The role played by the financial committee evaluating proposals by companies bidding to construct Malta’s gas-fired power station was nothing more than a data inputting exercise, Brain Tonna has claimed before parliament’s Public Accounts Committee.
Tonna was testifying before the committee after the Speaker ruled earlier in the week that he must answer questions put to him and was only permitted not to do so if replying to the questions could result in him incriminating himself.
Last week, Tonna refused to answer all questions put to him, including about where he went to school, arguing that while he was not facing any proceedings related to the Electrogas project, he could not exclude this happening in the future.
At the start, Tonna’s lawyer Stephen Tonna Lowell requested that the sitting be suspended given that he planned to file Constitutional proceedings challenging the Speaker’s ruling.
The request was refused by the committee, which decided to carry on and proceed with the questioning.
Responding to questions about his professional background, Tonna said that he had set up his own firm in 1992, initially offering accounting service before eventually expanding into other areas such as auditing and financial services.
He said that he was also involved in some property development and pledged to provide the committee with a full list of companies he was involved with.
Questioning then moved on to his role in the power station selection process. He said he could not remember when he was asked to be a part of the committee, eventually settling on “a few months after the election”.
He also couldn’t remember who had asked him to be on the committee, adding, however, that he had signed a letter of engagement with then CEO Louis Giordimaina. He said that he had also spoken to David Galea, who led the selection process.
Tonna said he could not remember information he was asked about constantly throughout the course of the sitting.
He confirmed that he had sat on two committees at different stages of the process. The first, he said, was a financial committee that was tasked with evaluating the financial standing of the bidders for the power station according to a formula created by consultants DNV Kema. This process, he said, had lasted “a few days”.
Tonna clarified that it was actually Nexia BT that had been engaged, and he had selected two of his associates – Melvin Darmanin and Kersten Miller – to be on the committee given that he trusted them and knew they were competent.
“I don’t remember what happened six years ago. The reality is that we were three people on the adjudicating committee, and those were the three people,” a confrontational Tonna replied when further questions were put to him.
He insisted that all the committee had done was follow the model. “All we did was input the information from the bids submitted into the forms,” Tonna insisted. “That was our role…the results came out automatically.”
Tonna added that experts from Enemalta had helped them with regard to which information to extract from the bids. “We did not create the model either,” he stressed, to which PAC chairman Beppe Fenech Adami replied: “So you were almost not even needed if this was an inputting exercise.”
Tonna confirmed that he had no experience adjudicating projects of a similar size and nature before that point.
Fenech Adami noted that the Auditor General’s report has expressed serious reservations about the financial aspect of the process, especially the fact that verification related to corruption, bribery, fraud and other unethical conduct did not form part of the due diligence carried out.
“That wasn’t part of our remit. Why are you asking me? That’s not my fault. Is he speaking about the part I was responsible for?” Tonna responded.
Fenech Adami pointed out that ultimately he was the person appointed to lead the financial committee and that its role was to determine whether the bidders were good enough. At this point, government MP Glenn Bedingfield pointed out that the Auditor General had specified that the model used was a useful one. “You need to distinguish between the due diligence aspect and the financial evaluation,” he said.
As regards the adjudicating committee, Tonna said he could not remember any of the people involved, much to the parliamentary committee’s disbelief.
He was asked a number of questions about the committee, including whether there were any public servants involved and the number of meetings held, but insisted he could not remember any of the information being requested. He did confirm that meetings were in fact held and that he “believed” there was more than one.
Asked where the meetings were held, Tonna said it was “likely” at Enemalta in “Marsa or Delimara, probably Delimara”. The committee again asked how it was possible for him not to know where the meetings were held.
“Can’t you remember whether you used to drive to Delimara or Marsa? Presumably it’s not every day that you go to Delimara,” Nationalist MP Karol Aquilina asked.
Despite Tonna downplaying his and Nexia BT’s role in the process, Fenech Adami pointed out that it appeared that Tonna and his associates were involved in the whole process, including the third stage during which parameters were changed that had ultimately given Electrogas an advantage.
Questioning then turned to his contact with the Labour Party before 2013, which Tonna said was very little. Pressed further, he said that he would occasionally meet former OPM chief of staff Keith Schembri and former Prime Minister, then Opposition leader, Joseph Muscat at social events.
“They would ask me my opinion on different things, for example, what I thought of the chairman of the MFSA, stuff like that,” he said.
Tonna also said that at that time, people from the industry would occasionally approach him and tell him to make sure that Labour did not disrupt the financial services sector once in government.
He also said he had provided the Labour Party with some input during the process of formulating the party’s electoral manifesto.
What did you make of today’s sitting?