Culture Minister José Herrera said that despite having his concerns about then minister Konrad Mizzi whose name cropped up in the Panama Papers leak, he had supported Mizzi in parliament due to lack of a free vote for the MPs.
Herrera was testifying in the public inquiry into the murder of journalist Daphne Caruana Galizia on Wednesday.
Managing editor of MaltaToday Saviour Balzan also took the witness stand while Electrogas shareholder Paul Apap Bologna would be testifying in another sitting.
Balzan who revealed of having testified in two different sessions in the inquiry behind closed doors, was summoned after the call logs of a call between disgraced then OPM Chief of Staff Keith Schembri and himself were exhibited in court.
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The next sitting is on Friday at 9.30am.
Balzan concludes his testimony by saying that journalists nowadays refrain from writing certain stories fearing for their lives.
He said that one of the points in the Media and Defamation Act provides for mediation in the first instance before suing.
"This is not being applied. I've written to then Chief Justice and IGM about this," he said.
Balzan says that the revision of the law regulating the media, saw lawyers from MaltaToday and the Times of Malta working together on a framework.
Most of SLAPP threats received by MaltaToday were related to stories concerning people who had bought Maltese citizenship.
He remarked that the editor in LuxLeaks ended up serving time in jail.
Asked about strategic lawsuit against public participation (SLAPP), Balzan says that many prominent financial institutions would sue.
"There is no political will to address the situation of the media," he says.
The witness says that their media house is the only one who does not receive covid-19 wage supplement.
Balzan says media needs more collegiately between journalists.
"Intrinsically every government is not transparent. In other countries, it is in the public domain that there is a criminal investigation about a person. In Malta, it isn't," he adds.
"Obstacles are found with every government. Speaking about the present administration, I don't think there are people who would be prepared to do such things," Balzan explains.
"Those who ordered the assassinations are still out there. There are rumors that there are three bombs – one used in the case of bomb, one was used on Caruana Galizia and a third one has not been used," he tells the court.
"Independent media is working together to publish certain stories altogether at the same time," Balzan begins to explain.
Judge Mallia asks about the treatment of journalists.
Chief Justice Emeritus says that Balzan was called to testify after the log was presented as part of the acts of this public inquiry.
"I swear on my children that this is all a fairytale," Balzan recalled Muscat telling him over the phone, adding that Muscat was an eloquent man.
Balzan says that from the circumstantial evidence available to date, Caruana Galizia caught Egrant when it was being closed off and that she was right in saying what she had on the purpose of Egrant when one looks at the way other projects had been used.
"From ten stories, three would be brilliant while the rest she could not prove," he adds.
"PM called me to try and convince me about Egrant," Balzan said. He remarks that everyone does this.
Balzan said there are among 40 calls by his paper for Mizzi and Schembri to resign, remarking that Caruana Galizia tried depicting him as though he was trying to defend the government.
When Schembri then called Balzan, the prime minister spoke to him.
The managing editor explains that when Schembri had called him he could not hear him because he was on a boat crossing from an island in France.
Balzan says that while it might sound as conspiracy, he believes that it was the security services that provided her with the logs.
"At the time I had checked and decided to call her bluff. I had denied to call happened. What was wrong in having a call with a chief of staff. I've spoken to various prime ministers and chief of staff in my career," he says.
Balzan says that they had a very bad relationship and would refuse to use her name.
Balzan says that at he feels a bit disturbed and offended at being asked this question. He adds that now he must reveal that I came here twice and gave testimony.
Judge Mallia asks about the call between Saviour Balzan and Keith Schembri in 2017.
Managing Editor of MaltaToday Saviour Balzan takes the witness stand.
Herrera leaves the witness stand.
Muscat had resigned as prime minister telling his fellow MPs that it was due to the arrest of his chief of staff, the arrest of a businessman involved in a prominent business, as well as other situations at the time, he replies to a question by the Chief Justice Emeritus.
"It is very wise to change it, in principle every party should have autonomy from influence," he replies.
Dr Azzopardi asks about state financing of political parties and whether he agrees to it.
Herrera says that they were not given any explanation.
Azzopardi refers to the witness' list drawn up by suspected hitman Vince Muscat (il-Kohhu) ahead of the pending trial on which he listed Joseph Muscat, Keith Schembri and Owen Bonnici.
Herrera: To be honest, I hadn't delved into it.
Azzopardi: Have you ever asked what was Schembri doing at Muscat's house on the eve of the former's arrest?
Herrera: We're treading on a tightrope. I can't delve in what was discussed in cabinet.
Azzopardi: Did the commissioner inform the members of cabinet about the allegations about corruption made by Yorgen Fenech while he was being interrogated?
The Police Commissioner and Police Inspector Keith Arnaud were present for the cabinet meeting. At some point, the AG also joined the meeting.
Herrera says that he did not receive any WhatsApp messages from Keith Schembri while that particular cabinet meeting was underway. He does not know about others.
"Usually when a prime minister walks out, the deputy prime minister would preside over the meeting. Am not sure whether Chris Fearne was already deputy prime minister at the time. But I'd assume that Fearne chaired the meeting," he replies.
Dr Azzopardi asks about the cabinet meeting on 28 November.
Theuma's request for presidential pardon never featured on cabinet's agenda.
Herrera says that Theuma's request was never discussed within cabinet. This was a decision taken by Muscat alone.
Dr Azzopardi asks about Melvin Theuma's request for presidential pardon and what was the difference from Fenech's request.
Herrera says that he got to know about the snap election on the day it was announced.
Herrera confirms that he would rather not have anything to do with such companies.
"Is it the case that after 2016, you decided to keep away from the firm after the Panama Papers emerged?" Dr Azzopardi asks.
"I didn't know the individuals managing Nexia BT. I had auditors there. When I was a parliamentary secretary at the Economy Ministry there was another auditing firm which I trusted. I met with most of the stakeholders when I was responsible for financial services."
Dr Azzopardi asks about direct orders awarded to Nexia BT and whether there was a reason for this. He notes that the ministry headed by Herrera was on the lower end of the spectrum when looking at direct orders.
"On Muscat, I'll say a few things. He earned respect and managed to reorganize the party. In the end, however, he made certain mistakes and for which he had to pay a political price. I acknowledge his strengths. Not having fired Konrad Mizzi and Keith Schembri when he had to do so turned out to be the biggest mistake for which he had to shoulder responsibility," Herrera says.
"Certain things did not remain merely conjectures but became evidence which could lead to conviction," he explains.
Herrera says that the backstory had changed and there was scope for punishment.
Dr Azzopardi asks what had changed from May 2017 to June 2020 when Mizzi first enjoyed a confidence vote and later was voted out by his own party.
"To be honest with you, I don't think it ever featured on the cabinet's agenda. But I don't remember," he replies.
The first question relates to the setting up of the makeshift memorial. Dr Azzopardi asks whether the clearing of the memorial was discussed among the government MPs.
Dr Azzopardi questions the witness.
Herrera says that he will not delve in what was said in the cabinet meeting.
Dr Comodini Cachia asks whether the decision was done after what he had said in the six-hour cabinet meeting.
"There was a certain tension and insecurity in the country. One did not know how the situation would evolve," he said.
He says that he was a public person at the time and wanted to avoid unnecessary accidents.
Herrera is asked whether he employed private security because he was a cabinet member.
Herrera says he did not see these reports. He adds that he has trust that the institutions work independently.
"As far as possible a politician should be at an arm's length from the institutions," he maintains.
Dr Comodini Cachia asks Herrera whether he asked for the resignation of those involved or whether he asked for a discussion at cabinet level following the FIAU report on Mizzi and Schembri.
He explains that if individuals were involved in wrongdoing or in serious allegations, then yes they betrayed the prime minister's trust.
"I've heard that the prime minister had been betrayed many times. And whoever said it, was right," Herrera says.
He says that then-prime minister felt he should shoulder responsibility and subsequently resigned.
Herrera says that about high profile officials who are being investigated, he only got to know from the public domain and had no inside knowledge. This also includes what he knows about Fenech.
Herrera says that not everyone who is involved in a project would be guilty of wrongdoing.
He says that allegations worried him.
Chief Justice Emeritus refers to Herrera comments that the harmony was broken following the Panama Papers reveal.
"I became aware of Yorgen Fenech's involvement in the murder when he was arrested. Or perhaps a few days before when there were strong rumors about his involvement. Before that there were rumors about other people's involvement. It does not mean that a rumor is not true but there was no substantial evidence," he tells the court.
"Who was behind the investment or who were the potential bidders were not disclosed during that presentation," he says.
"The presentation seemed to have been prepared by technical experts due to the details it delved in. We had no clue who prepared it," Herrera says.
Dr Comodini Cachia asks about the presentation pre-2013 election on the power station.
"Keith Schembri was not present when Yorgen Fenech's request for presidential pardon because he was elsewhere," Herrera says, adding that Muscat too had left the meeting during the discussion.
Herrera says that these subjects were obviously discussed in cabinet.
Herrera who is reluctant to confirm says that he already said that Mizzi who was a minister at the time would be present for cabinet meetings and Schembri too.
Dr Comodini Cachia asks Herrera to confirm whether Schembri and Mizzi were present for cabinet meetings during which the FIAU reports and the Panama Papers were discussed.
Asked whether he confronted Mizzi following the reveal or FIAU reports, Herrera says that he did not have a particular social relationship with him.
Herrera explains that he did not know Konrad Mizzi and only got to him during the campaign since he was a newcomer to politics.
Hon. Herrera explains that the communications coordinator are overwhelmed with work and that more coordination was needed with central government.
He reiterates that the system has been scrapped however it was an efficient system.
He clarifies that spokespersons would only coordinate with Farrugia but their direct superior was the minister.
By seniority, Kurt Farrugia was responsible for the government spokespersons, Herrera says.
The system is no longer in use and that now he has someone he trusts.
Asked about OPM appointments of ministers' spokespersons, Herrera explains that while on paper it seemed "sinister and suspicious", it was aimed at having better coordination. He remarks that he had suggested his OPM appointment.
Herrera says that he did not consider himself as Muscat's confidant, explaining that he did not have a personal and intimate relationship with him.
"Joseph Muscat used to preside cabinet in a very cordial manner. Allowing each member to express their opinion. He was also open to change his opinion if convinced. He always showed courtesy towards me," Herrera says.
Pressed further, Herrera says that he felt that Muscat trusted his chief of staff a lot.
"Since Konrad was heading an entity entrusted with major projects and a vast portfolio, I understand that Muscat trusted him too. I don't know about others," Herrera says.
Herrera says that he never used the term kitchen cabinet.
Dr Comodini Cachia asks about the issue of kitchen cabinet. She refers him to his reply and asks about the rest of Muscat's confidantes.
Dr Comodini Cachia takes over questioning.
Herrera speaks about those who attend cabinet meetings apart from members, he mentions Robert Abela and Louis Grech attending as advisors at the time.
"My reaction was one of disgust. It is unacceptable. In my opinion it was one of the worst things which was experienced by our country. Honestly I was sorry. Same feelings was expressed by the colleagues I spoke to," he says.
Herrera says that at the time of the bombing he was with his secretary at the ministry.
Chief Justice Emeritus asks about the cabinet's reaction to Daphne Caruana Galizia's assassination.
"I wanted to be proactive active and avoid unnecessary incidents," he adds.
Herrera explains that it was not due to a lack of trust in the police force but since he did not suffer from any direct threat.
"There was a certain climate and I felt I needed to be pro-active and did not know how the situation would unfold. There was no direct threat against me. It was a precaution," Herrera says.
Chief Justice Emeritus asks about Herrera's direct order to employ private security.
Herrera says that he did not know Schembri from before through the party.
"Am a politician who is close to his constituents. I wasn't elected through the party's structures," Herrera tells the court.
"I was never close to him."
Herrera got to know Schembri in the 2013 election campaign.
"One needs to ask the former prime minister about Schembri's powers," he adds.
"The powers of a chief of staff or private secretary are given by the person who gives him trust," Herrera says.
"I wasn't close to Keith Schembri," Herrera says reminding that the post is not provided for in the constitution.
Herrera says that it only emerged later and that he got to know from the public domain about Schembri being a business associate of Fenech.
He says that he goes to OPM once a week for cabinet meetings and meetings with the prime minister.
He says he did not recall seeing Fenech at Castille adding that he could been anywhere in the building.
Herrera says that what he knew more about Fenech was from the public domain.
Herrera: I don't know Yorgen Fenech and I only met him at an opening of a gaming related initiative when I was responsible for iGaming.
Chief Justice Emeritus: The chief of staff reflects on the whole government. How could one insist that his chief of staff stays?
On Panama Papers there was an uproar which led Muscat to seek our advice one-by-one.
Herrera: When 17 Black's owner was revealed, that was the beginning of a rollercoaster.
Chief Justice Emeritus: Everywhere else in the world the Panama Paper caused an earthquake bar Malta. Then there was 17 Black…
Herrera says that he got his information from the public domain.
Herrera says that following the arrests of certain people, the cabinet reacted following a build up.
Chief Justice Emeritus remarks that Herrera was among the most vociferous cabinet members last year when Malta plunged into a political crisis.
"You either vote with government or you resign. But if I resigned, I would have lost my voice," Herrera added.
He remarks that MPs are subject to the whip's orders and the vote was not at a free vote. Herrera says that despite his concerns about Mizzi, he chose to remain as minister.
Herrera explains that Malta inherited parliamentary system based on the British one.
Judge Lofaro asks about the confidence vote in Mizzi and how this tallied up with his concerns about the minister.
Comparing the situation to a hypothetical situation in court, Herrera says that it was the prerogative of the prime minister. He adds that criticism was done in the public domain.
Judge Lofaro steps in saying that Minister Mizzi was only stripped off his portfolio but retained his seat following the reveal.
Herrera: Some inquiries took longer than they should have. I believe that certain inquiries should be concluded. I can understand shortage of resources.
Judge Mallia: And you've also worked in the criminal field as a lawyer.
Judge Mallia: Did four years have to pass to take concrete action following the Panama Papers?
Herrera continues that he is not here to defend anyone.
He maintains that whatever the NAO says should be given due importance.
Herrera says that "on paper at least" he has trust in Malta's homegrown institutions albeit they are not perfect.
He says that the scheme generated substantial wealth and does not think it is wise to scrap it.
"It does not mean that a controversial project is a priori wrong. What is usually wrong is its implementation," he adds.
Herrera recalls the setting up of offshore companies in Malta and which was controversial at the time.
He remarks that manufacturing potential of Malta had been potentially reduced.
On the golden passport scheme, Herrera says that in the electoral manifesto there was a promise to make an effort to increase financial investments in Malta.
He had reservations from an environmental aspect and sought to include land in the natural park in the area to compensate.
Herrera says that AUM was another controversial project. He comments that at the time the project was controversial due to its environmental impact. He remarks that at the time he did not have the information which later emerged in the public domain.
Asked about the American University of Malta, Herrera says that as far as he could recall the AUM was not part of the electoral manifesto but the government was not limited by the manifesto.
"I had told him that the minister in question and his chief of staff should resign," Herrera tells the board following a question by Judge Lofaro who asked about his advice to Muscat.
Muscat had sought the advice of each of his cabinet members in one-to-one meetings following the Panama Papers leak.
Herrera says that he got to know about Schembri's and Mizzi's involvement in the Panama Papers through the media.
Asked about the FIAU reports, Herrera says that as he has just said there was no longer the harmony which was enjoyed previously by cabinet.
Herrera maintains that if there were individuals in mal fede before quickly adding that he is not saying that there is, they have to answer for their actions.
"Fil-bidu tal-legislatura kien hemm iktar armonija fil-kabinet," Herrera tells the board.
"Cabinet had a memo before it, one assumes that it is in good faith. Then responsibility has to be taken by those who have to shoulder it," he tells the board.
Herrera says that he could not remember that there was a memorandum of understanding.
'No, as cabinet we did not scrutinize the preferred bidders," Herrera replies, adding that he was not involved.
Did cabinet scrutinize the preferred bidder, Judge Mallia asks.
A document with the way forward was presented to cabinet and a presentation was given by Konrad Minister as Health Minister.
Herrera says that another PL electoral pledge was to heavily invest in the state hospitals which were under utilized, he said mentioning St Luke's, Karin Grech and Gozo General Hospital.
Now questioning turns onto VGH.
Herrera confirms that after the presentation, a call for public interest was issued within a few weeks.
Herrera once again reiterates that cabinet meetings are secret and it would be unethical for him to reveal or delve into detail.
Herrera is asked whether the project was presented to the cabinet as a fait accompli.
"There was a clear indication that the way forward for the energy sector had to be privatised," he says.
Herrera recalls Mizzi telling them that there were various experts behind the preparation of the presentation.
"At one point in time, a then newly confirmed PL candidate presented the project. That candidate was Konrad Mizzi," Herrera says.
In reply to a question by Chief Justice Emeritus, Herrera says that the transition to a gas-fired power station was an electoral promise and this was one of the priorities.
As far as Hererra could remember, he could not recall that the defaulting of Electrogas was discussed at Cabinet.
Herrera says that the Finance Minister would have his own concerns because he is responsible for administering the country's finances.
Herrera adds that what he is saying is merely confirming reports already in public domain as he cannot reveal what was discussed at cabinet level.
Asked about the issue of the bank guarantee, Herrera says that the extension was discussed in cabinet in relation to the issue that arose due to state aid.
The shareholders involved were not discussed during cabinet meetings, Herrera replied.
The bid was not analysed and discussed at a cabinet level, Herrera says, adding that as far as he recalls it did not happen.
Herrera explains that when a memo is sent to cabinet, this had to be concise. He remarked the transition to a gas-fired power station was an electoral promise.
The board asks the witness whether the Electrogas deal was presented to cabinet as a fait accompli.
Lawyer Charlon Gouder enters the courtroom.
Schembri would be present at the meetings. He was Muscat's personal confidant, Herrera says, adding that he would not know what the pair would discuss following their meetings.
He says that when dealing with certain projects which could have been controversial projects he would speak directly to the prime minister. Herrera says that he would regularly meet then prime minister Joseph Muscat.
A minister functions in three ways – there are decisions which can be taken by a minister as per law, there are documents such as policy documents or draft bills which are presented to cabinet by the minister, and there are occasions when the minister would directly speak to the prime minister, Herrera explains.
"I am convinced that the prime minister had people closer to him than others," Herrera explains.
Herrera says that the definition of "kitchen cabinet" should be sought from the fellow minister who mentioned it.
Judge Mallia refers to fellow ministers making reference to the "kitchen cabinet".
Herrera has been serving in government as parliamentary secretary or minister since 2013.
The board starts questioning the witness.
Culture Minister José Herrera takes the witness stand.
The board enters the courtroom.
Shortly after family lawyers Therese Comodini Cachia and Jason Azzopardi have entered the courtroom.
Culture Minister José Herrera has walked into the courtroom accompanied by his aides.
Good afternoon and welcome to this Newsbook.com.mt live blog. We're reporting live from Hall 22.
The Board of Inquiry is composed Judge Emeritus Michael Mallia, who is chairing the inquiry board, and two other board members, Chief Justice Emeritus Joseph Said Pullicino and Judge Abigail Lofaro.
Lawyers Jason Azzopardi, Therese Comodini Cachia and Andrew Borg Cardona are appearing for the family.