With more and more revelations related to the Steward hospitals deal emerging, reports that many within the Labour Party are seeing former Prime Minister Joseph Muscat become more and more of a noose around his successor Robert Abela’s neck are increasing.
There is real frustration within Cabinet, within the party’s administration, and – as The Malta Independent on Sunday reveals today – down in the party grassroots, that the Abela administration has been unable to shake off the scandals which it has inherited from their once-upon-a-time darling Muscat.
Yet, while Abela has denounced two out of the triumvirate of power in the Muscat administration, he has stopped short of going after the big man himself.
The Malta Independent on Sunday analyses seven instances in the last three years where Abela has had to answer about – and for – scandals left on his plate by the previous administration, and more so, how he handled them each time.
June 2020: The Montenegro wind farm and Konrad Mizzi’s sacking
One of the first major scandals from the Muscat-era which the Abela administration had to contend with concerned the Mozura wind farm in Montenegro.
It was reported by Reuters in June 2020 that 17 Black – the Dubai company belonging to Yorgen Fenech, who stands charged with being a mastermind in the assassination of journalist Daphne Caruana Galizia – made a profit of €4.6m from Enemalta's purchase of the windfarm project.
Abela acted fast: within three days of the report, he demanded that Mizzi – but only Mizzi – resigns from the Labour Party’s parliamentary group; a demand which Mizzi refused to follow.
As a result, the Labour Party’s Executive Council was convened and Mizzi was kicked out of the parliamentary group with the support of 71 out of the 73 members. One person voted against the motion and one other person abstained. Muscat did not attend the meeting that day.
Speaking immediately after the decision, Abela had said: “Mizzi was never part of the government I led. He was only an MP. Over the past days, new allegations surfaced and I must be clear I am not judging Mizzi from a legal aspect. Here we are judging his political position."
"I believe our standards as a party and as government are of the highest level," he had said, before adding that "we have set the highest standards of governance and ethics" and that if he (Abela) had been Prime Minister in 2016 he would have removed both Mizzi and Schembri.
Asked about what will happen to Joseph Muscat, Abela had said that Muscat's situation is different. "The decision on Konrad Mizzi was taken because of the implications that there were, that he had connections with the Panama Papers, with 17 Black. In Joseph Muscat's case there are no such allegations. The mistake Joseph Muscat made was that he did not take the decision at the opportune time and for that mistake he paid the highest political price."
March 2021: Keith Schembri’s arrest
Keith Schembri and 10 others were charged in court with money laundering, corruption and forgery charges in March 2021.
The 11 were arraigned following a magisterial inquiry in connection with allegations surrounding Schembri and former Allied Newspaper managing director Adrian Hillman. In the Schembri-Hillman inquiry, Schembri had allegedly passed €650,000 on to Hillman through regular €5,000 payments between 2011 and 2015. This is linked to when Keith Schembri's company, Kasco, had won a tender to supply Allied Group's Progress Press with a printing press back in 2009.
Schembri had shed doubts on the magisterial inquiry that led to his eventual charge and described his arrest as a “plot from the PN establishment” – a clear implication that, somehow, the Nationalist Party had taken over the country’s institutions.
He also reminded supporters, prior to his prosecution, of the vital role he played in the party’s succession of electoral victories in a clear aim to fire up Labour supporters.
The government had been defending Schembri up until his resignation in 2019, and while he was not a member of the Labour Party at the time of his arrest, the scandal still posed a headache for Abela, particularly as some of his party’s supporters genuinely believed Schembri’s line of thinking.
When The Malta Independent had asked if the government’s defence of Schembri was in the national interest, Abela answered after an uncomfortable pause: "I can only answer for what I did."
However, Abela had bit back at Schembri’s doubts on the magisterial inquiry, saying that he has complete trust in the institutions – including the inquiring magistrate in that case – and will let nobody, no matter who they are, undermine their integrity.
March 2021: Uncovering Macbridge
One of the great mysteries which remained from the Panama Papers saga concerned a company called Macbridge.
Macbridge was one of two companies, along with Yorgen Fenech’s 17 Black, listed in the Panama Papers as a target client for the offshore companies of Keith Schembri and Konrad Mizzi.
For many years a secret, in March 2021, Times of Malta and its reporting partners Reuters, OCCRP and Süddeutsche Zeitung found corporate documents showing Macbridge is owned by the mother-in-law of Cheng Chen, the Chinese negotiator on the multi-million euro deals involving Enemalta.
Abela had already denied in June 2020 that he knew who owned Macbridge when the Montenegro scandal, which led to Konrad Mizzi’s unceremonious dismissal, broke.
In this instance, however, Abela’s response was quick: the day after the revelations were made, the Prime Minister wrote to Police Commissioner Angelo Gafa to ensure that everything which had been uncovered is investigated.
Nobody has been charged in connection with the scandal up until present.
Abela also refused to defend Muscat when asked whether he believes Muscat was unaware of former Minister Konrad Mizzi’s and former OPM chief-of-staff Keith Schembri’s dealings, and whether he will allow Muscat to remain part of the PL.
His response to both questions was identical: “Joseph Muscat is no longer part of the government.”
June 2021: Malta is greylisted
Malta was greylisted by the Financial Action Task Force in June 2021, in a moment which seemed to be a reckoning for the way in which the country had been run in the years prior.
The weaknesses identified were largely on financial intelligence in tax evasion and money laundering, lack of transparency on beneficial ownerships and the roles of the Tax Commissioner and the FIAU. However, it was also a matter of laws not being properly implemented on the ground, which led to the decision.
It’s quite clear that the paradox of the Muscat economic administration contributed to this: on one hand, you had an administration which balanced the books and reported surpluses; but on the other hand, you had an administration which mired itself in financial scandals and shady dealings on practically every single major project undertaken by the country.
Abela, however, would not denounce Muscat, despite his admittance that the scandals from his predecessor’s era – scandals which he himself said he could not justify – probably contributed to Malta’s greylisting.
“Joseph Muscat hasn’t formed part of this government since January 2020. Today he is no longer an MP and so that question is already answered,” Abela told reporters who asked whether he would disassociate himself from his former boss.
Abela took a more accepting approach, rather than lashing out at the FATF’s designation, and Malta was ultimately removed from the FATF’s grey list in June 2022.
January 2022: Police search Muscat’s home
Muscat was once again thrust into the spotlight when his home was searched by police as part of the corruption probe into the Vitals hospital deal.
Muscat, who was seemingly aware of the impending raid – so much so that he had prepared a file for the police – said that he was only "half surprised" about the search and the "needless theatrics" were possibly designed to "humiliate" him.
Muscat said the whole process could have taken place without the "theatrics" of the police search and said the decision to seize his children's mobile phones was "excessive".
He insinuated that the search was orchestrated by someone who "wanted to pass on a message", but did not elaborate further when questioned.
PN leader Bernard Grech pounced upon that suggestion, saying that Muscat had “threatened” Abela, adding that the raid “was planned to serve Abela’s electoral interests”. Malta was heading towards the 2022 election at the time.
Abela rubbished those suggestions and told journalists that the government has always had full faith in the institutions, but the institutions have to be careful to maintain that trust.
He said that, as someone who worked as a court expert in the past, he had trouble understanding why the police had taken Muscat’s daughters’ mobile phones.
“The inquiring magistrate has the power to do that and that power must always be used within the limits of the administration of justice, and for no other scope.”
The PM said he could not comment further in view of the pending inquiry and the trust he has in the institutions.
“Let’s leave the institutions to work freely, but I want to be clear. We are proud of our institutions, but these must return the trust we have placed in them at all times,” he said.
February 2023: The courts annul Steward deal
Abela’s clear strategy of letting sleeping dogs lie when it came to Muscat and the scandals from his era was in actual fact paying off: the margin of votes in his party’s favour remained stable, so much so that the Labour Party romped to another landslide victory in 2022 – perhaps buoyed by the government’s very good handling of the Covid-19 pandemic.
That, however, changed in February 2022.
It was in this month that a court annulled the Steward hospitals concession, vindicating one of the PN’s longest running crusades against something started during the Muscat administration.
In its judgement, the court concurred with the view of Adrian Delia – who filed the case in 2018 when he was still Opposition leader – that both Vitals and their successors, Steward, had failed to fulfil their contractual obligations and therefore upheld the request to have the contract cancelled.
In a scathing judgement, Judge Francesco Depasquale dismantled every single one of Steward’s arguments and also described the deal as “fraudulent”.
The court also said that the government should have been the first to raise the doubts about Steward’s good faith when it was negotiating with them in order to protect the rights of the Maltese citizens.
Abela’s government did not appeal the judgement, meaning that it had accepted its contents and moved on to ensuring that Steward made way and gave the hospitals back to the country, even though Abela went on to launch what was practically his own defence of Steward in Parliament some days later.
As matters unfolded, for the first time a visible chink in Labour’s armour appeared.
A survey, which was published a couple of weeks after the news broke, showed that the gap between the PL and the PN had, quite shockingly, decreased to around 8,500 votes.
That gap has since increased to around 15,600 votes as per a survey published this week – an improvement but nowhere near the heights that the party stood at little over a year ago.
May: The NAO’s investigation and Muscat’s consultancies
The most recent problem for Abela has been a continuation of the Steward scandal, first after the National Audit Office published the final part of its investigation into the hospitals contract and then – in the same week – when an OCCRP, Times of Malta and Shift News investigation shared new revelations concerning the deal.
The NAO found that Konrad Mizzi “engineered” the side agreement which would have seen Steward receive €100m if the hospitals’ concession was terminated by “misleading Cabinet”, while the investigation, which made headlines a couple of days later, found that Muscat received €60,000 from two Swiss companies including one previously called “VGH Europe” and that a corruption probe is combing through the former Prime Minister’s bank accounts for evidence of wrongdoing in the hospitals’ deal.
Muscat has insisted that the payments were for legitimate work and went on the offensive, seeking the recusal of the magistrate leading the Vitals inquiry. The recusal request was denied, leading Muscat to say that he has lost faith in the inquiry. Mizzi has described the NAO report as being “pure conjecture”.
The combination of the NAO report and the stories concerning Muscat, which emerged, put renewed pressure on Abela to disassociate the party from the former PM.
However, while Konrad Mizzi’s social media denial elicited barely a word of support from the party faithful, Muscat’s riling against the inquiry has stirred up his supporters. It has, however, also stirred up concern within the Labour Party ranks at what impact Muscat is having – and may continue to have – on the current administration.
However, Abela has refused to comment on the matter, much less disassociate himself from Muscat.
“The subject of Steward and VGH is an investigative process and I believe that my words should, in no way, influence that process,” Abela told journalists.
In the meantime, however, the grassroots of the party continue to jitter: some genuinely follow Muscat’s line of thinking that the institutions are working against him, others think that Muscat and his baggage has become a dead-weight holding the Labour Party back.
What’s clear is that how Abela handles an almost inevitable divorce with his predecessor could define the future of his party – both in the short-term and maybe even beyond.