The National Audit Office found nothing irregular in former Finance Ministry Permanent Secretary Alfred Camilleri’s conduct when it came to the now annulled hospitals deal, Auditor General Charles Deguara told a court on Tuesday.

Deguara also testified that Camilleri showed full cooperation with the National Audit Office when it investigated the hospitals deal.

Deguara was the main witness of the sitting on Tuesday, as the case against Chris Fearne, Edward Scicluna and 13 others in relation to the Vitals hospital concession continued.

The Auditor General was faced with various lines of questioning put to him by the defence lawyers of Bradley Gatt and former permanent secretaries Alfred Camilleri and Joseph Rapa, together with current permanent secretary Ronald Mizzi.

Answering questions from lawyer Michael Sciriha, Deguara explained that the NAO had published three reports on the concession, starting from the tendering process to when the concession passed on to Steward.

The three reports were published in January 2020, December 2021 and May 2023 respectively, and an annex was published in July 2020.

Deguara explained that his assignment is based on aspects of good governance.  This can cover public procurement, which in this case was a very important aspect, he said, but the emphasis was on good governance – how well the resources were used, how well procedures were followed, and so on.

“The report is clear, it is on our website, and I think everyone can take what they need from the reports,” Deguara said.

He added that the investigation was focused on the procurement and on how the adjudication process was handled, and that to them the fact that there was a memorandum of understanding prior to the tender being issued was not acceptable. “I’m not saying anything new,” he said.

Asked which entity was handling the concession, Deguara said that the adjudication of the project was in the hands of Projects Malta.  The ministry responsible throughout the concession was the Tourism Ministry – which was led by Konrad Mizzi at the time.

Defence lawyer Franco Debono referred to Deguara saying that Projects Malta was the entity responsible for the adjudication of the concession, but quoted from the magisterial inquiry which said that Projects Malta seemed to have been sidelined in the RfP process, asking which was true.

Deguara replied that he would stick to what the NAO concluded in its report.

Asked by Debono whether the NAO had found that Alfred Camilleri had done anything irregular, Deguara replied in the negative. “No, nothing,” he said.

Filletti, also representing Camilleri, asked Deguara whether the concession was subject to the Cabinet’s decisions, to which Deguara replied in the affirmative.

Deguara said that the NAO had consulted with Camilleri during their investigations and he had always been very cooperative.

Filletti then asked about the contracts given as part of the concession, and who had approved them.  Deguara replied that all of them had been signed off by Konrad Mizzi.

“From the evidence we have, it seemed like ex-Minister Konrad Mizzi was pushing the deal forward,” the Auditor General said.

Matters to be verified in the next sitting are whether Gatt was mentioned in the NAO’s three reports on the hospitals concession and whether a particular contract amendment went before Cabinet or not.

Former police sergeant Shaun Spiteri was another witness who testified during the sitting.  He had led the search of Kevin Deguara’s home, and was grilled by Deguara’s defence lawyer Franco Debono.

Spiteri said that he could not remember what exactly they were seeking from Deguara’s residence and could not have checked beforehand since he is no longer working with the force.  The court gave special dispensation for him to access the police file and return in the next sitting to present the information.

Spiteri also said that he could not remember whether Deguara was given his right to a lawyer and other rights associated with being searched or considered a suspect.

A JobsPlus representative also testified, giving details about the employment history of one of the accused – lawyer Bradley Gatt. He worked at DF Advocates between November 2008 and December 2012, before moving to DF Consultancy Services Ltd, where he continued to work until 6 March 2015.

The experts used by magistrate Gabriella Vella in her inquiry also came under focus, as it emerged that only two of them – both local experts – are on a database of experts held by the courts.  Criminal Court Registrar Franklin Calleja however testified that this database is far from exhaustive and said that magistrates were not bound by it.

The way in which these experts are paid also came under scrutiny.  Calleja testified that he does not carry out any negotiations on the fees of experts – the expert in question presents their invoice, it is endorsed by the magistrate who nominated them, and it is paid.

These questions were posed within the context of the magisterial inquiry costing over €10 million to complete, with the bulk of these going to foreign experts engaged by the magistrate.

At the end of the sitting prosecutors and the defendants battled over a request filed by the Attorney General lawyers which asks the accused to inform the courts if they are going to go abroad, and also bans them from speaking publicly about the case.

Prosecutor Refalo said the reason for this is because the prosecution wants to protect the correct process of justice in the case, and if someone decides to issue a press statement then it might prejudice that process.

Police inspector Wayne Rodney Borg however testified that he had no indication of any problems from any of the accused for their attendance to any of the sittings.

This prompted Debono, who earlier described the prosecution’s request as “dangerous” and several other lawyers that the inspector's testimony shows that there is no legal necessity for the conditions to be imposed on the accused.

Magistrate Caruana will decree on the matter in Chambers.

40 witnesses are still to be summoned for the purpose of the court’s declaration on whether there is enough evidence prima facie – at first glance – for the charges against the accused to stick.  They will be split evenly across four sittings, and include representatives of various entities, the editors of The Malta Independent and the Times of Malta, Cabinet secretary Ryan Spagnol, and two of the accused – Deborah Chappell and James Camenzuli.

The case continues on 8 July.

14:19: The decree on the matter will be given at the next sitting, Magistrate Caruana says.

The case is therefore deferred and the sitting comes to an end.  We will meet again on Monday – thank you for following.

14:15: The submissions from the defence on this matter are continuing. 

De Marco argues that for such conditions to be imposed there has to be a legitimate basis and a legitimate aim presented by the prosecution – which has not been provided, and therefore the request should be refused.

Charles Mercieca cites a European court judgement backing up the defence’s arguments.

Debono suggests that if the court were to accept the prosecution's requests then it must be careful to not incentivise others to disturb the case outside of the court room, knowing that the accused cannot answer.

14:05: Other lawyers are joining the fray now and opposing the prosecution’s request for conditions.

Tonna Lowell notes that the decree in the parallel case to this - that treating Muscat – was handed down in the first sitting; today is the sixth sitting of this case, and not a single one of the accused has commented about the case. The circumstances therefore cannot be compared.

He questions what the prosecution can base its request on when the police inspector himself has testified that there is no danger of the accused doing what the prosecution is fearing.

13:51: More arguing is cut short as the prosecution says it isn’t objecting to the defence’s request.

Police inspector Wayne Rodney Borg takes the stand. He says that he had no indication of any problems from any of the accused for their attendance to any of the sittings.

Debono says that the inspector's testimony shows that there is no legal necessity for the conditions to be imposed on the accused.

13:41: Debono now wants someone from the prosecution in order to testify about the conditions imposed on the accused.

Refalo clarifies that the prosecution had not wanted any limits imposed on the accused going abroad, but for the accused to simply inform the courts when they are going abroad.

The second part was for the accused not to make any public statements on the evidence in the case, Refalo explains. The reason for this is because the prosecution wants to protect the correct process of justice in the case, and if someone decides to issue a press statement then it might prejudice that process, he says.

Lawyer Gianella De Marco says that the request is simply unfair, but is told to sit back down by the magistrate.

“We don’t want to be in a situation where an accused… like we as a prosecution do not speak publicly about the case because we believe in the correct administration of justice and that justice must be done in the court room – so we are requesting that the case in court is protected,” Refalo says.

Debono describes the request as “dangerous.” He says that journalists have a right to report on the case, but if the media has the right to report then the accused must have the right to defend themselves from an unjust allegation if there is such.  “It is a terrible and dangerous imbalance,” he says.

13:31: Filletti has gone on a long-winded argument with regards to the request for the freezing order, saying that the court’s decision does not override his client’s right to a fair hearing on this.

He says that the court should order testimonies, and if it is not convinced that there is a valid reason for the freezing order then it should refuse the freezing order.  The prosecution must be prepared to present some sort of evidence to back up the freezing order requests.

The prosecution has been given until the next sitting to answer on the freezing order requests.

13:17: The court has also rejected a request by the defence to summon the prosecution to testify in order to justify the requests for a freezing order.

13:13: Caruana reads through the lengthy list… it includes representatives of various entities, the editors of The Malta Independent and the Times of Malta, Cabinet secretary Ryan Spagnol, and two of the accused – Deborah Chappell and James Camenzuli.

Caruana meanwhile has also rejected a request for a constitutional reference which was filed in the last sitting.

13:01: Magistrate Caruana says that the defence has summoned a total of 40 witnesses, who are all to testify for the purposes of the prima facie declaration.

The witnesses will be split evenly across four sittings which will take place on 8 July, 10 July, 11 July, 16 July – all at 9:30am.

Submissions will be made on 17 July at 9:30am, and the magistrate will decree on this on 24 July.

Two people are to be charged before Magistrate Rachel Montebello on 11 July at 1pm, the prosecution notes, but there is no other day that so many witnesses can be fit in.

But the magistrate cannot stipulate when these sittings will end because there are so many witnesses to testify on each day.

12:52: Court is back in session.

Calleja has returned to the witness stand and is asked by Debono whether the Justice Minister himself had appointed any experts. Calleja does not know of any such case where this happened, although legally it can.

Debono asks what the role of the registrar is in payment, and Calleja says that there is no negotiations on fees – the expert in question presents their invoice, it is endorsed by the magistrate who nominated them, and it is paid.

The registrar would not know how much the bill is going to be before the invoice is presented, Calleja says. “I would have no indication on what the fees are or even on what the expert is appointed to do,” Calleja adds.

Debono asks whether the experts in the magisterial inquiry had given any indication on what their fees were. “To me, no,”  Calleja says.

He steps off the witness stand.

12:35: Some questions follow on how experts are paid and whether there are any established rates for payment.  Calleja says that for most experts there isn’t an established rate.

Magistrate Caruana questions what the relevance of the question is, as one of the lawyers focuses on “millions paid to one expert.”  The lawyer says he is interested to know how the figure was reached and what type of due diligence on these millions was.

“There’s a difference between relevance and interest,” the Magistrate says, but he allows the question.

Calleja says that there has to be approval of the magistrate but he has no visibility of what happened or didn’t happen as he has no visibility on the inquiry.  “I just receive the invoice from the magistrate and process it for payment,” he says.

Prosecutor Francesco Refalo asks whether the list that Calleja has presented is exhaustive.  “No, definitely not,” Calleja says. 

“So a magistrate is not tied to sticking to this list?,” Refalo says.  “Nobody is obliged to follow it, the list is just there as a reference,” Calleja says.

His testimony comes to an end, and the sitting is suspended for 10 minutes.

12:30: Police inspector George Frendo was also meant to be testifying today, but he could not attend due to a personal matter, the court is told. Criminal Court Registrar Franklin Calleja is up next. 

Calleja exhibits the database of court experts. He had also been asked to see whether the experts appointed in the magisterial inquiry were in this list.

Calleja says that two Maltese experts were in the list, and the rest were not.

Three defence lawyers are huddled around the newly exhibited list.  Debono asks what exactly the list in question is.  Calleja explains that it is the list that he had referred to in his last sitting, and it is the list compiled by the Department of Justice for use by members of the judiciary.

“Is there a transparent way as to how these people are chosen?” Debono asks.  Calleja believes that an expression of interest is issued, but questions would be best directed at an official from the Department of Justice.

The director Katia Caruana will be summoned to testify in the next sitting.

12:23: Louis Buhagiar from JobsPlus is up next.

Sciriha asks for the work records related to Bradley Gatt, particularly vis-à-vis DF Advocates and when he worked there.

Buhagiar testifies that Gatt worked with DF Advocates as an advocate between 10 November 2008 and 31 December 2012.  He then worked at DF Consultancy Services Ltd from 1 January 2014 till 6 March 2015.

He then moved to M&R.K Advocates and worked there from March 2015 till 2019, and then Sammut Legal between 2019 and September 2020 when he became a partner which he remained until 24 May 2024.  He had resigned after the charges against him were issued.

Today, he is listed as a self-employed lawyer.

That concludes Buhagiar’s testimony, but he is asked to bring identical records for Deborah Anne Chappell to the next sitting.

12:17: Debono asks the former sergeant whether he had testified before the inquiry.  Spiteri replies that he hadn’t, but the lawyer disagrees and asks the court to find the specific reference to his testimony in the acts of the magisterial inquiry.

It is confirmed that he had testified – Spiteri had remembered what is being referred to.  Debono asks whether the sergeant had mentioned the company DF Advocates in his testimony, to which Spiteri replies that he hadn’t.

Questions now turn to the search at Deguara’s home.

Spiteri remembers stopping Deguara in his car as they arrived at his residence, and giving him the search warrant. He does not remember whether he gave him the right to a lawyer or anything else.

Debono asks exactly what Spiteri was looking for in the search, but Spiteri does not remember.  Debono chastises the witness for not being prepared, but Spiteri says he is no longer a member of the police force and doesn’t have access to those documents.

Spiteri is insisting that DF Advocates was mentioned in his search documents, but Debono disagrees.  The lawyer asks whether the former sergeant knew the difference between DF Advocates and DF Consultancy Services Ltd, to which Spiteri says that at the time he didn’t.

Spiteri’s testimony is suspended, and he must return with documents showing what he had been searching for at Deguara’s residence.  He is given court permission to access the police file to get such information.

12:07: Former Police Sergeant Shaun Spiteri is the next to be summoned to the witness stand.

He starts to explain that in September 2021, together with other officers and foreign experts… Debono stops him once, twice, and three times because the witness is reading off a piece of paper.

The Magistrate chastises Debono for interrupting the witness.  Spiteri says that he searched the residence of Kevin Deguara – another of the accused today – as part of the Magistrate Gabriella Vella’s inquiry.

Debono asks the former sergeant to read out the search warrant which governed this search, which he dutifully does.  Debono says that the warrant was against the company DF Consultancy Services Limited – but Spiteri says that Deguara was also mentioned.  Having read out the warrant, Deguara and his residence were mentioned in the warrant as well.

DF Advocates were not mentioned on the warrant, Debono says.  Spiteri agrees.

11:59: Deguara must verify two matters – whether Bradley Gatt was mentioned in the NAO’s report (he thinks he wasn’t, but wants to be sure) and whether a particular contract amendment went before the Cabinet (he thinks it did, but, again, wants to be sure).

Lawyer Stephen Tonna Lowell also asks Deguara to bring with him two press releases issued by the NAO – one on 28 July 2020 and the other on 15 May 2023 – in order to exhibit them.

His testimony is therefore suspended and he steps off the witness stand.

11:54: Deguara has gone back to check in the report for an answer to Debono’s question on who represented the government in the RfP process.  It is confirmed that Ganado Advocates had represented the government, and Deguara says that the law firm had not answered the NAO’s questions.

11:50: Filletti now asks about the contracts given as part of the concession, and who had approved them.  Deguara says that all of them had been signed off by Konrad Mizzi.

“From the evidence we have, it seemed like ex-Minister Konrad Mizzi was pushing the deal forward,” Deguara says.

11:45: On behalf of Alfred Camilleri now, Debono asks whether the NAO had found any irregularity against him.  “No, nothing,” Deguara replies.

Also for Camilleri, lawyer Stefano Filletti now asks Deguara whether the concession was subject to the Cabinet’s decision.  Deguara replies in the affirmative.

Deguara says that the NAO had consulted with Camilleri during their investigations and he had always been very cooperative.

FIlletti asks Deguara whether there had been any communication between him and Camilleri, to which Deguara replies that there had but it had “no bearing on the report.”

He is initially reluctant to share the details of the conversation, but prodded by the magistrate he says that Camilleri felt that maybe the NAO should have used a different methodology, but this was after the report had been issued.

11:39: Franco Debono is up next, and he asks Deguara who the lawyers representing in the Request for Proposals (RfP) process were.  Deguara laments that the reports were over 1,100 pages long and the first one came out over four years ago.

Debono quotes what Deguara said with regards to Projects Malta handling the concession, and then quotes from the magisterial inquiry which said that Projects Malta seemed to have been sidelined in the RfP process.

Deguara says he sticks to what the NAO concluded in its report.

11:35: The lawyer asks the Auditor General if he can indicate if and where Bradley Gatt is mentioned in the report.

Deguara says that as far he can recall, he never met Gatt’s name in the report, but says that if he is a public official then he does not know how he could feature in the NAO’s report.

“We audit the public part,” Deguara says as Sciriha puts in a word of disagreement with Deguara’s interpretation.

Deguara will check this later.

11:30: The lawyer asks whether Bradley Gatt – one of the accused – was in any way engaged by the Maltese government.  Deguara says that the NAO reaches conclusions on the basis of evidence.

“The report is clear, it is on our website, and I think everyone can take what they need from the reports,” Deguara says.

He says that the investigation was focused on the procurement and on how the adjudication process was handled, and that to them the fact that there was a memorandum of understanding prior to the tender being issued was not acceptable. “I’m not saying anything new,” he says.

Asked which entity was handling the concession, Deguara says that the adjudication of the project was in the hands of Projects Malta.  The ministry responsible throughout the concession was the Tourism Ministry – which was led by Konrad Mizzi at the time.

11:26: Lawyer Michael Sciriha is the first to ask questions, and he asks Deguara to detail his investigations into the concession.

Deguara says that the NAO issued three reports on the concession, starting from the tendering process to when the concession passed on to Steward.

The three reports were published in January 2020, December 2021 and May 2023 respectively, and an annex was published in July 2020.

Sciriha wants to know exactly what the NAO’s investigation focused on.  Deguara replies that his assignment is based on aspects of good governance.  This can cover public procurement, which in this case was a very important aspect, he says, but the emphasis was on good governance – how well the resources were used, how well procedures were followed, and so on.

11:23: Auditor General Charles Deguara is the first witness to take the stand. He has been summoned by a number of the defendants, including Fearne.

Deguara’s National Audit Office had led an extensive investigation into the hospitals concession.

11:16: Good morning and thank you for joining us for this live commentary.  Magistrate Leonard Caruana has entered the court room here in Valletta and is currently doing a roll call of the army of defence lawyers and their respective clients.