Inside information likely in Gaffarena property deal

Inside information from a highly-placed official inside the Government Property Division would have allowed the exact identification of lands that Marco Gaffarena needed for his own personal and business interests, a senior government source has told MaltaToday.

But planning parliamentary secretary Michael Falzon has so far resisted calls for an internal investigation into a massive €1.65 million compensation to Gaffarena in cash and select land parcels, for half-ownership of a Valletta building housing the government offices of the BICC.

Gaffarena originally took ownership of 25% of the Old Mint Street property in 2007 for €23,294, and then bought another 25% for €139,762 in February 2015.

Gaffarena was compensated €822,500 in cash and lands in January 2015 for the government’s expropriation of his 25%; and then another €822,500 in cash and lands in April 2015 for the other 25% – two months after its purchase.

Now the Opposition wants an investigation by the Auditor General, particularly demanding whether it was Gaffarena himself who chose the lands granted to him in compensation.

“All these lands have a strategic location and value and in one way or another, he has an interest in them, for example touching on lands he already owns, like those in the White Rocks area which are earmarked for the development of hotels.”

Shadow justice minister Jason Azzopardi declared that Gaffarena must have been informed of the government’s intention to expropriate the building beforehand, saying the settlement “stinks of corruption.”

While Falzon has insisted that the deals were regular and that there was “no political hanky panky” involved, it is clear that the lands chosen areintended at benefiting him directly: one of them is in Sliema, where Gaffarena intends building a block of 10 apartments over four storeys.

But the chronology of events may show otherwise.

On 17 May 2013, Gaffarena bought a two-storey Sliema townhouse on 74, Manwel Dimech Street for just €72,000 – quite a catch for a prominent location in an urban conservation zone.

Marco Gaffarena applied on 6 May 2015 to build 10 apartments in Sliema. The €65,000 shop was part of the government compensation he got in January, after first buying the house back in 2013 for just €72,000

Then on 10 April 2015, the government granted him in compensation the shop numbered 73, Manwel Dimech Street, underlying the house he bought. The GPD valued the shop at just €65,000, because it was not a freehold property and still under a temporary emphyteusis that will expire in 2016.

A month later on 6 May 2015, Gaffarena applied with MEPA to demolish the townhouse and shop for the construction of five garages, 10 apartments spread over four levels, and a penthouse. An application for this development was rejected in 2012 after MEPA’s Heritage Advisory Committee objected to the application.

Clearly, the GPD obliged Gaffarena in offering under-valued property that would increase the value of his existing property and future development – a million-euro property jackpot.

Gaffarena was also extending his business interests. With the same family that sold him the Sliema house, on 4 May 2015 he started buying off their shares of an old 1878 lease for the land on which Mark & Spencers currently stands on the Sliema Strand.

The 150-year lease will expire in 2028, but Gaffarena has so far acquired a 1/40 share of the land for €3,500, and another 3/40 share for €10,000.

On Thursday, Michael Falzon again told MaltaToday: “As repeatedly stated there was no political intervention in this, or in any other transaction. The Government Property Department’s architect/s acted in their own professional capacity and without any direction of whatever sort.”

He also insisted that the parliamentary secretariat does not interfere in GPD’s daily running. “All the normal legal and administrative rules and regulations were duly observed by the GPD,” Falzon said.

But departmental sources have told MaltaToday that Gaffarena was seen at the Lands Department offices in the company of a member of Falzon’s parliamentary secretariat.

Clint Scerri, a member of Falzon’s secretariat, would neither confirmed nor deny this when contacted by MaltaToday,

When asked point blank why he had accompanied Gaffarena at the Lands Department, a hesitant Scerri asked: “which time are you referring to?”

Pressed to explain why he was at the Lands Department with Gaffarena in recent months, Scerri said “no comment”.

Asked whether he denied being at the Lands Department with the developer, Scerri repeated that he did not wish to comment.

At the time of going to print, no answers were forthcoming from Falzon on whether he will request an investigation into the possible leak of sensitive information to Gaffarena.

Falzon also failed to answer whether he was concerned with the series of coincidences in the expropriation of the Old Mint Street building, and how the lands given to Gaffarena had been selected and valued. 

On Monday, Falzon told journalists that the transaction was a completely regular one and that no criminal investigation was necessary.  “The only reason it made the news was because of his surname,” Falzon said of Gaffarena.

Gaffarena is a well-known sponsor of a number of Labour candidates, especially in the sixth and seventh electoral districts, and a petrol pump station he owns in Qormi is associated with a number of illegalities that were recently sanctioned by the Labour administration.