Acquittal confirmed for councillors who got full EU refund on discounted air tickets

A former Labour MEP and a group of serving and local councillors from both the PN and PL had their acquittal over fraud charges confirmed by a Court of Appeal.

The court turned down the Attorney General’s appeal against the five accused, and a travel agency manager, who were acquitted in 2021 over alleged fraudulent refunds on flight expenses.

Paul Cortis, general manager at KD Travel Services Limited, Oreste Alessandro, former executive secretary of the Local Councils Association, Dolores Borg, former Birkirkara mayor, Noel Formosa, mayor of San Lawrenz, former Labour MEP and former Qrendi vice-mayor Claudette Abela Baldacchino, and Michael Cohen, former president of the Local Councils Association, had been charged with complicity in the fraudulent racket dating back to 2010.

Noel Formosa

Claudette Abela Baldacchino

They were also charged with misappropriation to the detriment of the European Commission and the government of Malta, complicity in making a false declaration in a public document and committing an offence as public officials.

All protested their innocence from the start.

In 2007, the EU’s Committee of Regions flagged potential irregularities by Maltese delegates travelling on EU-related trips when claiming refunds for flight tickets.

The EU anti-fraud agency OLAF sent its officials from to Malta to carry out spot-checks at the travel agency in Sliema, leading to criminal charges. They were cleared of the charges in 2021, together with former Mellieha mayor Guzeppi Borg who has since passed away.

In its appeal, the AG argued that the defendants knew that the invoices presented for reimbursement, did not give the amounts actually paid, because the tickets were being issued at a discount while the LCA claimed a refund of the full amount they were entitled to.

The difference from the full-price refund on flexible business class tickets, was retained by the LCA. The former president of the Maltese delegation, Ian Micallef, said the refunds helped it cope with the additional expenses for overseas meetings, since government subventions were insufficient.

Micallef said the LCA took the advice of its auditor, safe in the knowledge it was not doing anything illegal. A second advice sought by the Auditor General from a well-known auditing firm, found no irregularity in the way discounts and refunds were being managed.

The handwritten invoices with the full amounts were submitted along with the boarding passes showing the discounted prices to the Committee of the Regions. No irregularity was flagged at that stage either.

This was a typical Malta example of “getting the best out of a situation,” Mr Justice Aaron Bugeja said when delivering judgment at appeal stage.

He said all had been done above board and those involved relied on the professional advice which they had no reason to doubt, with all defendants believing that they were not doing anything illegal.