Gonzi: Principal Permanent Secretary to determine ethics’ breach in Schembri case

Prime Minister Lawrence Gonzi has declared it will be the responsibility of principal permanent secretary Godwin Grima to evaluate an alleged breach of ethics by one of the OPM's top civil servants, revealed by MaltaToday to have used government offices to hold talks on a private bid to buy a 60% stake for the Casinò di Venezia.

"This is something for the head of the civil service to evaluate, to carry out his own analysis and come to his own conclusion," Gonzi told MaltaToday yesterday after this newspaper revealed correspondence that confirms Rita Schembri, the head of the internal audit and investigations department and a member of the OLAF supervisory committee, was involved in the casino bid.

"So far it does not result to me that there was a breach of the code of ethics," Gonzi said, referring to a "request for approval" from Schembri to Grima to take up a non-executive directorship in investment firm Breit SE.

It is understood that Schembri's role in FEE's bid for the Casinò di Venezia is not part of her directorship in Breit SE.

MaltaToday has revealed a detailed trail of correspondence handed to this newspaper by a whistleblower that confirms permanent secretary Rita Schembri, used her government office at Valletta Buildings, on South Street in Valletta, to discuss an investment proposal by Far East Entertainment Group plc to acquire a 60% stake in the Casinò di Venezia, of Birgu. Apart from using the IAID offices for a private business affair, Schembri's relations with the FEE Group and their interest in the Birgu casino did not have the official approval of principal permanent secretary Godwin Grima.

These facts form the basis for an alleged breach of the public service management code's code of ethics.

"I go along with what was declared by Dr Grima, and he is following the process... with everybody having to shoulder responsibility as according to the circumstances," Gonzi told this newspaper yesterday evening.

The correspondence seen by MaltaToday is clear in establishing the familiarity between Schembri and FEE chairman Colin Perkins, who describes her as a "trusted colleague"; as well as her deep involvement in the casino acquisition together with another associate, Maltese lawyer Pio Valletta, who is earmarked for a shareholding in the new casino ownership.

"She described Valletta as her 'representative', and that he was involved in this investment proposal," the whistleblower who met Schembri at the IAID offices in Valletta for a meeting that lasted 70 minutes, to discuss the casino bid, told this newspaper.

Schembri is shown to have been intimate with the details of the casino bid, copied in emails where Valletta asks for guidance over the proposed lease-and-buy deal from Ferdinano Orlandi - CEO of Vittoriosa Gaming Ltd, the operators of the casino.

In one email, FEE chairman Colin Perkins disputes the option to buy out Vittoriosa Gaming: "Rita has kindly and sensibly pointed out a lot of pitfalls," he tells Valletta of his intention not to buy, but lease the casino.

Schembri also set up a meeting at the IAID office with one of the local advisors on the casino bid at her IAID office in Valletta, where she held a 70-minute meeting at 9am to discuss the ramifications of the casino investment proposal.

The OPM so far has told MaltaToday the prime minister is unaware of Schembri's business interests, and that the IAID chief had "denied" to principal permanent secretary Godwin Grima of having given any consultancy or advisory services to any private company.

Schembri was given official approval by Grima to take up the Breit directorship, for which she attends four meetings annually, on 14 April, 2012 after requesting approval in January.

Although her official remuneration is not known, fellow Breit directors attending the quarterly meetings earn between €70,000 to €200,000. The OPM is not aware of her remuneration and has washed its hands of whether a handsomely-paid company director should be allowed to retain such a high position in the civil service: "Questions regarding to the related fees and conditions should be addressed to the individual concerned... 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."