Prime Minister met Café Premier owner before election

Prime Minister Joseph Muscat has admitted meeting Café Premier director Mario Camilleri before the 2013 general election, adding he has always met and still meets entrepreneurs on a regular basis.

In comments to The Times, he insisted that the discussions that took place before the election did not focus on the €4.2 million deal to buy back the government’s public lease of the property, made after Labour was voted into power.

Negotiations on the deal only started after Muscat became Prime Minister, a spokesman said.

A damning, and embarrassing indictment of the way the new Labour administration rushed to pay the private company Cities Entertainment (CE) the sum of €4.2 million to buy back its public lease of the Café Premier, was published this week in the House of Representatives.

The report by the National Audit Office, requested by the Opposition, was spurred on by MaltaToday’s first report back in February 2014 when it broke the story that the Government Property Department (GPD) had withdrawn legal action for the rescission of CE’s lease, despite having fallen back on some €250,000 in ground rent.

Instead, on the advice of former GPD director and advisor to the Prime Minister, John Sciberras, the Cabinet approved a €4.2 million bailout to buy back the 65-year lease on the café in Old Theatre Street, Valletta; which money was used to pay the State back on outstanding rents, energy bills, VAT and tax, as well as Banif Bank loans of €2 million and a €210,000 fee to CE’s shareholder Mario Camilleri for brokering the deal with John Sciberras.

The NAO found a “lack of rigorous and documented consideration of other options” such as the legally justified rescission of the lease; “poor governance” with the Prime Minister’s negotiating team failing to involve the GPD from the initial stages of negotiations; an absence of documentation to sustain government claims that there was a danger to the overlying National Library by gas cylinders in the café; and that a 5% commission for CE’s shareholder was “unsubstantiated and… inappropriately included in the agreement.”