Whistleblower provides NAO with dossier on Rita Schembri’s role in casino bid

Whistleblower Philip Rizzo was interviewed earlier this week by the Auditor General and two other officers from the National Audit Office, in an inquiry into the operations of the OPM's Internal Audit and Investigations Department, and allegations that permanent secretary Rita Schembri breached the estacode's code of ethics.

Schembri, the IAID director-general, held meetings on private business for gaming company Far East Entertainment plc from her government office in Strait Street, Valletta, to discuss a bid for the acquisition of 60% of Vittoriosa's Casinò di Venezia.

She is currently out on long leave pending an investigation by the Auditor General, although no steps have yet been taken on the allegations - first revealed by MaltaToday - by the Public Service Commission.

On Wednesday, Philip Rizzo - one of several private individuals who discussed FEE's bid for the casino with Schembri - was interviewed at the NAO under oath, where he presented a comprehensive 90-page dossier of original correspondence covering all the involvement between him and Rita Schembri.

Rizzo was unsupported by legal counsel. "I was surprisingly calm when I attended to testify [but] discomforted by the eerie sensation of having to do so 'behind closed doors'."

The decision to have the Auditor General investigate MaltaToday's reports that suggested a breach of the public service management code's ethics by Schembri, was taken by principal permanent secretary Godwin Grima.

But in a letter to Auditor General Anthony C. Mifsud, Schembri asked that the NAO hold its inquiry on the operations of the IAID since she was appointed director-general, as well as other issues unrelated to the published emails suggesting she carried out private work for FEE plc, from her IAID office.

"My concern is whether copious 'original' email exchanges to and from a government address would be considered as mere 'smoke' as opposed to real 'fire'," Rizzo said, referring to the high-profile hearings of 2010 by the Auditor General in the BWSC procurement saga.

"I was merely a witness in this sad matter of lack of professional ethics in the public sphere. I have done my civic duty. If in my evidence, instead of fire, the Auditor General sees smoke then perhaps he can clarify his vision by interviewing Dr John Refalo, who I have discovered was also asked to meet with Rita Schembri at her official government offices on the private matter of the Casinò di Venezia deal."

Rizzo was carrying out financial consultancy for FEE plc in early 2012, when he was asked to liaise with Rita Schembri, described by FEE chairman Colin Perkins as "a trusted colleague".

According to Rizzo, lawyer John Refalo, whose legal office is also situated on Strait Street opposite the IAID office - also met Schembri on the casino talks. Refalo has since confirmed with MaltaToday that such a meeting did take place.

Rizzo said the NAO interrogation itself showed that the Auditor General was well prepared, direct in their questioning and respectful toward him as a witness.

"They had read [the emails] carefully, and listed matters on which they wished clarifications or confirmations. I am confident that I answered each by physically presenting documentary evidence proving my declarations without remaining doubt. I placed on public record not mere circumstantial evidence - or 'smoke' - but hard copy emails from and to the permanent secretary and others involved in the private deal, or real 'fire'."

Rizzo was also asked - the first question put to him - whether he had any hard evidence of actual payment to Rita Schembri from the FEE group, for her services.

"I could only offer 'circumstantial evidence' of a shareholding having been given by Perkins to Rita's lawyer, Dr Pio Valletta, for his having introduced the deal despite that [FEE chairman] Colin Perkins and the owner of the Casinò di Venezia had negotiated directly between themselves three years earlier. On innumerable other matters relating to Rita's extended advisory services to Perkins and the use of government offices for private business I provided evidence which is beyond any possible reasonable doubt at law."

Rizzo has also dispelled claims by Rita Schembri to civil service head Godwin Grima, that her 15 March 2012 meeting with him was a "once-occasion in her role as family friend to Colin Perkins".

"It's an unacceptable explanation. In an email, Perkins tell Schembri: 'Dear Rita, thank you so much for your very comprehensive and detailed response to what is a very complicated proposal', referring o the casino deal. In another email, well after her 'pro bono' assessment she carried out on me after out meeting, Perkins wrote: 'Dear Philip... we all need to work as a team, Rita, you, Pio, Edward and others here in the UK... I have made it very clear from the start that you participate with us in a shareholding."

Investigation
The alleged breach of ethics by Rita Schembri is being investigated by the Auditor General, but Grima has said that the Public Service Commission's involvement is mandatory at the conclusion of the process.

Inquiries by the Auditor General generally produce recommendations to government ministries on improving public service: a procedure that often skirts proper disciplinary or judicial proceedings on breaches and irregularities.

Similar recommendations were the result of audits into the acquisition of airline tickets by the foreign ministry in 2004, and a €2 million direct order to Group 4 Securitas from the Office of the Prime Minister.

The PSC's disciplinary boards have investigated numerous violations of the estacode by civil servants who carried out undeclared private work, often leading to direct sanctions.

Grima has not commented on the letter Schembri sent to the Auditor General in which she appears to have supplied the 'terms of reference' so that the investigation focuses on other matters beyond the allegations of undeclared private work and improper use of her government office.

Schembri's non-executive directorship with investment firm Brait SE has also been suspended since the start of the Auditor General's inquiry, after Grima had first given his approval to the directorship back in April 2012.