Former Prime Minister Lawrence Gonzi tonight was questioned by the Public Accounts Committee (PAC) on the Enemalta oil procurement scandal.

Reading out a written statement, Dr Gonzi said he first heard of the bribery allegations through the media in January 2013.

He said he realised that the investigation would not be easy as the kickbacks began before he was Prime Minister.

He instructed then Police Commissioner John Rizzo to investigate the allegations.

(John Rizzo)

He denied ever receiving a dossier from the Malta Security Services about these kickbacks. Had such a file been received it would have been investigated, he said.

Asked if Enemalta officials approached him about irregularities in oil procurement between 2004 and 2008, Dr Gonzi said this was not the case.

The former Prime Minister said he only heard of alleged wrongdoing at the state-owned bunkering company MOBC when it was mentioned in Parliament by Opposition MP Leo Brincat. He said the minister responsible for Enemalta at the time had Mr Brincat to pass on the information to the police. 

There was more focus on the oil procurement process from 2008 onwards in light of spiralling international oil prices, Dr Gonzi said.

Dr Gonzi said he consulted with international experts and proceeded on their advice when it came to oil procurement at Enemalta. 

He said he never got into the technical nitty-gritty of the process.

He said police investigations have shown that the kickbacks stopped towards the beginning of 2005, prior to him becoming Prime Minister.

This was due to steps being taken in order to introduce more checks at Enemalta as well as new people being employed at the corporation.

He called it logical that the abuse stopped due to these measures. These changes were not made due to him becoming aware of any wrongdoing, he said. 

Then Enemalta Chairman Tancred Tabone was not removed due to any such allegations, he said in reply to questions by the Justice Minister. 

(Tancred Tabone)

Pardoned oil trader George Farrugia paid a number of kickbacks to Enemalta officials under the previous government.

“I knew the Farrugia family but I had no close connection with him,” Dr Gonzi said in reply to a question about his relationship with Mr Farrugia.

He said he knew Mr Farrugia’s wife as an employee with the Mizzi group, where he used to work.

Dr Gonzi said he was not aware that Mr Farrugia gave certain “gifts” to the Nationalist Party. 

(George Farrugia)

The pardon was granted on Dr Gonzi’s advice.

Dr Gonzi said he was advised to call a Cabinet meeting on the presidential pardon, as the Constitution states the President has to act on the Cabinet’s advice.

He said at no point were there any suspicions that one of his minister’s may have been involved in the case. 

The former Police Commissioner told Dr Gonzi that Mr Farrugia started to give more details about the case the day after he was granted a presidential pardon. 

It was Mr Rizzo who suggested offering the pardon, Dr Gonzi said. 

Tourism Minister Edward Zammit Lewis challenged Dr Gonzi on this point, pointing out that Mr Rizzo stated that the suggestion of a presidential pardon came from Castille. 

Dr Gonzi said he first floated the idea of a pardon in comments to the media. Mr Rizzo then took up this suggestion in reaction to his comments, Dr Gonzi said. 

During a previous PAC sitting, Police Inspector Angelo Gafa, one of the police's top prosecutors, who, until June 10, 2013 was the head of the Economic Crimes Unit told the PAC that they learnt that oil trader George Farrugia was to be given a presidential pardon from an online report while Farrugia was in their custody and none of the investigating team were told in person beforehand.

The investigating team comprised of then Assistant Commissioner Michael Cassar, Superintendent Paul Vassallo and Gafa. At times, during the investigation, then police commissioner John Rizzo formed part of the investigation as well.

"I received a telephone call from Farrugia's lawyer, Franco Debono, who told me that his client might consider the offer of the presidential pardon.

"We never had a case against Farrugia but when he was given a pardon he started to spill the beans but if the pardon hadn't been given to him, a number of persons would not have been arraigned," he said.

Testifying today, Superintendent Paul Vassallo said he had never heard of any irregularities in Enemalta oil purchases prior to the story breaking in the media back in January 2013.

Mr Vassallo said he never saw any reason to question the oil trader’s wife, Cathy Farrugia. 

Asked by Justice Minister Owen Bonnici if the presidential pardon led to more information being uncovered, Mr Vassallo said in his opinion it was not a total mistake.

“We need to crack an egg to make an omelette...

“When the balloon was popped unfortunately there was not much behind the pop,” a metaphor-laden Mr Vassallo said. 

Mr Farrugia had more to lose if he did not abide by the conditions of the pardon and tell the whole truth, he said.