Lack of security in Enemalta procurement, $500,000 ‘severance’ for Frank Sammut

Policy guidelines on activating the fuel procurement committee's generic email account were not adhered to in four instances out of a possible seven, the Auditor General told the parliamentary accounts committee today.

Procedure demanded that bids submitted via email and later analysed by Enemalta's FPC, had to be followed by a resetting of the email's password to ensure security.

Information provided by the Malta Information Technology Agency (MITA), showed there had been four instances when this request was not made by the FPC, raising questions on why a new password had not been requested.

It transpires that on two occasions, the contracts were awarded to TOTSA, the company represented by oil trader George Farrugia, now State's evidence on the corruption charges against former Enemalta officials.

"By way of example, during an FPC meeting on 12 May 2011 which awarded a contract to TOTSA, no calls were made to MITA to reset the password. However, two calls were carried out from Enemalta to MITA three days before and another one the following day," deputy auditor general Charles Deguara said.

The NAO said it was not aware why the calls were made. It however raises questions on the integrity of the contracts awarded.

The generic email account was set up in April 2011, three months after the first policy regulating fuel procurement was drafted.

Frank Sammut was paid €500k to leave IBOL

It was also revealed throughout the PAC that Frank Sammut, formerly the CEO of Enemalta's bunkering arm Malta Oil Bunkering Corporation, had been paid €500,000 by business partners Tancred Tabone, Francis Portelli and Anthony Sammut to leave their private company.

Island Bunker Oils Ltd (IBOL) was set up in 2002 by Sammut, with Tabone then Enemalta chairman as a silent partner, together with Portelli and Sammut.

Before 2002, bunkering services were carried out by MOBC.

Justice minister Owen Bonnici quoted from a 2004 report by intelligence magazine Bunkerspot that concerns had already been flagged on Frank Sammut's involvement as MOBC chief, reported then to be planning to leave the company to become an independent consultant. It also reported suspicions of him being closely linked to IBOL, which was to be set up.

The report alleged that IBOL might inherit "some or all of MOBC's business and could be favoured in the award of bunkering contracts".

Bonnici said that in 2004, minister Austin Gatt had told parliament that nobody from MOBC had a private interest in the bunkering industry.

"It then transpired that IBOL started operating in 2002, led by Francis Portelli and Anthony Cassar. Tancred Tabone and Frank Sammut had an interest, but this was never declared. And to hide that interest, they sought advice from Switzerland," Bonnici said, reiterating that at the same time Tabone was Enemalta chairman and Sammut consultant to Enemalta on fuel procurement.

Sammut, Bonnici added, left his consultancy position and went to IBOL for six months. Sammut, who eventually dropped out of IBOL, was paid $500,000 in cash to leave IBOL.

Bonnici said that from the ongoing corruption case in court, it transpired that every time Trafigura - for whom trader George Farrugia was its agent - won diesel barge transfer contracts, it paid kickbacks to Frank Sammut at $1 per metric tonne of diesel.