Scerri-Herrera jails whistleblower who named and shamed her father

Magistrate Consuelo Scerri-Herrera has remanded in custody Joseph Borg, 75, after he was charged with threatening the beleaguered director-general of the Internal Audit and Investigations Department, Rita Schembri.

Borg is accused of threatening Schembri by an email on 19 November, that he would report her to government authorities if she failed to pay monies she owes to third parties, in litigation she has on her sub-leasing of his restaurant to them.

Borg is owed €22,000 by Schembri after the latter was found guilty by a civil court of breaching a lease agreement on a restaurant she rented from Borg. Schembri is also involved in court litigation with another sub-lessee, over who has to pay Borg further monies for a breach of the lease agreement.

Borg pleaded not guilty to the criminal charges instituted by the police on a complaint by Schembri, who was represented in parte civile by Pio Valletta.

Borg did not deny sending an email reporting Schembri to OLAF, the EU's anti-fraud office of whom Schembri is a member of its supervisory committee. Borg, who pleaded not guilty, was denied bail and remanded in custody in Corradino Correctional Facility after prosecuting police inspector Chris Pullicino said he feared Borg would contaminate evidence.

It was a veritable meeting of familiar faces inside the courtroom of Consuelo Scerri-Herrera on Saturday.

Borg, who made his money in the construction business, was the whistleblower who uncovered the land-grab scandals of the 70s and 80s that implicated Labour minister Lorry Sant and acolyte Piju Camilleri. Instrumental in uncovering the corruption that pervaded the Labour administration of the time, in 1983 he was targeted in a bomb explosion outside his house: despite accusations at the time, no evidence linked the attack to Camilleri, a canvasser of public works minister Lorry Sant.

But Borg's incriminating evidence in a magisterial inquiry would later lead to the suspension of Sant from the Labour Party - as well as Borg's revelation that in 1985 the late Mr Justice Jospeh Herrera had placed him under undue pressure to reach an out-of-court settlement on cases he had instituted against Piju Camilleri.

Borg's claim in 2001 was denounced as "false" by Herrera's daughter Consuelo, and her brother Josè Herrera, the shadow justice minister.

It was this past incursion that led Borg's lawyer Edward Debono yesterday to complain in court that the charges were an attempt at silencing Borg; as well as pointing out his role as a whistleblower - a reference that surely did not go unnoticed by the presiding magistrate.

As for Rita Schembri - the permanent secretary who heads the OPM's sensitive Internal Audit and Investigations Department - it appears as though it behoved her to choose Pio Valletta as her legal counsel, the man she described as her "representative" to the whistleblower who uncovered a possible breach of ethics.

Schembri is out on long leave pending an investigation by the Auditor General into reports carried by MaltaToday of her direct involvement in the acquisition of a 60% stake in the Casinò di Venezia - undeclared to the head of the civil service - and of having carried out private meetings related to the bid from her government office.

Also involved in the deal is Pio Valletta, whose services to Far East Entertainment's bid for the casino is understood to be a small shareholding.

Litigation between Borg and Schembri

Her problems with Joseph Borg result from her lease of his St Paul's Bay restaurant in 1995. Borg's contract obliged Schembri that any business she conducts inside the premises had to be 70% owned by her, and that Borg was entitled to 33% of any sub-leasing.

In 1998, the Schembris sub-leased the restaurant to Nigerian national Aderiyike Olibisi Lawal. But instead of declaring the Lm28,500 (€66,400) sub-lease agreement to Borg - who would have been entitled to Lm9,500 (€22,000) - Schembri and Lawal entered into a contractual agreement to set up Bistit African Ventures Co. Ltd, and share all profits equally.

In what Mr Justice Tonio Mallia described as "roundabout way of evading her contractual obligation", Schembri retained her 70% control of the bar by disguising the sub-lease to Lawal in her 50-50 agreement with him.

Borg only accidentally found out that Lawal was in business with Schembri when the Nigerian asked him why he was not willing to sub-lease the restaurant to him: according to Borg, Lawal said Schembri had told him Borg would never lease the place to an African man. It was here that Borg found out that Lawal was no ordinary employee, but the actual sub-lessee of the restaurant.

Schembri was served with a garnishee order for €22,129 and then ordered to vacate the premises in a subsequent judgement in 2006.

The Schembris have appealed the sentence and the judgement is expected this week.

The matter is further compounded by another court case in which Schembri and another sub-lessee - the one who succeeded Lawal who has since departed to the United Kingdom - are in litigation over who has to pay Borg his 33% share of the sub-lease.

Rita Schembri on long leave

On Friday, the Office of the Prime Minister announced that permanent secretary Rita Schembri will be temporarily stepping down from her position as director-general of the Internal Audit and Investigations Department, pending an investigation from the Auditor General on allegations of a breach of the estacode's ethics.

Investigations carried out by the Auditor General do not necessarily result in indictments where breaches of the public service management code are concerned: such matters tend to be taken up by the Public Service Commission.

Past cases such as the ministerial procurement of airline tickets from private companies, a factor in the resignation of John Dalli as minister in 2004, or the €2 million direct order issued to Group 4 Security by the Office of the Prime Minister in 2008, were referred to the Auditor General: the result was a series of recommendations to ministries to avoid such 'impolitic' spending.

The decision to refer MaltaToday's reports to the Auditor General follows the public declaration by whistleblower Philip Rizzo, whose detailed email correspondence showed Schembri was conducting private business that could have been undeclared to her superior, Godwin Grima, from her government office in Valletta.