Dalligate | Police still investigating OLAF report, unclear whether Dalli was aware of bribe

Additional reporting by Karl Stagno-Navarra

There is enough evidence to place Silvio Zammit, the former deputy mayor of Sliema who allegedly asked Swedish Match for €60 million in a bid to reverse an EU ban on the sale of snus, under a bill of indictment.

Magistrate Anthony Vella today ordered that the compilation of evidence's verbale is transmitted to the office of the Attorney General.

However, it is unclear whether Zammit is to be tried for bribery or trading in influence, after it transpired that the involvement of former EU health commissioner John Dalli in the alleged bribe was unclear.

OLAF report not presented

Police investigations into OLAF's allegations that John Dalli was aware of Silvio Zammit's attempt to solicit a €60 million bribe from Swedish Match and the European Smokeless Tobacco Council (ESTOC), are still ongoing.

The matter was revealed when Zammit's defence lawyers Edward Gatt, Kris Busietta and Melvyn Mifsud challenged Cassar to produce the OLAF report.

It was here that Cassar asked to be directed by the Court, on the basis that the investigations were still not concluded.

Magistrate Vella warned Cassar that he was giving evidence and that he had to answer the defence's question. At this point, Cassar turned to consult prosecuting inspector Angelo Gafà and Attorney General representative Philip Galea, until he was interrupted once more by lawyer Edward Gatt, who challenged him to state what the OLAF conclusions were.

Here again, Cassar stood momentarily speechless on the witness stand, until he was advised by the Court to say what in fact were the concluding remarks by OLAF.

After consulting what seemed to be a 400-page, plastic bound document marked with a number of coloured 'sticky notes', Cassar was asked by the Court to read only the part which refers to Silvio Zammit.

Here Cassar read: "if Silvio Zammit was acting on behalf of John Dalli, and if John Dalli was involved in the request, then Silvio Zammit's actions can qualify as bribery under Maltese law. But if he was pretending to act on behalf of John Dalli, his acts could be qualified as trading in influence under Maltese penal law."

Quizzed again by lawyer Edward Gatt to say which of these two hypotheses he basing his charges against Zammit upon, Cassar replied that what he knew for sure was that "Zammit was using John Dalli's name."

Kessler led OLAF investigations

OLAF director-general Giovanni Kessler led investigations and personally conducted interrogations into allegations of corruption in an alleged attempt at lifting the EU's ban on the retail of snus.

Giving evidence before Magistrate Anthony Vella, who presided over the compilation of evidence against Silvio Zammit, 48 of Sliema - who is charged with corruption and trading in influence - Assistant Commissioner Michael Cassar revealed that Kessler was the man who approached lawyer Gayle Kimberley while attending a conference in Portugal for her employers, the Lotteries and Gaming Authority (LGA) on 14 June 2012.

Kimberley had acted as a lobbyist for Swedish Match and met former EU health commissioner John Dalli and Silvio Zammit to discuss the EU's ban on snus.

Kimberley, formerly a lawyer for the European Council's legal services, was the first person to be approached and interrogated by OLAF for almost seven hours.

Giving evidence, Michael Cassar said details of Kimberley's interrogation were immediately leaked to Silvio Zammit, because Kimberley was in the company of LGA compliance officer Iosif Galea - the man who had introduced Kimberley to Zammit.

It turns out that Galea, who could access Kimberley's email, discovered that she was corresponding directly with Kessler, and that she had forwarded the OLAF director dossier relating to Silvio Zammit's activities and his connections to former Commissioner John Dalli.

Galea admitted to having "only read the document" and deleting it, but he denied telling Silvio Zammit about its content.

Bail not paid

Cassar stressed that the police investigations by were conducted independently from the OLAF report, to the extent that the report was only used for the names mentioned in it.

"What I can say is that the investigations led by the Maltese police started totally afresh, and we interrogated all the persons involved. Myself, the Commissioner John Rizzo and Inspector Angelo Gafà travelled to Brussels in November and met with the parties who led the investigations, including OLAF chief Giovanni Kessler, the other interrogators and the people from Swedish Match and ESTOC. We recorded every interrogation we conducted."

Towards the end of the sitting Magistrate Anthony Vella granted Silvio Zammit bail against a €25,000 deposit and a €75,000 personal guarantee.

Zammit cried as soon as bail was granted, putting his hands to his face, and was later seen approaching his defence counsel whispering into their ear.

After consulting with his family, lawyer Edward Gatt asked the Court to reconsider the bail deposit, given that the family could put up €20,000 as a deposit. "We have €10,000 immediately available, and we are trying to put up the rest."

Magistrate Vella stressed that his ruling was handed and that he was not going to alter it.

Zammit was remanded in custody until bail was deposited with the courts.

Iosif Galea, business associate of former Sliema deputy mayor Silvio Zammit had set up the meeting between lawyer Gayle Kimberley and Zammit, in what was to become the relationship that set the wheels turning to lobby John Dalli on the EU's smoking laws.

LGA associate's testimony

Iosif Galea, a compliance manager at the Lotteries and Gaming Authority, told the court in the compilation of evidence against Zammit, that he had heard his friend mention the sum of €60 million in a conversation he had on the phone with secretary-general Inge Delfosse, of the European Smokeless Tobacco Council (ESTOC).

"I remember Zammit talking about the local councils' elections and then I heard him say '€60 million'. After she hung up, Zammit told me he fired off that sum because she had 'bugged [him] and that [he] wanted to get rid of her'. But I don't know to what he was referring to."

Galea told the court he understood that 'sixty million' referred to cash because he felt the figure was too extraordinary to mean anything else, and that he was also aware that Delfosse was concerned about the Tobacco Directive.

Galea, an associate of both Zammit and lawyer Gayle Kimberley - who was briefly engaged by Swedish Match to lobby former European Commissioner John Dalli - was testifying in court during the compilation of evidence against Silvio Zammit.

Zammit is accused of soliciting of €60 million bribe from snus producer Swedish Match. He has been now granted bail on a deposit of €25,000 and a personal guarantee of €75,000, and asked to sign in twice at the Sliema police station as part of his bail conditions.

Kimberley, a former lawyer employed with the European Council's legal services, wa was a legal consultant at the Lotteries and Gaming Authority, where Galea was compliance manager.

Galea and Zammit were friends who together ran a catering business, as well as promoted an annual circus event.

Galea said Zammit had called him from Sweden in October 2011, where he had met a representative from the European Smokeless Tobacco Council (ESTOC), and asked whether he knew a lawyer specialized in European law.

Galea said he never discussed the Tobacco Products Directive with either Zammit or Kimberley, the law which Zammit allegedly would have sought to influence if Swedish Match paid a bribe.

Swedish Match produce snuff tobacco 'snus', which cannot be sold in the EU outside of Scandinavian countries under a dispensation from the Commission.

Galea said the first time he head of the directive was in early January 2012, when a meeting was held at John Dalli's office in Portomaso between Zammit, Kimberley and the commissioner.

Galea was present for the meeting, which he claimed lasted no more than eight minutes, but claimed he did not know what was being discussed.

"I only heard the words 'tobacco directive', but I was busy answering a phone call," Galea said, adding that only Dalli and Kimberley were talking while Zammit said nothing.

Galea denied knowing why the meeting took place.

Police inspector Angelo Gafà presented an email, dated 5 March 2012, which Kimberley sent to both Galea and Zammit, containing the word 'snus'.

Galea said he never replied to the email because he did not know why Kimberley had sent him the email.

After investigations into the alleged bribe were kick-started by the EU's anti-fraud office OLAF, both Galea and Kimberley were approached by OLAF investigators during an official LGA trip to a conference in Portugal. OLAF director-general Giovanni Kessler was personally there to speak to Kimberley, police prosecutors told the court.

Galea said that two men from OLAF approached Kimberley at 9am on their first day in Portugal, where she ended up spending the rest of the day in conversation with them.

"I know that they were investigating her about the tobacco directive. She was crying and told me 'you've stitched me right up by setting me up with Silvio Zammit'. She also told me not to tell Zammit, however I did call Zammit and told him that she had been interrogated about the directive."

Kimberley could not attend the court hearing, because of health reasons.