Minister's former canvasser demanded commission, floor tiles from supplier

Former Foundation for Tomorrow’s Schools procurement officer Edward Caruana demanded a 3% commission, in addition to a container of tiles from a supplier, the court heard this afternoon as the compilation of evidence against Caruana continued in court.

First to give his testimony was Philip Rizzo, former Chief Executive at the FTS. Caruana is accused of corruption and accepting thousands of euros in kickbacks in contracts relating to works and maintenance carried out in State schools.

Before Magistrate Donatella Frendo Dimech, Rizzo, who took the position in April 2016, said that on his first day at work he had received a message from Minister Bartolo about Caruana.

“I received three emails from the Minister in my first three days of work, asking me to treat Edward Caruana strictly but fairly,” Rizzo told the court. 

Bartolo had asked him to keep an eye on the man’s operations, and told him that he was “going to tell him about cheques that he distributes in Gozo.”

The next day, Rizzo received a second message from Bartolo asking: “how are you dealing with Dwardu?"

He said the minister appeared to be concerned about Caruana’s work, but had made no allegation of bribery. He had found out about the allegations from a story on the Sunday Times on 17 April 2016.

Five days later, on 22 April, Rizzo said the FTS Chief Operating Officer Tony Muscat, who was acting Chief Executive at the time, had sent him a memorandum alleging fraudulent requests for payment over works on toilets at a school in Gozo in August and September 2015. The seven claims amounted to €25,000, he said.

“I had asked why these were presented for my authorisation in my first week when they referred to works which had occurred some nine months before,” said Rizzo. “Tony Muscat replied that Edward Caruana had given them to him the day before and that he had not been consulted and could not authorise them.” 

The former CEO went on to say that no purchase orders were found relating to the works for which payment was being demanded. The works, he said, had been certified by architect Cornelia Tabone from Nadur Gozo.

"The invoices looked suspicious; three of them were not even signed and from the others it was clear that in one of them the contractor’s signature had been falsified. Even the papers were brand new, when they were supposed to have been 9 months old,” Rizzo said. 

Permanent Secretary’s irritable reply

Responding to a line of questioning by inspector Rennie Stivala, Rizzo said: “I ended up in a situation where I was being asked to authorise payment for works which predated my employment and which were already subject to suspicions. As the invoices were all for over €2,500, the maximum which he could personally authorise, he had sent a memo to the Permanent Secretary in the Ministry of Education - Joseph Caruana - asking for guidance. 

Rizzo had immediately received an angry phone-call from the Permanent Secretary, who is Edward Caruana’s brother, asking: “What do you think you’re doing? Don’t you think I know what these (invoices) are?”

In the light of this, Rizzo had issued orders to stop cheque payments, and instructed the Department of Finance not to pay out the monies. 

From Rizzo’s investigations, over three and a half years, a substantial amount of cheques from the Department to Caruana were found.

From €8.2 million in cheques, €5.5 million had been to 16 suppliers. "The payments to 12 of these 16 suppliers vary by more than 25%. All these cheques were distributed by hand or requested by Edward Caruana.”

“We aren’t owed anything by FTS”

Rizzo went on to say that he had been subjected to “internal pressure” to pay the seven claims.

That May he had held a meeting with the seven contractors who were awaiting payment. Placing the invoices before them, Rizzo had asked why none of them had filed legal proceedings to collect their dues. “They looked at each other, puzzled and said: ‘we aren’t owed anything by FTS.’” 

About a month later, in June 2016, Rizzo had met one of the contractors who had been absent for the meeting, Joe Carabott and asked him the same question. Carabott had replied that he had never worked in Gozo, adding that the signature on the invoice was not his.

Rizzo also confirmed that Edward Caruana would deal with all FTS work relating to Gozo. 

Towards the end of August, Anthony Muscat, Head of Operations had told Rizzo that Carabott had complained to him that the accused was ringing him up every day telling him not to finish the works he was carrying out at the school in Dingli on time “so that the Foundation will look bad.”

Caruana demanded 3% commission on a contract and a 40 foot container of floor tiles 

On 30 August, Rizzo had met Carabott at the Dingli school. “Aren’t they telling you what’s happening then?” asked the contractor who broke down in tears saying he could not pay Caruana and that he was making a loss on the contract. 

Caruana had been pressing him for a 3% commission on the value of the works and to supply him with a 40-foot container full of floor tiles of his choosing, he said. 

Rizzo ordered checks to be made at the Planning Authority, which confirmed his suspicions that Caruana had been developing a block of apartments in Rabat. 

He had immediately informed the Minister, who said he would send for Carabott. Two days later, Rizzo received an email from the Minister informing him that Carabott had denied everything, except for the pressure to drag out the works.

However, on 1 September, the minsiter had given instructions that Edward Caruana be transferred from FTS to his original post.

But when the Office of the Prime Minister came to be informed of the transfer, the Permanent Secretary had radically altered the decision by the Minister, ordering that his brother be transferred to another Ministry with a salary of €50,000. 

On September 22, 2016 Rizzo had asked for and was granted permission by the FTS board to hand over all the relative documentation to the police in order for Caruana to be prosecuted.

Rizzo had eventually tendered his resignation from the post on 1 December 2016. Asked why, he said that he could not continue to work when instructions that he had given about working hours and security of documents were being revoked by the Education ministry.

Inspector Rennie Stivala is prosecuting. Lawyers Stefano Filletti and Stephen Tonna Lowell are defence counsel to Edward Caruana.