John Dalli - A Corrupt EU Commissioner - Chapter 2

On the 15th November 1999 at approximately 2.00pm, Assistant Commissioner Michael Cassar, Inspector Raymond Cremona, Inspector Kevin Ellul Bonnici, Inspector Paul Caruana, PC733 Joseph Galea and PC Arthur Mercia from the fraud squad arrived at Ellul Grech’s home and demanded access to search the property without a warrant.

Ellul-Grech co-operated with the police while they conducted their four-hour search in his four-bedroom home distressing his English wife and eleven year old daughter who had just returned from school. The police seized all his computer hardware, software and anything else they could use against him as potential “evidence.”

Although the defendant was not feeling well on the day the police searched his home he accompanied them to the police depot to help with their enquiries. Assistant Police Commissioner Michael Cassar had told the defendant’s family that he would return home later that evening. He did not keep his word.

In Malta the police do not need a warrant approved by a court of law to enter a property to conduct a search. A warranted officer accompanied by lower ranking officers can do so when someone makes a formal complaint. This system is open to abuse and John Dalli and the senior police officers that conducted this fake investigation abused their power and the system.

On arrival at the police depot, helping with enquiries turned into arrest and the next 48 hours became a nightmare for the defendant and his family. Although not well, under duress and intimidated the defendant co-operated with the police. On the night of the arrest the defendant was so ill that he had to be taken to hospital at 2.00am.He was deprived of proper food and sleep and was subjected to verbal abuse during the long hours of questioning. He always protested his innocence and accused John Dalli of instigating the sending of the anonymous letters, which the police chose to ignore.

On the second day of the arrest the defendant was so unwell that a doctor was asked to visit the prisoner and provide treatment.  

In Malta a person helping the police with their enquiries and in their custody has no right to have a solicitor present during questioning. Also the police are not required to keep a written log for the time a person spends in their custody nor do they record on tape or video any interrogation they conduct. This leaves the system open to abuse.

16th November 1999 at approximately 2.00am while Ellul-Grech was under arrest, Mario Galea MP was involved in a car accident on St Ann’s Street, Floriana. Due to the seriousness of the accident the police were involved. The incident was captured on the American Embassy CCTV security camera. Allegedly, Mario Galea had a large number of these anonymous letters in his car. The
Labour Party asked for an investigation into this incident but was ignored and the accident was covered up and the evidence disappeared.

John Dalli’s off shore bank accounts had become public knowledge two days before Ellul-Grech was arrested. A copy of a bank statement from an off shore bank in Jersey together with three A4 sheets of paper making certain allegations were being distributed by post round Malta and Gozo.

The bank statement that was circulated alleged that Dalli had $US346, 129.09 deposited in this account that was not declared in his annual Ministerial declaration. These anonymous letters continued to be distributed by post during the period Ellul-Grech was in custody. 

On the 17th November 1999: Ellul-Grech was arraigned in court. The sitting lasted about two hours and a half. While he was waiting by the courtroom to be called by the usher, John Dalli entered the magistrate’s chamber where he spent a considerably long time. This is unacceptable by any standard.

Despite the lack of evidence many charges were brought against Ellul-Grech including bail and impediment on his departure. Not being able to leave Malta to work overseas made life very difficult.

The prosecution had based its case on a photocopy that was part of John Dalli’s off shore bank account. This had been found on Ellul-Grech’s desk at his home after John Dalli had given it to him previously as confirmed in Dalli’s witness on the 30th November 1999.

In his witness John Dalli confirms that there were only two people that had access to the bank statements, himself and the defendant. John Dalli could have fabricated anything he wanted to protect his involvement in the Daewoo scandal and to discredit the allegations that Ellul-Grech had made of fraud at Daewoo.
The prosecution also based its case on a few things that may or may not have been said during the long hours of questioning of the defendant. No tape recording or video was submitted as evidence to support the serious charges that were made against the defendant. Such evidence would have proven that the defendant was under duress and under the influence of strong painkillers as confirmed in the witness given by Inspector Raymond Cremona.

30th November 1999: Second court sitting in front of Magistrate Dr. Noel Cuschieri. This court sitting lasted for 3hrs approximately. Court proceedings in Malta are like being at a cattle market. All cases to be heard are exhibited on a list next to the entrance of each courtroom. In general there would be twenty to thirty cases to be heard daily by each magistrate or judge sitting on that day. Solicitors and their clients having cases heard on that day in the same courtroom gather round the left hand side of the courtroom having a casual chat hoping to have their case heard first. If a case is of any importance the small public gallery is packed with strangers and media reporters chatting away. Just outside the courtroom the corridors are packed with police, public and witnesses etc.

As the magistrate/judge enters the chamber there is a brief silence. Once seated the court decides which case is to be heard first. Cases are not heard as per list hung by the courtroom entrance. Allegedly preferential treatment is used in hearing cases.

When the cases The Police vs Joseph Ellul-Grech and John Dalli vs Joseph Ellul-Grech were announced many solicitors on the left of the courtroom left to attend to other business. The court usher, as per normal practice, went outside the courtroom shouting at the top of his voice the names of the witnesses.
Just before proceedings started Joe Gaffarena’s solicitor Dr. Keith Bonnici approached the defence solicitor Dr. Gavin Gulia and the defendant. He made an offer of Lm5, 000 (€11, 500) to the defendant to be paid by Joseph Mary Scicluna if the defendant pleaded guilty to the charges brought against him by EU Commissioner John Dalli. Why would J.M. Scicluna (at the time the sole owner of the Daewoo car sales agency in Malta) want to bribe the defendant? Was it because he wanted to gag the defendant because he was witness to the fraud that took place at Daewoo? Was it because Scicluna was involved in the sending of the anonymous letters?

Without hesitation and despite all the difficulties and hassle that was to follow, the offer was declined and Dr. Bonnici was told to stick the money up Scicluna’s back passage.

In this court-sitting inspector Assistant Commissioner Michael Cassar represented the prosecution and cross-examined Inspector Raymond Cremona. Inspector Cremona cross-examined Assistant Commissioner Michael Cassar, John Dalli and Joe Gaffarena. It is evident that there was a conflict of interest and collusion between the main witnesses. These court proceedings raise many questions about the integrity and impartiality of the courts, the police and the attorney general who allow the proceedings to be conducted in this manner.

At the end of the proceedings despite the lack of evidence the magistrate wanted to keep Ellul-Grech in custody. The defence appealed that the defendant was too ill and had many responsibilities to be kept in custody. Legal aid was refused; the defendant was released on personal bail of Lm5, 000 and an impediment on his departure together with having to sign at a police station during working hours three times a week. This made it difficult when seeking employment.

It became evident that the defence solicitor Dr. GavinGulia was performing his duty against all odds with one hand tied behind his back.

In his witness Dalli confirmed that he had had his off shore bank account before the end of 1994. He denies the balance on the statement that was circulated. However, he does not dispute the balance of $US62, 504.90 as at 30/4/85 and the balance of $US46, 129.09 as at 27/9/84. These were statements bearing the same account number. These bank statements were given to the police by the defendant and submitted as evidence.

Dalli also confirmed that this account was his account and that the statements were copies of the originals. The defendant used to receive these bank statements on John Dalli’s behalf with his consent during the years he lived in the UK.

To support their charges the police instructed John Dalli to acquire evidence from his off shore bankers to confirm that the bank statement that was being circulated was false. It is unknown what Dalli had asked or which document he had forwarded to HSBC for their opinion. The evidence he submitted was a fax from his bankers that was not authenticated. This fax could have been put together in the same expert manner that John Dalli described the bank statement that was circulated.

The fax submitted as evidence from Dalli’s bankers stated, “Further to your communication with my colleague I would like to confirm that the statement to which you refer is a publication. Now, the account numbering system as shown on the forgery was last utilised in 1987. The account numbering system as shown on the forgery was last utilised in August of 1987. A reasonable rate of interest applicable to one-day notice account in September 1994 would have been 2%. The rate of interest quoted would not have been available under any type of US Dollar account during the period in question.” It appears that Dalli’s bankers are confirming something completely different to what they were supposedly asked to confirm.

Most banks do not pay interest on a one-day notice account. Also the debit figure shown on the circulated statement is shown as deposit, not interest as quoted.

EU Commissioner John Dalli made his false accusations in revenge because Ellul Grech had reported to the Police and the Prime Minister (Dr. Eddie Fenech Adami) the gross irregularities at Daewoo Malta Ltd when Dalli had been a consultant there between 1996 and mid 1998. During that period Dalli was also Shadow Finance Minister. Dalli used his contacts and influence with BOV senior staff to arrange loans and overdraft facilities for UCA/Daewoo (Malta) Ltd., amounting to €37 million using very little collateral.

The irregularities at Universal Commerce Agency/Daewoo Malta Ltd. had been going on for a long time. This caused the company to gain a bad name and sales dwindled to 10 vehicles in 1999. The company used to sell several make of vehicles, Daewoo, Dacia, Holden, Scimitar and Rocksta. Statistical information provided by The Vehicle Licensing Office for the time the business was functioning is as follows:


1993                       87                     It is noticeable that when the dissolution of partnership between
1994                     641                    J.M. Scicluna and Joe  Gaffarena took place in September 1997
1995                  1,345                    business was in a serious decline and finding it difficult
1996                     725                    to keep its  market share.                     
1997                     376              
1998                       77
1999                       10

The 1995 registration figures are high due to sales made to clients with very low deposit.Many of these debtors defaulted on their payments becoming bad debtors.

The company was overstocked with old Daewoo Racer models while European TV stations had been advertising the latest models. There was a demand for the new models but they were not in stock. However, the old stock had to be sold first. The public did not want to buy old models and sales disappeared.

The sales figures clearly suggest that the business was insolvent when Bank of Valletta sanctioned the loans. The bankers also knew that the agency agreement had only a few months left to run. There was no written commitment from Daewoo in Korea that they had any intention of extending it. To approve these facilities the bank also asked for three years financial forecast. These were prepared by the company’s accountants and approved by John Dalli before submitting to the bank. Why did the bank sanction these facilities on the 25th September 1997? Hypothec 13460 approved the loans of LM8, 665, 988 (€19,931, 772 approximately) and overdraft facilities of  Lm7, 999, 000 (€17, 397, 770 approximately). Most of the overdraft facility had been used. E.A.

Said signed the hypothec on behalf of the bank. Being a partly nationalised institution, as a general rule, all facilities exceeding LM50, 000 (€115, 000 approximately) had to be approved by the chairman and the board of directors.