Attorney General Accuses Malta’s Former Prime Minister, Chief of Staff, and Minister of Money Laundering in Hospital Partnership Scandal

Maltese politicians, including former prime minister Joseph Muscat, his former chief of staff Keith Schembri, and former minister Konrad Mizzi, have been accused of money laundering by the country’s Attorney General, Victoria Buttigieg. The allegations connect to a controversial public-private partnership for hospitals.

Allegations and Investigations

Buttigieg ordered the trio, as well as around a dozen other individuals, to provide access to their assets and funds and declare the sources of their wealth. They have also been prohibited from selling any of their assets.

Following a magisterial inquiry last week, 78 boxes of evidence have been handed over to the attorney general. She will evaluate the findings and determine who will face criminal charges.

Background on the Hospital Partnership

In 2014, Vitals Global Healthcare, a consortium led by a group that signed a memorandum of understanding with the Labour government, won a tender to run three state hospitals. Despite receiving hundreds of millions in public funds, they failed to deliver on their promises, accumulating debt and unpaid bills.

The Fraudulent Deal and Kickbacks

Late in 2023, a court found that the deal appeared fraudulent. Muscat is believed to have received over half a million euros in kickbacks.

Muscat’s Resignation and Allegations

Muscat resigned as prime minister in December 2019 amidst allegations of links to the mastermind of journalist Daphne Caruana Galizia’s assassination and was named Corrupt Person of the Year by the Organized Crime and Corruption Reporting Project.

Impact and Implications

Current Prime Minister Robert Abela has criticized the inquiry, claiming it was timed to coincide with the European elections and an attempt by ’the establishment’ to interfere with the judiciary. However, investigations into the deal and the ministers involved are ongoing.

The European Connection

Despite evidence of suspected corruption and money laundering, the EU is set to invest in the Melita TransGas Hydrogen Reach Pipeline, which runs between Malta and Sicily and is powered by LNG imported under the Electrogas deal.

Misleading the European Commission

Muscat and his associates have been accused of misleading the European Commission about the details of the deal and have yet to comment on the allegations.

Previous Scandal: Electrogas

The trio have also been implicated in the Electrogas scandal, with Maltese taxpayers paying double the rate for LNG from Azerbaijan’s state energy company SOCAR for ten years. Further investigations into the deal and the individuals involved are ongoing.

Payments to Panamanian Companies

Revelations showed that Fenech, the previous director of Electrogas, was paying €150,000 a month to Panamanian companies owned by Mizzi and Schembri. Both Muscat and Mizzi have denied any wrongdoing.