions to let someone off the hook on VOM and that the board of councillors had congratulated Mr Muscat on the move of the station from Floriana to Birkirkara.

Mr Naudi also confirmed that he had renewed Mr Muscat’s contract in June 2003 although the Libyan government had never given any indication that the outstanding payments would eventually be made.

Dr Mangion asked which assets pertaining to VOM had remained by the end of 2003 particularly which items were sold and what was recouped in cash. Mr Naudi said that the IT contract for the station included a number of services for which a person had to be practically present at the station round the clock adding that he had not gone into the merits of how much the contract was worth. He also confirmed that most of the furniture was donated to the Richmond Foundation.

Dr Mangion also questioned why the quotations for firefighting equipment and security doors had increased astronomically in their value, with Mr Naudi stating that he was not aware of any irregularities in procurement.

Ms Dalli asked why the Managing Director’s son was employed with the station and on what terms this employment had taken place. Mr Naudi said that he only learned that this person ended up without work after the station wound up only a few weeks ago.

Mr Naudi explained that after the station wound up, a list of creditors was made and those employees who were to receive severance benefits were also compensated. Mr Brincat said that the station accountant was in the possession of signed blank cheques as creditors were putting pressure on the government.

Mr Naudi categorically denied that he had ever ordered the station to settle with those creditors who were putting pressure to have their dues settled. Auditor General Galea and his assistant Charles Burlo’ said that it was Charles Mifsud who had stated under questioning that certain creditors were putting pressure on the station and the board had opted to settle.

Mr Mifsud said that he did not give instructions for creditor’s payments to be settled on the basis of pressure. Asked on the blank cheques situation, he said that these were eventually passed over to the Auditor General.

Mr Brincat asked if the department was aware that the part time accountant had paid himself terminal benefits with Mr Mifsud stating that he was not aware that part timers were not entitled to such benefits. Mr Burlo’ said that the AG’s office had sought advice from the Social Security Department who confirmed that the part timer was not entitled to any terminal benefits.

Mr Mifsud also confirmed that the accountant was actually listed in the payroll after a question by Mr Fenech.

Asked on how the company cars were sold by direct order, Mr Naudi said that the department was not aware that the cars had been changed. Former VOM councilor Alfred Zarb said that he had been informed by Mr Muscat that a good deal had been made in regard to the vehicles.

Mr Brincat also asked on Mr Muscat’s hospitality expenses where there were serious allegations of abuse according to the AG’s report. Both Mr Mifsud and Ms Cecilia Attard Pirotta confirmed that no action had as yet been taken to recoup these expenses.

Asked whether there was a board decision to apply government financial regulations, Mr Zarb said that this was not the case but he had insisted that these standards be applied on a personal initiative. He said that the ministry had also created an internal board composed of himself, Joanna Darmanin, Mannie Spiteri, Joe Izzo and Richard Muscat to take care of Maltese interests in the station.

Mr Fenech asked whether the Foreign Affairs Minister had issued an order to apply government financial regulations to the station. Mr Zarb said that there was no direct decision but the internal board had recommended that these regulations should be applied whenever possible.

Mr Zarb confirmed that he had suspended two payments in 1996 due to the fact that the Deutsche Welle transmitter had closed down and the station was not operating. He said that he had never suspended payments during Mr Muscat’s tenure.