Enemalta account holders not investigated because of political decision

A political decision taken by the goverment has stopped police investigators from charging Enemalta account holders involved in the case of tampered smart meters, a police inspector has told a court.

According to the witness, police investigators were precluded from approaching and interrogating those who could potentially be key witnesses in the alleged bribery of Enemalta employees who hacked into hundreds of smart meters according to unverified, government claims.

Taking the witness stand, prosecuting officer Daniel Zammit said that due to the government decision, it would be "inopportune" for police to interrogate the account holders. The inspector was giving evidence in the compilation of evidence against Enemalta employees Emanuel Micallef and Richard Gauci, who stand charged with accepting bribes, damaging private property and defrauding Enemalta.

The two were arraigned and remanded in custody on 14 February, after pleading not guilty to the charges. On the same day, 55-year-old Paul Pantalleresco admitted to the same charges and was jailed for two years and handed a general, perpetual interdiction.

In October 2013, Enemalta’s theft control unit started an investigation on a number of smart meters that had been tampered with when they registered under-reading. Reports led the corporation to believe that a smart meter had been opened in Italy, tampered with and then installed by Enemalta personnel.

Enemalta’s internal investigation

The police inspector said that further analysis of Enemalta’s consumption and distribution system revealed the possibility that a number of meters had been tampered with. Enemalta then launched an internal investigation to test suspected smart meters. A number of tested meters showed that tampering had indeed occurred and Enemalta’s records confirmed that these meters had been installed by three of its employees, including Emanuel Micallef and Richard Gauci.

On 12 February, an arrest warrant was issued for the accused. Micallef refused to be assisted by a lawyer during interrogation but Gauci requested the assistance of lawyer Dominic Micallef. Following their arrests, the two Enemalta employees were suspended from work.

In their first police statements, both men denied any connection with the tampered smart meters. However the investigators learnt that people who were interested in having a tampered meter installed could approach the fitters, who had a stock of meters ready. The tampered smart meters were installed against an additional payment of around €1,000, but there were instances where the amount was less.

However investigations have not yet established the identity of the actual persons who modified the smart meters. “If such are still available, or if more tampered meters have been installed, then there are others involved in the case,” inspector Zammit said. Until now investigations have established that a number of smart meters were tampered with and the people who had installed them. “Yet this does not rule out the existence of middlemen”, he said. Enemalta keeps records of all installations, including who fitted the unit and to whom it was given.

Meters were replaced for no reason

Mantoine D’Ambrogio, Enemalta’s internal auditor, told the court that Enemalta’s former CEO, Louis Giordimaina, was personally involved in the investigation run by the corporation.

Three suspicious smart meters received from Italy were checked and it was revealed how tampering with the circuit board had resulted in lower readings. D’Ambrogio held a meeting with Enemalta’s technical team and after agreeing that such tampering amounted to criminality, the case was handed over to the police. The internal auditor concluded that consumers could be given an amnesty in connection with the case but this was a political decision.

Primary investigations showed a pattern of newly installed smart meters being replaced with another meter for no logical reason. “We found 2000 such cases and until December we tested 132 meters. Upon receiving new testing equipment Enemalta’s investigation intensified, with meters being tested on-site,” the auditor said. Another pattern showed that new smart meters started with a zero reading, but we found 70 meters that were installed with a non-zero reading. Emanuel Micallef and Richard Gauci were the installers of a number of these meters.

D’Ambrogio told the court that Enemalta is only testing the accuracy of the meter’s readings and not how or if it had been tampered with, as such a test would destroy the meter. “However there is no doubt that a meter under-reads only if tampered with,” he explained.

Meters under-read by 45%, 70% and 91%

Next on the witness stand was engineer Carmel Scerri. As manager in charge of Enemalta's meter section, Scerri was responsible for all replacements of installed smart meters. “The investigation kicked off at around June 2013. A replaced smart meter previously installed in a residence in Attard was benchmark-tested and found to under-read by 70%. A number of meter readers were informed of another meter that was tampered with in Attard. While no sign of tampering was found on the outside, the meter gave readings of 45%. A similar case in Fgura under-read by 91%,” the engineer explained.

Chinese company Gaifa manufactures all smart meters imported by Enemalta, and orders are processed through International Business Machine (IBM). However IBM do not test the meters but simply process the paperwork related to the orders.

Last July, an Italian delegation from Enel was in Malta and was shown one of the three single-phase meters that had been found to under-read. The test conducted by Enel confirmed Enemalta’s findings but could not outline the reason for the inaccuracy. “At the time we had not opened the meters, as they cannot be repaired, so we decided to X-ray it,” the engineer explained. After an X-ray test was done at the airport and revealed nothing, experts from Enel believed that the meter had been opened by professionals. The Italian company took the meter to run tests at its laboratories in Italy.

As the witness was about to exhibit Enel’s report, defence lawyers objected, saying the court was duty bound to check if the report was simply Enel’s opinion. Magistrate Carol Peralta upheld the objection saying the report would prejudice the position of any court-appointed expert. However since there is no local expert that can be appointed by the court to examine the meters, the court said the appointment of a foreign expert is not ruled out.

Scerri continued that Enel found that the meters they tested had been glued back together. They also noted that components on the circuit board that registered consumption were missing. Both the witness and Enel technicians ruled out bad manufacturing of the meter.

Accused denied bail

At the end of the sitting, Magistrate Carol Peralta denied the accused’s request for bail, explaining that upholding such a request would result in public alarm.

The prosecution is led by inspectors Daniel and Roderick Zammit. Lawyer Joe Giglio is appearing for Emanuel Micallef while Dr Domenic Micallef is representing Richard Gauci.

Lawyers Franco Debono and Marion Camilleri are appearing for Enemalta.