The case involving the oil middlemen, the Farrugia brothers, and Austin Gatt’s associates has finally come to an end with the acquittal of all the Farrugia brothers, including Raymond Farrugia, Antonio “Twanny” Farrugia, Salvu/Saviour Farrugia, Emanuel Farrugia and Gaetano Farrugia. The other brother, George Farrugia, was granted a presidential pardon to serve as a State witness.
Previously, others who were acquitted included then Energy Minister Austin Gatt’s associates, including Francis Portelli and Anthony Cassar. Tarcisio Mifsud, Enemalta’s financial controller, was also acquitted. Tancred Tabone and Frank Sammut were not acquitted but Frank Sammut and their case is still pending.
The case was originally brought to light in 2013 on the eve of the general elections by MaltaToday. The lead investigator of the case was Angelo Gafa who today is Police Commissioner.
The case was about alleged underhanded oil commissions that oil traders received over the government’s purchase of oil supplies – commissions which were allegedly shared with Enemalta officials and Austin Gatt’s henchmen. George Mallia had testified that Enemalta’s head of procurement Alfred Mallia asked him for a cut from the commission which was also shared with Enemalta’s financial controller Tarcisio Mifsud. The government’s head of oil bunkering Frank Sammut also asked for a commission according to Farrugia along with Enemalta chairman Tancred Tabone and Enemalta’s Chief of Projects Raymond Ferris. Tancred Tabone and Frank Sammut were close associates of Energy and Infrastructure Minister Austin Gatt.
From George Farrugia’s testimony alone, the case appeared to be a clear-cut case of corruption. The presence of a middleman in the oil-procurement process only compounded the obvious signs that the entire procurement system was designed to extract and embezzle funds from oil procurement. Enemalta could have procured the oil directly, without any middlemen, but the use of middlemen enabled not only graft and excess payments to the middleman himself, but also a mechanism to siphon funds to Austin Gatt’s associates.
The Farrugia brothers received their oil commissions from the main government oil-suppliers such as Total which were passed on to their companies Powerplan and Aikon in Swiss bank accounts. In turn, the Farrugias passed on a share of the commission to Swiss bank accounts pertaining to Austin Gatt’s associates. Austin Gatt himself had an undeclared Swiss bank account with a minimum of $100,000 in deposits.
The commission paid to the Farrugia brothers ranged from 0.5 cents to $2 per metric tonnes. At such rates, with a total oil imports of up to 910,645 metric tonnes per year, the Farrugia brothers netted at least around $1 million per year in commissions which were then shared with Austin Gatt’s associates. This graft stretched for a round ten years with the commission being paid yearly.
The scheme was an obvious dirty scheme of corruption, embezzlement and waste of public funds but the suspects were acquitted because the Police failed to do any proper investigations including by tracing the funds. The case also symbolised the widespread graft in the Nationalist government administrations under then Prime Minister Lawrence Gonzi where public procurement was repeatedly used by Nationalist government ministers to syphon and embezzle public funds.
Today, the case has become a symbol of the Labour government’s failure to tackle corruption and the lack of will, skill and determination by the Police to properly prosecute corruption. It is the Labour government’s fault that these individuals have been acquitted and the Labour Party now has to bear a legacy of covering-up the corruption of even its most hated historical political adversaries.
Photo of George Farrugia by Times of Malta.
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