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ER Editor: In the past week, more information has come out about the Maltese government being involved in an old scheme going back to 2015 to privatize three of its hospitals with a US company called Steward Health Care, the US’ largest doctor-owned for profit hospital operator. The contract for this 30-year, multi-billion dollar project had originally been awarded to a company that appeared to have no experience in the field, Vitals Global Health (VGH), which was then transferred to Steward. The contract was annulled by a Maltese court in 2023.
This matter had historically been dealt with as a civil matter based on an audit investigation of international transfers of money via Switzerland to Maltese politicians. Now it’s being freshly dealt with at the criminal level. This targets former Maltese PM Joseph Muscat, who left office in 2020, as well as some 20 other people around him. It has also dealt a blow to Dr. Chris Fearne, a one-time health minister and now deputy PM, who was a leading contender to replace Stella Kyriakides as EU Health Commissioner. He’s been obliged to step down. European elections take place next month.
Readers who wish to dig down further may be interested in this piece from a few days ago —
Who’s who: The people and businesses facing charges linked to hospitals deal
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A reminder that a number of key EU people have stepped down for no good reason lately, or for old crimes of one sort or another resurfacing. This is our updated list; it may not be complete by any means —
Sebastian Kurz – Austria; December 2021 (with corruption investigations pending)
Kaya Kalla – Estonia; July, 2022
Jacinda Ardern – New Zealand; January 2023
Sanna Marin – Finland; April 2023
Alain Berset – Switzerland; June 2023
Walter Thurnherr – Switzerland; August 2023
Mark Rutte – Netherlands; July 2023 (others may be following him, Sigrid Kaag for example)
Nicola Sturgeon – Scotland; June 2023 (she was already out of office; is being investigated for several things)
Frans Timmermans – former EU VP / commissioner, climate portfolio; July 2023
Antonio Costa – Portuguese PM; November 2023
Leo Varadkar – Irish PM; March 2024
Sir Jeffrey Donaldson – veteran Northern Ireland politician, arrested on alleged historic sex offenses – March 2024
Charles Michel – features in a white hat tribunal report; March 2024 – where is he?
Simon Coveney – Leo Varadkar’s deputy; April 2024
Nicola Sturgeon’s husband, Peter Murrell – April 2024
Hamza Yousaf – Scottish First Minister; April 2024
Dr. Chris Fearne – deputy Maltese PM; May 2024
A reminder that the EU corruption probe nicknamed Qatargate has been simmering away for quite some time. The investigation into von der Leyen’s Pfizer vaccine deals has produced nothing in the public eye so far.
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What is behind the Malta hospital scandal that has led to charges against former PM Joseph Muscat?
A former prime minister has become the first in Malta to have criminal charges brought against him over a corruption scandal.
LAUREN CHADWICK for EURONEWS
Former Maltese prime minister Joseph Muscat is among several former and current officials on the Mediterranean island facing criminal charges in a corruption scandal over a scheme to sell public hospitals to a private company.
The charges, which mainly relate to money laundering, were brought by prosecutors on Monday but the hospital deal itself dates back to 2015 and has been the subject of multiple civil court rulings, audits, and investigative reports.
Muscat has denied wrongdoing, writing in a Facebook post that if the charges were not so serious, they would be “laughable”.
Experts said this was the first time that criminal charges have been brought against a former prime minister in Malta.
While the full investigation report that resulted in these charges is not yet public, here’s a look at the background of the scandal.
Hospital contract awarded to a company ‘without health sector experience’
Following a call for competitive proposals, Malta’s government signed an agreement with a private company called Vitals Global Healthcare (VGH) Ltd in 2015 to redevelop and operate three public hospitals.
The process for awarding that contract was later called into question.
Malta’s National Audit Office said in 2020 that the government’s work to verify the deal with VGH and its capacity to run three public hospitals was “grossly inadequate”.
Of particular concern was that VGH was not known to “have experience in the health sector,” Maltese unions said in a letter calling for the audit.
Indeed, auditors confirmed that VGH did not provide sufficient evidence that it had healthcare management experience, and yet it was picked by the government for a 30-year, multi-billion-euro contract to manage the public hospitals.
The contract was transferred in 2018 to a company named Steward Health Care which runs more than 30 hospitals in the US and appears to have created an international office that year.
Deal annulled by court due to fraud
A Maltese civil court annulled the deal in February 2023 after an opposition politician filed a case against it.
The court said the Maltese government had signed a Memorandum of Understanding in 2014 with a group of investors who later formed VGH with the idea that it would take over the hospitals.
There were also concerns about the transfer of the contract to Steward.
In 2021, the Times of Malta newspaper reported that Muscat had been wired money from the Swiss firm Accutor, which had received millions from Steward during the hospital takeover. VGH investors were also paid by the Swiss firm, according to the newspaper’s reporting.
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The National Audit Office said in May 2023 that conflicting accounts and a lack of records of initial interactions between the government and Steward Health Care were concerning and “obscured visibility” of the deal.
‘Collusion’ between government and companies
The judge that ruled to cancel the hospital contracts in February 2023 found that fraud had been committed before VGH was awarded the contract, after it got the contract, and when Steward assumed VGH’s contractual obligations, according to court documents.
While Steward appealed the February decision, an appeals ruling confirmed the contract’s annulment in October 2023. The judges said, however, that instead of fraud by one party, there was collusion between the government and the companies.
Judges wrote in the appeals ruling that those who were supposed to protect the interests of the country failed to do so. These cases, however, were in civil court and did not result in charges.
The criminal charges this week came following an investigation sought by the rule of law organisation Repubblika.
The Dallas-based company Steward Health Care, the US’ largest physician-owned for-profit hospital operator, filed for bankruptcy in Texas on Monday. The company said in court documents seen by Euronews that it initiated a process to sell its US hospital facilities in late January.
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“This is the first time in Maltese political history that a former prime minister was able to answer for such criminal charges,” Kurt Borg, a lecturer in public policy at the University of Malta, told Euronews.
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‘Attacks on judiciary’
Malta’s current prime minister, Robert Abela also came under criticism this week for his response to the scandal as he has stood by Muscat and called into question the judiciary.
In a statement, the rule of law organisation Repubblika said it was deeply concerned by Abela and other officials’ responses, saying there was an “attack” on public officials in the judiciary, police, and prosecution service.
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CONTINUE READING HERE
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