Even ‘revolving doors’ have to be investigated

It is certainly no surprise that former Prime Minister Joseph Muscat would resort to the ‘revolving doors’ line of defence, when faced by calls for an investigation over his consultancy work following his disgraced exit in 2020.

“There can be all the necessary investigations since I have nothing to hide,” a defiant Muscat retorted. “It seems that those making accusations against me are implying that because I carried out work abroad for a company that could have had connections with interests in Malta, this amounts to corruption. This when the assignments I carried out have nothing to do with the Maltese government.”

The statement concerns a press report showing that Muscat was paid by a Swiss firm for consultancy work, shortly after stepping down as Prime Minister. The same firm had previous connections with Steward Healthcare, the private hospitals concessionaire, as well as with Yorgen Fenech, the Tumas magnate now accused of masterminding the Caruana Galizia assassination.

Muscat received €60,000 from the Swiss company, which had in turn received millions from Steward Healthcare when it took over the VGH hospitals deal. The first payment, valued at €15,000, was transferred to Muscat’s account in March 2020, two months after his formal resignation as Labour Party leader.

In total, Muscat received four monthly payments, two from companies run by the same person: lawyer Wasay Bhatti, who would often brag about his proximity to Muscat and his former chief of staff Keith Schembri.

Email correspondence between Bhatti and Yorgen Fenech gives the claim further credence. After Fenech was outed as the owner of 17 Black, he reached out to Bhatti for help in moving his money out of the Ajman Region, where his 17 Black company was registered.

In his email, he said he was referred to Bhatti by a “common friend from Malta”.

On his part, Joseph Muscat hit out at the fact that the report’s headline failed to say he carried out work for the company. “It implies I was given money for nothing or as supposed compensation for a transaction worth millions.”

“The payments I received for assignments carried out over a number of months are nowhere near these amounts. But whoever gleams the headline is left unaware of this.”

Muscat insisted that the work he carried out “over a number of months” was not related to government projects in Malta, and said that all payments are fully declared.

Predictably, the former PM also claimed that the accusations against him were a case of ‘two weights and two measures’: pointing towards similar consultancy work carried out by former Nationalist ministers such as Austin Gatt, Tonio Fenech and Claudio Grech.

Indeed, the issue of ‘revolving doors’ did not begin with Joseph Muscat. It was, in fact, for this reason that the Commissioner for Standards in Public Life issued guidelines to regulate the practice in July 2020: including a proposal that ministers are subject to employment restrictions for a period of three years after leaving office. 

But while Muscat may have a point about past cases – which can also be extended beyond Malta’s shores – his defence is nonetheless deeply problematic.

To begin with, the circumstances under which Muscat operated are far from squeaky-clean. Beyond the standard objections to ‘revolving door’s – I,.e., the suggestion of proximity to the private operators who benefited from government concessions, in his own time as PM – there is no doubt that the Labour administration’s hand-picked operators for the privatisation of three hospitals is a matter that naturally gives rise to well-founded suspicions about Muscat’s post-government dealings.

It was during Muscat’s time that Steward Healthcare, the successors to Vitals, were renegotiating their deal with the Labour administration, obtaining one of the most egregious conditions that could result in a €100 million bill for the taxpayer, should any Maltese court decision terminate the contract.

This in itself is already leverage in the hands of Steward in its dealings with the government in order to extract greater concessions on the running of the three hospitals.

From this perspective, Muscat’s dealings with a Swiss firm that appears to be connected to Steward, only serves to throw a darker cloud on his immediate dealings with the healthcare company, when he accompanied Armin Ernst to the new prime minister, ostensibly to lobby on their behalf.

The entire hospitals privatisation deal has in fact been revealed to be a great money-making scam, in which the investors were chosen ahead of a shambolic selection process; while the main drivers of the project, Ram Tumuluri and Mark Pawley, paid themselves €1 million for each year since 2015 and devised a €5 million bonus in a back-dated contract in June 2017, months before they exited Malta.

So while Muscat might claim that he is only passing through the revolving door that so many Nationalist forebears passed through before his time, the suspicion on his post-government dealings stands, given the history of this most dubious of government contracts.

Either way, these payments must be investigated in full.