OPM – ‘Rita Schembri denies consultancy to casino bidder’

The Office of the Prime Minister has said that Rita Schembri, the permanent secretary who heads the Internal Audit and Investigations Department (IAID), has denied to Principal Permanent Secretary Godwin Grima of having given consultancy services or advice to a gaming company that was interested in purchasing a 40% stake in the Casinò di Venezia.

The denial comes in reply to questions about the IAID chief's role in providing advisory services to Far East Entertainment Group plc (FEE) as revealed by this newspaper on 4 November.

While Schembri has official approval from the principal permanent secretary to hold a non-executive directorship in Brait SE, a private investment holding company, this directorship is understood to be unconnected to the services she has given to FEE in their bid to acquire a stake in the Casinò di Venezia.

MaltaToday has seen evidence that shows that in the days prior and on 15 February 2012, Rita Schembri was involved to some degree with Maltese lawyers acting on behalf of FEE Group, on a proposed sale of the casino's 40% stake by Vittoriosa Gaming Ltd's chief executive Fernando Orlandi.

The Casinò di Venezia in Malta is part-owned (40%) by the Venice municipality's casino, and the rest by Bet Live Ltd.

That same week, Schembri was recommended by the chairman of FEE Group, Colin Perkins, to meet up with other local representatives to discuss the company's investment strategy.

Schembri - described as a "trusted colleague" by Perkins - was aware of the contacts being made on the proposed bid for the casino stake, having at one point on 25 February proposed a 2pm meeting at Valletta Buildings in South Street, Valletta - which happens to be the same address of the IAID offices.

The OPM has not confirmed whether Schembri has denied setting up this meeting at the government office of the IAID.

Another meeting was then set up with Schembri on 15 March, which proved to be a conclusive discussion on the casino bid and the investment proposal.

The Office the Prime Minister has told MaltaToday that Schembri has denied giving consultancy services or advice "to any business".

On his part, the Prime Minister said he was not aware of Schembri's directorship in Brait SE - a Luxembourg-based South African investment firm - for which she received approval by Cabinet secretary and principal permanent secretary Godwin Grima on 12 April.

"Questions regarding to the related fees and conditions should be addressed to the individual concerned," the OPM said when asked whether Schembri's directorship of a company with various financial interests was suitable for a high functionary involved in sensitive investigations and audits.

"The Prime Minister expects that public officers are not engaged in activities that bring them into conflict, real or perceived, with their duties; the Prime Minister instructed the Principal Permanent Secretary to make sure that this applies to this case."

On Sunday, Grima told MaltaToday he was only aware that Schembri was a non-executive director of Brait, which raises finance for private business.

Grima said that Schembri informed him in late January 2012 that she had been invited to become non-executive director at Brait and that her input would entail only four meetings a year. She was appointed director of Brait on 30 March 2012.

As required by the public service management code, Schembri formally asked for permission to hold this private interest on 13 March 2012.

Grima also said Schembri assured him that this work could in no possible way impinge on her duties. "She felt that being involved in such a function in the private sector would serve her in good stead in her audit and risk assessment duties in the public sector... she gave a commitment that she would avail herself of vacation leave in order to attend board meetings, whether these are held in Malta or abroad."

The public service's management code allows public officers to engage in any form of business or employment outside their official duties, as long as there is no conflict of interest with their official activities.

Rita Schembri was appointed permanent secretary in September 2012, while serving as director-general of the IAID. A member of the supervisory committee of the EU's anti-fraud office OLAF, Schembri was aware of the OLAF investigation into former commissioner John Dalli as early as 4-5 July.

Doubts raised by former EU commissioner John Dalli, who claimed Schembri seved a dual role in knowing about an OLAF investigation while serving as a member of the supervisory committee that vets the investigations, were met with a defence from the Prime Minister, who has hailed the IAID director for her "honesty"; while Grima said that at no stage was Schembri in communication with the Prime Minister on the Dalli investigation.

The OLAF supervisory committee also announced that Schembri had withdrawn from the committee's examination of the John Dalli case, which the committee must now evaluate to see whether it was handled in respect of his fundamental rights, on 17 October.