Resignation of councillors accused of fraud is ‘private matter’ - minister

Home and Parliamentary Affairs Minister Carmelo Mifsud Bonnici said the resignation of local councillors who are facing a probe by the European Commission's anti-fraud office over embezzlement, will be a private matter for them to consider.

“The local councils' association members will have to decide on their own within the association itself. I cannot comment and have to wait until the final judgement. Whatever the outcome, they will have to decide within the private association itself,” Mifsud Bonnici told MaltaToday, after addressing a conference by the LCA with the Assocation of Local Democracy Agencies.

Members of the Local Councils’ Association were charged on 11 January 2012 with defrauding the European Commission for the reimbursement of airline tickets at full cost rather than the purchased price.

Among those charged were a mayor, former mayor, vice mayor and two local councillors who had private accounts with the travel agency KD Travel Services Limited. The councillors charged were members of the LCA's executive committee, including the LCA president and Kalkara mayor Michael Cohen who said that all the accused pleaded ‘not guilty’ but was hesitant to discuss the case further.

“We pleaded not guilty to the charges. It is a sensitive case and we have to wait for the outcome. I cannot comment any further for the moment,” Cohen said.

The councillors, who are all pleading not guilty to fraud, are: Birkirkara deputy mayor Doris Borg; former Mellieha mayor Joseph Borg; San Lawrenz mayor Noel Formosa; Fgura executive secretary Oreste Alessandro; the president of the local councils' association and Kalkara mayor Michael Cohen; Qrendi local councillor Claudette Abela Baldacchino; former LCA president and Gzira councillor Ian Micallef.

The European anti-fraud office, OLAF, had noticed inconsistencies when processing reimbursements of a large number to the association of airline tickets which all cost the same amount.

The total sum reimbursed by the European Council amounted to around €96,000 but hand-written invoices provided by the travel agency involved, had conflicting airline ticket amounts between the actual cost and purchase price.

It was alleged that claims for reimbursements were made for the full amount rather than the purchased price and the difference was then accredited to Association’s account or directly to the members’ personal accounts.

The director of KD Travel Services Limited Kenneth DeMartino and general manager Paul Cortisand were also charged with fraud and both pleaded not guilty to the charges.

OLAF investigations focused on a period of three years between 2004 and 2007 and ceased documentations included sales and purchasing ledgers, accounts, bank statements and emails.

Investigating officer Neil Thomson from OLAF stated that the divergences came to light as a result of parallel invoicing and concluded that similar cases had been reported as a result of inappropriate travel guidelines and misinterpretation in other countries.