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Karl Schembri
The Lm9 million Brussels property which the Prime Minister believes will prove to be a valuable investment is increasingly turning into a political liability as more information about the dubious deal piloted by Richard Cachia Caruana continues to surface.
MaltaToday could not confirm that Cachia Caruana – the only unelected Cabinet member who goes by the unassuming title of “Ambassador Extraordinary and Plenipotentiary Permanent Representative” for Malta in Brussels – originally intended to build a penthouse residence for himself on the building, but ended up scrapping his plans after the public outcry.
Asked to confirm that information, Cachia Caruana and the government declined to comment to MaltaToday as the Brussels property controversy rages on.
The government declares it was “transparent” in its dealings but refuses to launch an inquiry, let alone answer questions sent by the media. Questions sent by MaltaToday remained unanswered.
The government has still not declared how much it will be spending on Cachia Caruana’s residence. Also, the government says it has not yet estimated the costs to install high-tech security systems, IT and telecommunications infrastructure within the building,
It is also clear that the idea of leasing out part of the building for commercial purposes came as an afterthought, while public criticism was at its highest. Gonzi is now saying that four of the nine storeys may be rented for commercial purposes, Cachia Caruana says it might be two.
Since MaltaToday broke the story - 27 June - about the government’s Lm6.5 million property purchase, new information about the deal has been snowballing amid mounting public outrage.
On 15 July, Prime Minister Lawrence Gonzi said in parliament that almost half of the Lm18.6 million additional budget for this year were to be allocated for the Brussels 9-storey building in Rue Archimede – that is Lm2.5million more than he had declared to MaltaToday.
It turned out that the property handpicked by Cachia Caruana needed Lm2.5 million for refurbishing, although everything suggests the costs will be more by the time the building is officially opened, supposedly in January 2006.
Bought from the Belgian office property company Cofinimmo, the rundown building opposite the European Commission was meant to be “totally redeveloped” by the Belgians. In its 2003 annual report, the company states that the building it had just acquired concerns “an office building that has to be entirely redeveloped” and that renovation works were foreseen to be concluded in the second quarter of 2005.
According to Super One, the Belgian company had bought the building last year for EUR5.90 million (Lm2.6 million), selling it to the Maltese government for almost three times as much its original price within a year – EUR15.5 million (Lm6.5million). Listed under projects and renovations in its 2003 annual report, Cofinimmo declared that by the end of December the property had an estimated investment value of EUR11.12 million.
Labour Deputy Leader Charles Mangion said this was “shocking news,” dismissing the deal as pure property speculation.
“On 25 June 2004, Cofinimmo has sold its building Archimede 25 in 1000 Brussels to its future occupant the Republic of Malta for EUR15.50 million with a gain,” the company states in its half-yearly report for 2004.
Only last Wednesday The Times published a damning report showing that Cachia Caruana’s choice was “by far the most expensive among the purchases made by the 10 new member states.”
Malta spent almost three times as much as Poland – the largest of the accession states – on its property, The Times revealed.
Albert Mizzi: “Ask the government”
Leading entrepreneur Albert Mizzi, was appointed as head of the negotiating front for the Brussels purchase, refuses to comment when asked whether he still believes it was a good deal, in view of the latest information.
“I just did my job. Ask the government,” Mizzi said, clearly irritated by the questions.
Last week, the Prime Minister thanked Mizzi for striking such an excellent deal on its behalf for free.
Mizzi’s committee included MIMCOL officials Ivan Falzon (who described the property as “the best choice”), Mario Mizzi and Vincent Mifsud, together with architect Martin Xuereb and Peter Caruana Galizia whose fee was capped at Lm6,000, according to Gonzi.
Caruana Galizia’s wife, Daphne, was a PR consultant on EU membership with Foreign Minister Joe Borg. In fact, the fiercest defence of the controversial government spending spree came from none other than Ms Caruana Galizia. Without declaring her husband’s interest, she expressed surprise in her Independent Thursday opinion column that the purchase was being treated “as though public money has been used to buy an asset for somebody’s personal property portfolio.”
“Malta will still own that building in four years’ time, when Alfred Sant becomes Prime Minister,” she wrote.
Sant agrees he will be Prime Minister in four years’ time but he shoots down Caruana Galizia’s other prophecy.
“The government will have sold it already because it needs money,” he told MaltaToday when contacted.
Asked whether he would sell the property if the Nationalist government would not have sold it, he reiterated that he was convinced the government will sell.
“Wait and see,” he said. “It’s going to have to sell it. Government needs money.”
“Conceived, controlled and pushed” by RCC
“It must be said that the Brussels property project was conceived, controlled and pushed by the Permanent Representative in Brussels,” former Foreign Minister John Dalli wrote in a letter to The Malta Independent on Sunday, adding more fuel to the fire. “The choice of the site, and its eventual change, were his responsibility, as were the specifications for refurbishment and the choice of experts and professionals who assisted in this exercise.”
Cachia Caruana defended his choice last week, saying that he didn’t wish to see his people walking through the streets of Brussels to get to meetings.
“Even when the sun is shining I don’t really wish to have people walking backwards and forwards or waiting for taxis between the various meetings,” he said to The Times correspondent, Ivan Camilleri, whose wife also happens to work there.
KPMG Belgium were engaged as tax advisors, who, according to the Department of Information, were paid EUR7,255 (Lm3,200).
Payments that so far remain undisclosed by Cachia Caruana include the fee for the company that made the physical evaluation of the building and fees for Belgian lawyers. SSA/XX provided the physical evaluation of the buildings and came up with the Lm2.5 million figure for restoration, while Herwig van de Welde and Olivier Toussaint were legal advisors for the government.
Also, Cachia Caruana has so far declined to answer questions as to whether government has any contractual obligations in the case of termination of his employment as Permanent Representative.
While MLP Leader Alfred Sant told MaltaToday that he expected the Prime Minister to ask the Auditor General for an inquiry into the purchase, his deputy, Charles Mangion, who is also the chairman of the Public Accounts Committee, has already declared that he will be raising the matter in Parliament after summer recess. And that in itself is an assurance that the issue will drag on, and on.
karl@newsworksltd.com
The staff list revealed by MaltaToday
MaltaToday has discovered that information which Cachia Caruana insists on keeping secret is, in fact, already public information thanks to the European Union.
When MaltaToday asked Cachia Caruana for a list of the staff he had handpicked for his embassy in Brussels last month, the Department of Information replied on his behalf: “It is regretted that in the circumstances, the amount of work involved to gather the information does not justify the request.”
The government’s excuse turned out to be a veritable lie as the names were already published by the European Union on its website (www.europa.eu.int), whose transparency credentials are much more evident than the government’s. A quick search on the Google search engine for ‘Richard Cachia Caruana’ will immediately point out the page with the list of Malta’s people in Brussels.
It includes the names of Chris Grima, who has been appointed Cachia Caruana’s deputy, and Tarcisio Zammit, who is Representative to the Political and Security Committee. Marcella Zahra is the Chef de Cabinet. The wife of PN Assistent Secretary General Angelito Sciberras, Anne Marie Sciberras, is Cachia Caruana’s attaché for the environment, while Nicolette Camilleri, the wife of the Times Brussels correspondent Ivan Camilleri (the first PBS journalist to be granted early retirement in the ongoing restructuring process) is working as attaché for transport, telecommunications and energy. Cachia Caruana says he needs about 60 individuals “to function adequately in the EU .
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