Oil bribes: Mallia says he was bound by professional secrecy

Home Affairs Minister Manuel Mallia has defended himself from accusations by the Opposition that he was privy to allegations of kickbacks in the sale of fuel to Enemalta, during his time as a lawyer for Powerplan Ltd.

Mallia was employed by the company to secure a settlement from George Farrugia, who managed family business Powerplan, after he was accused by his brothers of siphoning funds in oil commissions from Trafigura and TOTSA, among others, and into his personal company Aikon Ltd.

Farrugia has turned state's evidence after being granted a presidential pardon in February 2013 to cooperate in a criminal investigation on the bribery inside Enemalta on the supply of oil.

But Mallia yesterday said that divulging any information he had obtained while serving as legal counsel to Powerplan would constitute a "crime as contemplated in the Criminal Code".

The PN yesterday accused Mallia of not coming forward with allegations of bribery to the police. "Mallia must take political responsibility for what Farrugia told the PAC," the PN said, referring to Farrugia's testimony in the public accounts committee, in its inquiry on the Auditor General's report on Enemalta's fuel procurement policy.

Farrugia said that in 2010, Mallia was already aware of the bribery taking place on fuel procurement. "According to Farrugia, Mallia actually threatened him he would report him to the police unless he reaches a settlement with the John's Group," the PN said.

But questioned by MaltaToday on whether he should have gone to the police with the information after deciding to contest the general elections, Mallia insisted that anything that may have been said during the meetings with his client were "strictly confidential".

Mallia's law firm was appointed legal counsel to Powerplan during a company board resolution dated 27 September 2010, signed by the five Farrugia brothers, of the John's Group. The board resolution stated that the "appointment relates specifically to the misappropriation of funds by the said Mr [George] Farrugia against the company".

The minister pointed MaltaToday to correspondence - which he said could not be divulged due to professional secrecy - that "shows very clearly that the subject under discussion were the fraudulent acts committed by George Farrugia against the company".

During Monday's PAC, Nationalist deputy leader Beppe Fenech Adami said that all the Farrugia brothers had known all along that kickbacks were being paid for the supply of oil to Enemalta, and that Farrugia had been siphoning off money payable to Powerplan to his own company Aikon, which he set up without the knowledge of his brothers.

According to Fenech Adami, Mallia had used this information as leverage to convince Farrugia in reaching a settlement with his brothers, threatening that he would report the allegations to the police.

On his part, Mallia insisted yesterday that the criminal activity he had referred to was the fraud and money laundering Farrugia had committed. "It is indeed very strange for lawyers to spin for their political advantage certain known legal principles. It is normal practice that a lawyer, on behalf of his client demanding payment of damages as a result of fraud and money laundering, writes that if payment is not made criminal action will be taken."

According to Article 257 of the Criminal Code, a lawyer is liable to a two-year term of imprisonment for divulging any professional secret confided in them, except when compelled by the law or if this pertains to any offence under the Dangerous Drugs Ordinance, or the Prevention of Money Laundering Act.

Mallia added that anything which has been said during the "one meeting" held with George Farrugia with his clients was "strictly of a legal, professional nature".

Mallia denied giving any third party any information or detail on this case, and that he was no longer involved in this legal matter after March 2011.

"Dr Beppe Fenech Adami should hopefully know that if I were to divulge any information on any case, it is a crime as contemplated in the Criminal Code," Mallia said.

Article 642 of the Criminal Code also states that lawyers cannot be forced to reveal any knowledge derived from the professional confidence placed in their assistance or advice". This gives lawyers the privilege that they cannot be forced to divulge confidential information, apart from being also prohibited by the advocates' code of ethics.

But according to Fenech Adami, himself a lawyer, who spoke during the PAC, Mallia's clients were the Farrugia brothers, and not George Farrugia - suggesting that reporting the case to the police would not be a breach of professional secrecy.

It was pointed out during the PAC by parliamentary secretary for justice Owen Bonnici that Farrugia was still a Powerplan Ltd shareholder and therefore, still involved with the company.