Former Maltese Prime Minister Joseph Muscat Charged in Major Corruption Scandal

Former Maltese Prime Minister Joseph Muscat has been formally charged with corruption, money laundering, fraud, and conspiracy related to a 2015 public health contract. Muscat, who served as prime minister from 2013 to 2020, pleaded not guilty to all charges during a court appearance in Valletta on May 28, 2024.

The charges stem from an inquiry into a €4 billion contract for the management of three hospitals, which was awarded to the previously unknown Vitals Global Healthcare group. The contract was later transferred to U.S.-based Steward Healthcare group, but a Maltese court nullified the deal in 2023, citing fraud.

Muscat's former chief of staff Keith Schembri and former health minister Konrad Mizzi also faced the same charges and pleaded not guilty. Former Deputy Prime Minister Chris Fearne and Central Bank Governor Edward Scicluna are set to face lesser charges, including fraud and misappropriation, at a separate hearing.

The investigation, led by rule-of-law activist group Repubblika, uncovered foul play in the handling of the hospital management contract. The inquiry's findings, which include a 1,200-page report and 78 boxes of evidence, implicated dozens of individuals and companies in what was described as a 'massive diversion' of public funds.

Why this matters: The corruption scandal involving former high-ranking officials in Malta has significant implications for the country's political framework and institutions. The outcome of the legal proceedings could lead to a shift in power dynamics and potentially impact the country's relationships with international partners.

Prosecutors have requested freezing orders of €30 million each on Muscat, Schembri, and Mizzi. Other defendants, including Brian Tonna and Karl Cini of Nexia BT, face freezing orders ranging from €11 million to €32 million.

Muscat's resignation as prime minister in January 2019 followed media revelations about his ties to businessman Yorgen Fenech, who is awaiting trial for complicity in the murder of anti-corruption journalist Daphne Caruana Galizia. Caruana Galizia had investigated the hospitals deal and was killed in a car bomb explosion in 2017.

The scandal has dominated Maltese politics ahead of the European Parliament elections. Prime Minister Robert Abela has questioned the timing of the inquiry's outcome, sparking an outcry from the opposition.

The legal proceedings' continuation will reveal its effect on Malta's political terrain. The charges against Muscat and other top officials have already led to a significant drop in popular support for the governing Labour Party.

Key Takeaways

• Former Maltese PM Joseph Muscat charged with corruption, money laundering, and fraud.
• Charges relate to a €4 billion public health contract awarded to Vitals Global Healthcare in 2015.
• Muscat, along with top officials, pleaded not guilty to all charges in a Valletta court.
• Investigation uncovered foul play, implicating dozens of individuals and companies in a "massive diversion" of public funds.
• Outcome of legal proceedings could impact Malta's political framework, institutions, and international relationships.