BREAKING/Shell company Vitals to sign 30-year hospital contract identical to Malta’s in corrupt Montenegro

The press in Montenegro has reported that Vitals Global Healthcare are to sign a 30-year contract for the running of the state hospitals there which is identical to the arrangements they made with the Maltese government.

Montenegro is one of the developed world’s most corrupt states and its dealings with Malta have increased over the last two years. These dealings all involve Konrad Mizzi and Joseph Muscat. For some background, read here and also here.

Last May, Milo Djukanović, who is Prime Minister of Montenegro and who was named the Organised Crime and Corruption Reporting Project’s Man of the Year 2015, visited Malta and signed a memorandum of understanding with Konrad Mizzi and Joseph Muscat.

You can see where I’m going with this. Vitalis/Vitals Global Healthcare’s ultimate beneficial ownership is unknown, and cannot be known unless some more servers are strategically hacked, because it is sheltered by nominees in the British Virgin Islands.

It is an entirely new company that appeared out of nowhere and which has no business track record in anything at all, let alone hospital management. It has signed/is about to sign 30-year contracts to manage public hospitals only in Malta and Montenegro, both of which have corrupt prime ministers who have signed a memorandum of understanding with each other, with the involvement of Konrad Mizzi. The company, in fact, has been set up expressly for this purpose.

Vitals Global Healthcare looks to me to be nothing but a money-laundering vehicle through which the proceeds of government corruption, in Malta and possibly also Montenegro, will be ‘cleaned’ in the absence of any bank that will agree to open an account for those Panama companies because their ultimate beneficial owners are politically exposed.

The hidden shareholders of Vitals Global Healthcare in the British Virgin Islands may well be Konrad Mizzi’s Panama company Hearnville Inc, Keith Schembri’s Tillgate Inc and the ‘mysteriously owned’ Egrant Inc. Given the 30-year contract Vitals is about to sign with Montenegro, the secret shareholders could also include that country’s notoriously corrupt prime minister.

The main benefit to the shareholders is that Vitals, which has no money of its own and has so far been unable to raise finance, will make a tonne of legitimate money through being paid by the governments of Malta and Montenegro to run the state hospitals in those countries.

But the secondary benefit is that they will be able to use the company, which is going to be processing thousands of bills and invoices for the vast range of transactions involved in running large hospitals, in the same way that criminal organisations use restaurants and nightclubs to launder their illegal earnings.

The article in the Montenegro press is here. A translation follows below.

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TRANSLATION OF REPORT IN MONTENEGRO PRESS

Vitals Global Healthcare (VGH) has no experience in managing hospitals and is not registered in Malta, and two years after signing a contract with the Maltese government it has not yet begun managing Gozo General Hospital and St. Luke’s Hospital in that country.

Daphne Caruana Galizia, a well known journalist from Malta, wrote about this matter in her blog, Running Commentary. She reports that the Malta government’s agreement with Ram Tumuluri, a Canadian of Indian origin who is VGH’s executive director, and who may be associated with the Panama Papers affair, was fixed in advance, months before the public tender.

She wrote that a due diligence report, prepared by a business intelligence firm for its client which had been asked to cooperate with VGH, concluded that there is “a risk of reputational damage” for its client in doing so.

The blog says that this suspicious deal leaves the Maltese government open to the possibility of investigation for corruption.

Last week, Vitals Global Healthcare gave a presentation in Montenegro, announcing that it is interested in investing in public health and hospital management here. Health minister Budimir Šegrt was there with the Minister of Sustainable Development and Tourism, Branimir Gvozdenović.

VGH has made a proposal to Montenegro’s Ministry of Health, for managing Montenegro’s state hospitals under a 30-year contract. The project is worth €375 million.

Ram Tumuluri said that in three to four years they will transform Montenegro’s healthcare institutions with their partners, in three phases.

The first phase, which is expected to begin next year, includes new medical equipment and staff training. In the second phase, new health centres will be built in Budva and Tivat, a new regional hospital in Kotor and the general hospital in Herceg Novi, as well as a new clinical centre.

The third phase will include the construction of new health centres, a general hospital for orthopedics and special emergency assistance for clients of ski resorts in the north of the country.

The Montenegrin government will provide the land, assistance in obtaining licences, and decide the healthcare budget which Vitals Global Healthcare will manage.

The Maltese journalist has pointed out in her blog that Tumuluri, who is the main spokesman for VGH, is in fact just a front for the group that was exposed in the Panama Papers affair.

She quotes the business intelligence company’s due diligence report, which says that in the two years since Vitals Global Healthcare signed its contract with the Malta government, it has failed to secure finance and has apparently done nothing but suck money from the partners.

The news that VGH will manage hospitals in Montenegro for 30 years has not been received favourably by the medical profession, saying that no public health system in the European Union is operated by a private company.

Zarko Borovic, who heads the Plastic Surgery Centre in Montenegro, told the Center for Investigative Reporting Montenegro (CIN CG) that he is not familiar with the details of VGH’s presentation, but he cannot understand why a private company will manage the public health system, which is of the greatest social importance, and which despite turning over vast amounts of money, does not function on the profit principle but on that of solidarity.

“I’m not aware that any country in the world has given a concession to a private company for the management of public health,” he said. He says that VGH’s presentation may be kite-flying to see how the public reacts to the “privatisation” of state hospitals.

“Even if VGH were the best private company, no one has explained what their interest is in investing in our health care system and what they were promised, because the motives certainly do not square up in being granted a concession to manage millions of euros, which amounts to billions over the 30-year period.”

Adis Balota, director of the health insurance fund, said there has been no detailed analysis, which indicates a lack of transparency. “But these concessions are granted within the state’s primary health care system, as part of the basic package of health services”. Balota claims that the VGH’s plans demonstrate a completely different concept of development and that they are at odds with official policy.

“We can talk about private-public partnership for a particular service, like medical tourism or plastic surgery, but the basic package of healthcare services should be guaranteed by the state, not by private corporations,” he said. “What is the point of having a Ministry of Health and the Public Health Institute, if a private corporation is to manage the hospitals?”

The health insurance fund would then became nothing but an office that receives the invoices and pays them, he said. Balota emphasised that the key problems in the public health system are not about capacity, which is what VGH based its presentations on, but equipment, staff and better conditions for doctors.

Caruana Galizia writes that Konrad Mizzi was appointed Minister for Health in Malta after his predecessor, Godfrey Farrugia, was summarily removed from office, and that the project for the Maltese government’s partnership with Vitals Global Healthcare was started and concluded under his watch.

At the end of September, the Times of Malta announced that Minister Mizzi will be among the first high-ranking officials from EU member states who will be called to appear before the European Parliament’s Panama Papers Committee, for his involvement in the Panama scandal.

Although the list of those European politicians who will be called for interview is not complete, Werner Langen, a German member of the European Parliament, said that it is certain Konrad Mizzi will be called before the Panama Papers Committee, which is presided over by the parliament’s committee on money-laundering and other non-transparent operations.

Joseph Muscat and Konrad Mizzi in Montenegro