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2 News maltatoday, WEDNESDAY, 15 JANUARY 2014 'I was acting on Rizzo's recommendation' – Gonzi CONTINUED FROM PAGE 1 Farrugia had been under arrest at the police lock-up for just over 24 hours, when in the evening of Thursday, 31 January 2013 – in the thick of last year's general elections – Gonzi was reacting to MaltaToday reports on the Enemalta bribes and declared that he would consider a pardon in return for information on the scandal. Farrugia had then been under arrest for just 24 hours, after having been called for questioning for the first time on Wednesday, 30 January – three days after MaltaToday connected him to the bribery of Frank Sammut, and ten days after this newspaper first broke the story of the Trafigura bribes. Refusing legal assistance, Farrugia opted to spend the maximum 48 hours under arrest, and crucially availed himself of the right to stay silent during his interrogation by senior police officers. Then on Friday 1 February, some time between 9:30am and 10am, Assistant Commissioner Michael Cassar first informed Farrugia that Gonzi had offered a presidential pardon to anyone who had any evidence on the oil scandal. Farrugia's silence served as a pretext to be granted a presidential pardon a week after being released from arrest. Upon being released, ac- companied by his lawyer Siegfried Borg Cole, the oil trader sought the advice of criminal lawyer Franco Debono's office, who took on Farrugia's case. Seven days later, on Friday 8 February, Law- rence Gonzi convened an urgent Cabinet meeting late in the evening as soon as he landed in Malta from Brussels. At around 10pm, Gonzi addressed journalists gathered on the steps of Castille to announce that the John Rizzo Central Bank deputy governor was Labour consultant on energy tariffs report A Central Bank employee who in the past was accused of being disloyal to former governor Michael C. Bonello, has been appointed deputy governor. The Prime Minister yesterday appointed Sandro Demarco as deputy governor of the Central Bank. Demarco had carried out a review of a report prepard by the Laboru party in 2008 on the impact of higher energy tariffs. The five-year appointment is backdated to 1 January, 2014. As second deputy governoer, Demarco is expected to focus on financial stability. The appointment was announced in a circular to Central Bank employees. This is the first time that the Central Bank of Malta has two deputy governors, the other being Alfred Demarco. Demarco had been at the centre of controversy when former CBM governor Michael Bonello had filed a counter protest in the Maltese courts rebutting allegations made by Demarco. Demarco was the subject of an internal bank investigation which however had ex- onerated him of claims that he had leaked information to the Labour Party. Demarco said the outcome of the investigation had been kept secret and he requested publication of the report. In a counter-protest, Bonello said the bank had instituted two internal proceedings against Demarco after the latter carried out a review of a report prepared by the Labour Party involving the impact of the increase in energy tariffs. The report was published by the PL in November 2008. Bonello claimed that Demarco had contravened the bank's internal rules governing confidentiality and its code of ethics. However, internal proceedings on a possible violation of the bank's anti-fraud policy and a disciplinary board hearing, concluded that Demarco was not guilty in not seeing the CBM's clearance beforehand. The disciplinary board however said Demarco should have exercised more caution and prudence before accepting to review a report on a matter which had all the ingredients for a public controversy. Cabinet had agreed on the conditions for a presidential pardon for George Farrugia. It turns out that the presidential pardon Farrugia, suspected of having bribed senior Enemalta officials to clinch lucrative fuel contracts, was recommended without the man having offered the slightest bit of information on the case before a Cabinet decision to grant him a conditional pardon. Appearing before the Public Accounts Committee scrutinising the Auditor General's report on Enemalta's fuel procurement on Monday evening, George Farrugia said the first time he heard about the presidential pardon was while he was under arrest at the police depot. On Sunday 20 January 2013, MaltaToday published irrefutable evidence of kickbacks paid for purchases of oil for the state's energy corporation, first linking a Trafigura bribe paid into an offshore account held by Frank Sammut, who in 2003 was serving as a consultant for Enemalta. On Sunday 27 January, MaltaToday published documentation confirming George Farrugia's involvement, as the oil trader representing Trafigura and TOTSA. Three days later, on Wednesday 30 January, Farrugia was called in questioning. 10 days had elapsed since then, and during the period in between, police summoned both Frank Sammut and former Enemalta chairman Tancred Tabone for questioning. Farrugia told the PAC that Sammut and his unnamed business partner had visited him at his office when the story first broke out. Farrugia denied seeing Sammut again after that meeting. The pardoned oil trader told the PAC that when he was called in for questioning on Wednesday morning, he tried to reach his wife and his lawyer, Borg Cole, on their mobile phones but to no avail. "I then called Ronnie Agius (a trusted friend) so he informs my lawyer that I had been called in," Farrugia said. Prompted by parliamentary secretary for justice Owen Bonnici, Farrugia confirmed that he chose to spend 48 hours in the lock-up and did not ask for legal assistance. "So you went in with the intent of saying nothing, when one fine hour a police officer informed you of their offer," Bonnici told Farrugia. "Not exactly," Farrugia replied. "This [news of a presidential pardon] came out in the evening while I was in the lock-up. They informed me about it on Friday morning when I was called up to make a final statement. Michael Cassar told me what the prime minister had said. At this point I requested to call my lawyer," Farrugia said. He added that while he knew what a presidential pardon, he did not understand what it implied and he therefore needed to consult his lawyer first. Farrugia's testimony before the PAC continues this evening. mdalli@mediatoday.com.mt

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