Fearne, Scicluna back in court as defence team raise questions on inquiry experts, evidence
The defence raised questions about the apparent lack of safeguards in the appointment and vetting of expert witnesses, in what appears to be preparing the ground for them to request that this evidence also be expunged
Defence lawyers are expected to attack the credibility of the experts appointed during the magisterial inquiry which led to charges against former deputy Prime Minister Chris Fearne, former Finance Minister Edward Scicluna and 13 other defendants.
The compilation of evidence against the 15 defendants, who are accused of fraud and misappropriation, continued before magistrate Leonard Caruana on Tuesday.
Throughout today’s sitting, the defence challenged the admissibility of the evidence gathered by inquiry, with Debono arguing that the search warrant's implications and execution violated legal standards. Prosecutor Giancarlo Refalo countered, asserting that the court's role was to compile evidence, not to adjudicate its legality at this stage.
At one point, the defence asked the court to order that all documents and data that had been seized from DF Consultancy Services Ltd by the police be expunged from the evidence.
Lawyer Andrei Vella was called to the witness stand to give evidence about his client, Gateway Solutions Ltd. But Vella informed the court that he was unable to do so as he had not been released from professional secrecy. He explained that he had not sought his client’s clearance to testify because he had not been in contact with that client for several years, while stressing that the privilege belongs to the client.
Ex-Police Inspector details search procedures
Former Police Inspector George Frendo also provided testimony, responding to questions from lawyer Franco Debono about his involvement in searches at the offices of DF Consultancy Services. Frendo recalled that he had been assigned to search the offices of DF Advocates and lawyer Jean Carl Farrugia.
Debono suggested that Farrugia was not listed in the warrant, but Frendo maintained that it listed his residence, while clarifying that the search was not limited to DF Consultancy Services.
Frendo said that there were no suspects at the time of the search, and that the police had been acting on magistrate-issued warrants to gather evidence, which included files and computer hardware.
When pressed by Debono on whether he had taken steps to protect client privilege, Frendo replied that the inquiring magistrate had provided a list of keywords for the search and so any documents featuring these keywords were seized.
Defence challenges the validity of the evidence
Debono pointed out that the seized items bore the letterhead “DF Advocates,” and not DF Consultancy Services, but Frendo repeated that the police had seized any document matching the keywords provided by the magistrate.
The lawyer argued that the wording of the warrant indicated suspect status, which triggered rights to legal assistance which, he claimed, were not observed. He asked the court to expunge the evidence seized in those searches, asserting that it had been obtained illegally.
Witnesses also detailed the procedural aspects of expert witness appointments and payment structures within the court’s administration system.
Witness Alison Delecia, former PA to Vitals’ corporate director, testified about her work with lawyer Deborah Chappell, adding context to Vitals’ legal operations. Meanwhile, accountant George Gregory gave evidence detailing the financial intricacies of the Vitals agreement, indicating the complex contractual obligations and negotiations involved.
The sitting concluded the defence raised questions about the apparent lack of safeguards in the appointment and vetting of expert witnesses, in what appears to be preparing the ground for them to request that this evidence also be expunged.
Magistrate Caruana adjourned the sitting until tomorrow, for final submissions.
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The defence limits the request to a list of foreign experts, named in the inquiry. Debono suggests the witness also bring evidence showing how their fees were calculated. “Was it time-based? Opinion?” Sciriha asks.
The defence, which has been preparing the ground to discredit the expert witnesses practically since the arraignment, now appear to be ramping up their efforts.
Matthew Farrugia
Prosecutor Francesco Refalo says he doesn’t want to deprive the defence of any evidence, but questioned the relevance of this information for the purposes of prima facie.
The court asks the witness whether she would be able to obtain this information by 9:30am tomorrow.
“I will try. I have to see what data I have. The experts would not have just one inquiry. I would have to see the payment voucher,” says the witness, explaining that this information was not readily available on the payments database. Matthew Farrugia
“Experts are appointed by the inquiring magistrate. We handle the payments. They are either given a payment voucher or submit an invoice for payment.” “We always ascertain whether the invoice is registered before paying,” adds the witness.
“Once there is a valid voucher or invoice, I will pay. I do not delve into the rates or question the amounts.”
There were different payment rates for experts, which were not always the same, says the witness.
Debono asks her to submit a list of experts assisting inquiries. The magistrate asks whether this information is readily available. It is not, she replies.
The magistrate asks whether this evidence is vital for the purposes of prima facie, or whether it could be submitted at a later stage.
The court suspends the sitting for two minutes to allow the defence to take a joint decision on this.
Matthew Farrugia
Gregory and lawyer Katrina Borg Cardona had attended, replies the witness. Borg Cardona, who was married to Aaron Mifsud Bonnici, had passed away due to illness in 2021.
Franco Debono asks the witness whether he or anyone else from RSM had been asked to give evidence during the magisterial inquiry. “No.” “Had the police sent for you, maybe?” “No.” “So nobody sent for you to hear your version of events,” asks the lawyer. The witness confirms.
Farrugia Sacco asks whether the negotiation committee had received any information regarding due diligence. “No. Nothing.”
“Had the steering committee received any related reports or studies?” “Neither,” Gregory replies. He steps off the stand. Matthew Farrugia
The witness was unable to remember whether the negotiation committee appointed the steering committee but said he imagined it would be so. Matthew Farrugia
The same presentation shown at OPM had been shown at GA. “Ganado had been guiding us as to how the RFP for the concession was to be issued.” Matthew Farrugia
“Had you met the shareholders?” asks the lawyer. “Ram Tumuluri was involved in the negotiations. There was another foreign person, whose name I can’t remember. He only showed up twice during the negotiations.” Witness is uncertain whether the second man was also a shareholder.
“When you were negotiating with them, did you know who Vitals UBO was?” “Ram Tumuluri was negotiating on behalf of Vitals.”
Matthew Farrugia
“Who were the parties who were spoken to, besides the CEOs?” None, replied the witness.
“Was Vitals subject to Bank financing?” “Yes. 25% from Shareholders and 75% from bank financing.” This was a contractual clause.
“Had you looked into the UBOs of Vitals?” “No.” He was unable to recall whether Oxley Group was mentioned, but said the name sounded familiar.
Farrugia Sacco asks about the addenda to the services agreement. They were developed by the hospitals CEOs and were about the services which the concessionaire would provide. Matthew Farrugia
Filletti asks what the concession fee covered. “The running of the Gozo General Hospital and Karin Grech hospital,” Gregory replies.
The pre-agreed fee for services rendered would be paid every quarter, explains the witness. He was unable to recall whether the payments were paid in advance or billed in arrears.
“Was the concessionaire bound to spend the money on any stipulated things?” asks the lawyer. They weren't, says Gregory. “So there was no direction about how the money was spent,” suggests FIlletti.
“No. It was paid to provide the hospitals service.” Matthew Farrugia
Lawyer Stefano Filletti asks how they came to be involved and what they did. RSM had assisted Ganado Advocates, he says.
Besides assisting with the RFP they had helped the Steering Committee. He clarifies that Beat and RSM acted as consultants to the steering committee.
Filletti asks when the adjudication of the RFP took place. Around July, Gregory replies. This was followed by the negotiating stage, he said.
In that stage, the lawyers would draw up draft contracts and the committee would go through the agreements paragraph by paragraph with the concessionaire at the time - Vitals Global Healthcare, he says, before a final draft was eventually agreed upon.
“Can you briefly explain how VItals would be paid and for what?” asks Filletti. Matthew Farrugia
The department would provide the description for the payment, but that was not something the Treasury would concern itself with. “As I explained last time, the Treasury is simply an intermediary in these payments.” Matthew Farrugia
Magistrate asks about the experts who are appointed despite not being on the list. There was no procedure for them, replies the witness. The lawyer suggests that these expert witnesses are therefore free to set their own rate.
The witness is unable to answer.
“What a racket!” laughs De Marco. “Incredible!”
Matthew Farrugia
Magistrate asks if there is a policy for applicants who have a criminal record. That is not their competence, but the court’s, replies the witness. She explains that there had been no vetting process in the past, but recently this has started to happen. The magistrate or judge had the power to freely appoint people who were not on the ministry list.
“We don’t go into the appointment decision. As CSA we just try to facilitate it.”
Filletti says the payments come from CSA but the budget is under the ministry. Asks whether the ministry was aware of the rates for the experts in the Vitals inquiry. “I wouldn’t know. It is not one of the department’s functions.”
The lawyer continues to press her, asking whether her department had made further checks when faced with an €11 million bill for experts who are not on the list. “As a department, we could not do this.”
There was no “fit and proper test” carried out, confirms the witness.
Magistrate asks what the role of the audit firm mentioned earlier was. It carries out the necessary checks and verifications and then reports to the CSA, replies the witness. Matthew Farrugia
Persons interested are to submit a due diligence form and a recent police conduct as well as any applicable qualifications.
Debono asks who examines the applications. The department had appointed an auditor MRC Audit Ltd, to do so, replies the witness.
He asks whether the audit firm gauged the applicant has the required level of expertise. “How does a person end up on the approved list. Who tests them?”
The warrant is taken as evidence of the expert’s knowledge and the magistrate or judge appointing them has discretion to appoint a person as an expert. Matthew Farrugia
Debono “I know Ms. Fiorini and happen to know the deputy director too,” Debono says with a chuckle. The deputy director is Debono’s long term partner, Vanessa Grech. Matthew Farrugia
Asked by lawyer Joseph Mizzi about defendant lawyer Deborah Chappell, the witness says that Chappell had previously worked for DF Advocates before joining Vitals as in-house counsel. Both Delecia and Chappell worked for Tumuluri, she said. Matthew Farrugia
The court would eventually have to decide whether there was sufficient prima facie evidence to merit trial on indictment, so the court was listening to the evidence in order to sift through it.
Debono tells the court that the recent acquittal of Alec Baldwin in the US was about the rule of disclosure. Ali Sadr was also acquitted abroad over lack of disclosure. “Here, we mention the rule of disclosure and it’s like we’re talking about outer space.” Matthew Farrugia
There was a two-pronged constitutional issue that was “looming large” over this case, Debono said: legal privilege and a suspect’s right to legal assistance.
“But with all due respect to the prosecution there is nothing to interpret- this is a company which is a suspect, it is clear.”
Matthew Farrugia
In truth, there is no need to interpret search warrants, Refalo tells the court. “But this court must recognise that its function is only to compile evidence. If it were to uphold the defence’s request it would be acting beyond the scope of its legal powers. If anything, this is an issue that should be raised at a later stage, not now. It can never be upheld.”
Matthew Farrugia
Frendo is called back to the stand and asked to read out the search warrants, which he does.
The court points out to him that the articles of the law specified in the warrant include offences related to bribery and trading in influence.
“When I carried out the search there, they weren’t suspects at that point. They had information which could be useful to an investigation.” the witness insists.
Debono asks the witness to confirm that the wording of the warrant didn’t imply to him that the subjects of the search were suspects. The question is prohibited as it is a direct question.
As defence lawyer for DF Advocates, Kevin Deguara, Debono says he has no further questions and proceeds to dictate a request that all evidence seized as a result of the search warrants must be expunged “as they are a result of a breach, a very clear breach of the criminal law.”
“I have been working in court for 24 years and with all due respect a search means you’re a suspect. That triggers the right to legal assistance and other rights,” argues the lawyer, insisting that the wording of the search warrant clearly implied that the subjects were also suspects.
Lawyer Michael Sciriha describes lawyer-client privilege as “like the seal of Confession” and was a protection not only for the lawyer, but also for the client. Matthew Farrugia
The Court cuts Debono short. “We are not going to keep going around in circles. If these are not the answers you are looking for, we cannot influence the witness in his testimony.” Debono protests that the witness was “contradicting a court document.”
He submits that it is “very serious that the warrant is clearly about a suspicion of a crime and as soon as it became a suspect it had to be given the rights of a suspect, which were not given and so I will be requesting the expunging of the evidence.”
Everything seized had been seized illegally, argues Debono. Matthew Farrugia
Magistrate: He has already said twice that there was no suspect at the time. Do you want me to tell him how to testify? Debono raises his voice and protests at the court, saying that the court must direct the witness to tell the truth. Magistrate Caruana: “One, don’t shout at me. Two, stop arguing with the court” Debono continues to protest, but in a more subdued manner. Matthew Farrugia
The lawyer asks Frendo whether his officers had seized items from Jean Carl Farrugia’s desk. The witness confirms, as the office was open and adds that Kevin Deguara had been present for the search. Matthew Farrugia
The magistrate interrupts Debono after he begins arguing with the witness. Matthew Farrugia
“As far as I was concerned, they were found in the offices of DF Consultancy Services Ltd and the warrant specified that we were to seize every document from there, not to ascertain which company it belonged to.” Matthew Farrugia
The Magistrate points out to the lawyer that he had essentially been asking the same question for the past 30 minutes. Debono replies by telling the court that as soon as Frendo leaves the witness stand, he will be asking that all the evidence mentioned by the witness be expunged from the proceedings. Matthew Farrugia
Its letterhead reads “DF Advocates,” points out the lawyer.
The witness replies that the filename matched one of the keywords. “It has DF Advocates, Deguara Farrugia, written on it. It also mentions Shapoorji Malta Ltd, which is one of the keywords I was ordered to seize.”
He insists that the instructions from the magistrate were that if the police found any document featuring one of the keywords of the list, it was to be seized. Matthew Farrugia
"Did you distinguish between DF Advocates and DF Consultancy Services Ltd?" Debono asks. "I didn't mention DF Advocates today," Frendo replies. "If I suggest that the files had 'DF Advocates' written on them?" Debono asks. The witness reiterates that the searches were for DF Consultancy Ltd, adding that he hadn’t seen the seizure forms to confirm what had been seized.
Prosecutor Giancarlo Refalo points out that the witness had been carrying out the orders of the inquiring magistrate and that therefore this line of questioning was superfluous. Matthew Farrugia
On the client privilege issue, Frendo replied: “The magistrate issued a warrant and the police have to carry it out.”
He confirmed that he had explained to Deguara that the police were assisting in a magisterial inquiry, at the time.
There may have been some communication with the magistrate during the search, to clarify questions about client privilege, said the witness in reply to another question. Matthew Farrugia
Frendo: it was a search warrant. If they were suspects at the time they would have been arrested. Matthew Farrugia
Witness: I had been in ECU at the time and had been assigned to carry out searches at DF Advocates offices and lawyer Jean Carl Farrugia.
Debono corrects the witness, telling him Farrugia was not mentioned in the warrant. The witness reads from the warrant which states that Farrugia’s residence was also to be searched.
Debono: but in his capacity as DF director…..You do know the distinction between juridical and physical persons right?
Farrugia had been abroad at the time, said the witness when asked whether he was spoken to.
A separate team was searching Kevin Deguara’s residence at the same time, he told the lawyer, who suggested that Deguara was not mentioned in the warrant. The witness replied that he was not briefed on the other searches.
Matthew Farrugia