Corruption at Enemalta and the oil scandal

Email correspondence, bank transfers and online chats revealed by MaltaToday show how businessman George Farrugia played a pivotal role in Enemalta's oil procurement decisions, while oil commodities companies Total and Trafigura worked closely with Enemalta's top officials, the former MOBC chief Frank Sammut and Farrugia himself.

The private correspondence could point to the reasons for Enemalta's long business commitment with Total and Trafigura, two of its major suppliers.

George Farrugia not only kept up email correspondence with interested parties, but also met up with Enemalta officials and also allegedly Minister Austin Gatt and oil companies representatives in a bid to ensure the lucrative sale of oil to Enemalta. 

Invoices from Trafigura, similar to Frank Sammut's kickback invoice published last week in MaltaToday, show how businessman George Farrugia received commissions noted down as a 'consultancy' for specific sales of oil to Enemalta from Trafigura. The fees were deposited in Farrugia's Swiss bank account in Banque Privée Edmond de Rotschild in Geneva.

Also revealed are transcripts of online chats between Farrugia and Trafigura and Total officials, dating as recently as 2010. 

They include conversations between Nicolas Vernerey from Total, who asks George Farrugia about a "guy inside" Enemalta, and other bizarre chats with Trafigura's Naeem Ahmed. The extent of Frank Sammut's business interests show that while the MOBC chief executive was 'objectively' consulting Enemalta on the choice of the oil purchase, he had entered into contractual agreements with Trafigura for sale of oil in Morocco under the guise of the company Bahamas Co.

Trafigura's Naeem Ahmed also tells George Farrugia in one piece of correspondence: "As promised I have tried to increase the commission rates, I have been unsuccessful, so for all business for 2004 commissions it must remain 10 per cent and will only increase to 15 per cent for all new business for 2005."

The extensive correspondence in MaltaToday's hands makes it difficult to decipher whether Enemalta officials are acting in a bona fide capacity or not, with many top officials invited for dinners in Malta or London or Geneva; and in the case of Enemalta Chairman Alex Tranter and Enemalta chief financial officer Pippo Pandolfino, in Miami.

George Farrugia's extensive knowledge of Enemalta's tendering process seems to have no limits: in an email to George Stassis, managing director of Moil Coal Company Ltd, a multinational company involved in the sale of petroleum products, he writes in relation to the privatisation of Enemalta's petroleum division on 16 May, 2008: "Hi Partner, Only 4 bids have been submitted. Bids as follows, Falzon (no chance), BB Energy (no chance), Island Bunkering Oils (Main competitor) and the best PPL. Best Regards and thanks again for your trust in me. George Farrugia".

Who is Frank Sammut?

The man at the centre of allegations for having received commissions from Trafigura for the supply of oil to Enemalta, was paid a Lm41,000 golden handshake (€95,000) when his contract was terminated in 2004.

It is believed his contract was terminated on the cessation of operations of MOBC, of which Sammut was chief executive, as a bunkering operation when it was sold to the government as part of a recapitalisation of Enemalta.

Sammut, who has been questioned by the police, was revealed by MaltaToday on Sunday to have been the beneficiary of monies paid by Trafigura into a Swiss bank account, that were deposited at a Gibraltar-based company.

"The contract was terminated for the reasons stated in the letter by the chairman to Mr Sammut, which has been published last Monday. Sammut, as per the contract's terms, and following legal advice, was paid a severance package of Lm41,090.28," a finance ministry spokesperson said.

A contract supplied by the ministry shows Sammut was engaged as CEO of the MOBC on 1 August 2000, on an annual salary of Lm12,000 (€28,000), a Lm1,000 (€2,300) performance bonus, an executive car and petrol allowance, mobile phone and health insurance cover.

Sammut, a petroleum chemist by profession, joined MOBC in 1988: he was an Enemalta director between 1987-1990; a member of Enemalta's fuel procurement committee between 1987-1998; a consultant to the Enemalta chairman between 1992 and 1994.

Sammut was also an employee of the Mediterranean Oil Bunkering Corporation, the bunkering arm for Enemalta, between 1988 and 2004.

By 2004, when he was chief executive, his contract was terminated by a Cabinet decision when MOBC was sold to the government to recapitalise Enemalta, and when it ceased bunkering operations.

The finance ministry however has also added that he became a consultant to Enemalta chairman Tancred Tabone between August 2003 and August 2004 on a one-year contract where he was tasked with "reorganising and rationalising" the storage of petroleum products at Enemalta. He was paid Lm8,000 (€18,600).

His consultancy contract obliged him "not to put himself in a position where there is a conflict between his personal interest and his duty towards the Corporation".

Austin Gatt's former head of secretariat Claudio Grech has also defended the former investments minister, who had been responsible for Enemalta at the time, pointing out on TVM's Bondiplus on Tuesday that Sammut had been serving as a consultant to Tancred Tabone at the time of the alleged kickbacks.