2013 in review | The story of the year

On Sunday, 20 January 2013, MaltaToday published the kind of exclusive evidence that perhaps only exists in the most lascivious of journalists' dreams.

It was an invoice, made out to Dutch commodities giant Trafigura, by a former Enemalta consultant - Frank Sammut - for a 'consultancy fee' for the supply of oil to Enemalta. The money was paid into a Swiss bank account for a company Sammut owned in Gibraltar. The 2004 document confirmed the long-held speculation of kickbacks paid for purchases of oil for the state's energy corporation.

The Enemalta oil scandal, as it became known, rocked the island: a criminal police investigation was launched, seven persons arraigned, one man - perhaps the chief instigator - granted a presidential pardon to turn state's evidence; and the leader of the Opposition calling on the Public Accounts Committee - a parliamentary select committee - to hold its inquiry into the Auditor General's report on fuel procurement by Enemalta.

Twenty-two sittings later and 72 hours of hearings, Malta is none the wiser as to the scale of kickbacks that went on inside the national energy corporation or how this system could have gone on for years without anyone, not even at the political top, ever suspecting anything; let alone, reporting the mere suspicion of kickbacks.

Because as pardoned oil trader George Farrugia would later declare, the illegal commissions he started paying in 1999 almost set in motion a chain of kickbacks he would continue paying, up until at least 2006.

What has been uncovered so far is that George Farrugia bribed Alfred Mallia, Tarcisio Mifsud, Frank Sammut, Tancred Tabone and Ray Ferris - all former Enemalta officials - and it is still unknown whether other people knew of what was going on, but expensive Christmas gifts were given to high-ranking Enemalta officials, including different serving chairmen and one chief financial officer.

As the PAC eventually found out, lunches and dinners between Enemalta top management, George Farrugia and the oil companies he represented were "normal". Farrugia went to great lengths to portray himself as a man who kept his distance from politics and politicians. The experienced businessman also claimed that he may have been paying the kickbacks in vain as the oil firms he represented - TOTSA and Trafigura - were submitting the most favourable offers anyway. "I didn't pay the kickbacks to win the tenders but because the tenders were won," Farrugia claimed. "One either had to pay or you don't work at all".

Under Tancred Tabone's chairmanship, Trafigura and TOTSA won five out of 16 contracts. Under Alex Tranter, they altogether took 23 contracts. But the payments which Farrugia - then representing family business Powerplan Ltd - had to make simply to be left "to work", was unknown to the rest of the shareholder-directors, his own brothers.

Not only. In order for his brothers not to know he was paying cuts from the regular commissions Powerplan received as an importing agent, Farrugia set up his own company Aikon Ltd, to siphon oil commissions to a private bank account.

In 2010, the Farrugia brothers accused Farrugia of having funneled some €40 million from Powerplan to his personal company. The kickbacks were subsequently paid through Farrugia's own personal Swiss bank account. A portion of the commissions Farrugia received went through this account as well.

The oil trader - now in the business of lubricants - has so far been careful to dispel any allegations of his proximity to politicians, enduringly illustrated by the gift of an artisan Maltese clock to finance minister Tonio Fenech. Despite claiming that he "avoided" politics and politicians, Farrugia was copied in a series of email exchanges between Poweplan chairman Tony Debono, and Lawrence Gonzi and other Nationalist Party officials. Debono apparently would suggest how best to assist the PN, and then copy the resultant conversation with Gonzi to George Farrugia. "Seems we are making true in-roads," Debono told Farrugia in one of the email threads, which also included PN leader Simon Busuttil.

George Farrugia even went out of his way to contact Gonzi - then prime minister - to transmit a complaint from some Swiss acquaintances who had travelled to Malta; and that he held numerous meetings with former minister Austin Gatt, although he claims that fuel procurement was never discussed. Farrugia also said that he donated €2,000 in a contribution from family firm John's Group - something denied by the group - to Gatt's political campaign prior to the 2008 elections. The former minister has since declared he doesn't recall receiving such a donation.

Farrugia also declared he was privy to information as to when Tancred Tabone would be appointed chairman of Enemalta in 2004; or that clients of the Malta Oil Bunkering Corporation would be shifting to IBOL - Island Bunker Oils Ltd - the company Tabone and Frank Sammut secretly formed with two other co-accused, Francis Portelli and Anthony Cassar.

Farrugia claimed he paid $400,000 in commissions to Sammut and Tabone up until around 2006, when both men were silent partners in IBOL, a rival to state bunkering firm MOBC. While Sammut's contract as chief executive of MOBC was terminated in 2004, after a Cabinet decision for the MOBC to cease bunkering operations and instead assume the role of an oil storage depot, he became a consultant to Tabone that same year.

Farrugia may have availed himself of the genius of Frank Sammut in withholding the true scale of the commission he reaped on fuel sales to Enemalta from his own brothers and co-shareholders of Powerplan.

It was Sammut who devised a way of paying Farrugia a 'consultancy commission' that was paid back to him. In fact, Farrugia did not tell the PAC that Sammut had paid him a "double commission".

By storing diesel fuel at the MOBC tanks before June 2004, Farrugia received not just his regular commission of $1 per metric tonne of oil he sold for TOTSA, but Frank Sammut would pay him another dollar in the form of a consultancy fee, so that Farrugia could give him a 50 cent cut.