The government has in the past couple of years actively avoided Nexia BT, even when the audit company won tenders like any other company, on the basis that the company had become “toxic”, Brian Tonna claimed on Wednesday.
Speaking at parliament’s Public Accounts Committee for a third week in a row, Tonna cited one such example where Nexia BT – the audit firm embroiled in scandals such as the Panama Papers – had won a tender with the Education Ministry for an internal audit, and right before the contract was going to be signed, the ministry changed its mind and opted to do it in-house instead.
“And you attribute this to simply because you were Nexia?”, PN MP Karol Aquilina questioned Tonna – to which he replied with a nod.
“We were toxic. That’s the word. Toxic”, Tonna said.
He said that the company became considered as such because of its role in the Panama Papers scandal.
“We became toxic because we provided a service to the minister [Konrad Mizzi] and chief of staff [Keith Schembri], and maybe nine or ten other clients. Those who gave a similar service to 50 to 70 companies were not mentioned – but from then on, we became politicised”, Tonna said.
Tonna was talking about what was released as part of the Panama Papers scandal, where it was revealed that then Minister Konrad Mizzi and then OPM chief of staff Keith Schembri owned a company in Panama – named Hearnville and Tillgate respectively – and that it had been Nexia BT who had set them up.
The owner of a third company called Egrant was never named, but Daphne Caruana Galizia had reported in 2017 that it had belonged to the wife of Prime Minister Joseph Muscat, Michelle Muscat. A magisterial inquiry later found that there was no evidence to indicate that this was the case.
“Egrant was one of the four we bought as shelf companies. It remained a shelf company, and it was closed as a shelf company. I gave all the documentation to all the media houses and to the magistrate who concluded that Egrant was and remained mine. I don’t understand why we are still talking about Egrant up till this day”, Tonna said.
He apologised for getting worked up over Egrant, but noted that an election was called and the government was almost brought down because of it. “To see something so ridiculous blown up like this…”, he lamented.
“This is where the media isn’t fair – because when I gave them things they didn’t like, they didn’t print them. The inquiry established clearly that Egrant remained unassigned”, Tonna said.
Aquilina then quoted an email dated 25 March 2013, where Karl Cini – Brian Tonna’s Nexia BT partner – was in contact with Mossack Fonseca and told them that he would tell them the owner of Egrant over Skype.
“I am 100% certain, he was going to say it was mine”, Tonna said.
“The four companies were not intended for anybody. Hearnville and Tillgate were given two and a half years after I bought them – it’s clear they weren’t intended for anybody particular when we bought them. But the media decided that they were intended for someone”, he said.
“But they did end up at someone”, Aquilina and committee chair and PN MP Beppe Fenech Adami retorted: “My company ended up closed because of this – that’s what happened”, an annoyed Tonna clapped back.
During the meeting – which in actual fact was meant to be on the Auditor General’s report into to the awarding of the Electrogas power station – Tonna was also questioned about his ties to the Office of the Prime Minister.
He said that he was engaged as a consultant, “like many other people from other companies”, between 2013 and 2015 – when he stopped because he felt that he was falling back on work related to his own company.
He name-dropped a number of major audit firms such as Deloitte, PwC, Grant Thornton, and RSM as examples of such companies.
He denied that he had some sort of fixed office at Castille, saying that there were four rooms at the ground floor which used to be reserved for when consultants needed to do some meetings or do some work there. One would have to book such a room to use it.
While denying being a “permanent fixture” at Castille though, he did admit to being quite busy with the work as OPM consultant – which is what led to him eventually taking a step back in 2015.
On Electrogas itself, Tonna could not bring the documents requested of him last week – documents which were essentially agreements between the government and Nexia – because, he said, they had been seized in two separate searches done in recent days.
His lawyer Stephen Tonna Lowell explained that two separate magisterial inquiries had searched Nexia’s archives in Mqabba in recent days and had taken the bulk of the documents into their own custody.
Discussing the power station project, Tonna said that he did not remember who had written a stage five report which he had signed along with four others to ultimately ratify the award of the tender for the power station to Electrogas.
Asked whether has doubts over the awarding of the tender today, Tonna said that he doesn’t. He said that the criticism of the NAO was towards Enemalta and the Programme Review Board more than anything else, although he admitted that there were things which – in his view – could have been done better.
For instance, he agreed that the take-or-pay agreement that Enemalta had made with Electrogas was “flawed.”
The take-or-pay agreement with Electrogas, means that the state-owned electricity distributor is obliged to pay for a pre-determined amount of LNG or electricity units – in this case 85% - from the consortium regardless of demand.
Some bickering between Glenn Bedingfield, one of the PL’s representatives on the committee, and Aquilina – wherein Bedingfield said that the witness wasn’t there to be asked for his opinion, and Aquilina said that Bedingfield seemed to be more worried than the witness about the line of the questioning – followed, and eventually ended with Aquilina telling the PL whip to “chill.”
Asked by PN MP Ryan Callus whether such a take-or-pay agreement – which was struck after the evaluation process of the tender – could have made the project more financially attractive, Tonna replied: “Naturally, yes – there’s not much thinking needed to reach that conclusion.”
Tonna will return to face the committee once again next week.