Former European Health Commissioner John Dalli met with his political associate Silvio Zammit immediately before Mr. Zammit first requested a €60 million ($78.3 million) payment from a tobacco-company lobbyist, said people familiar with the biggest corruption probe to hit the European Union's top ranks in years. The alleged request for money during a Feb. 10 meeting in Malta—in return for a change in tobacco legislation—sparked a probe by the European Union's antifraud office and Mr. Dalli's resignation last week.
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The antifraud office, Office de Lutte Anti-Fraude, or OLAF, has completed its probe into allegations that Mr. Zammit requested a large payment for Mr. Dalli from Swedish Match AB in order to change legislation banning the sale and export of snus, a smokeless-tobacco product, across most of the 27-nation bloc. The sale of snus is allowed in Sweden. Swedish officials have long argued that snus—a moist powdered tobacco sold in small mesh pouches packed into round containers the size of a hockey puck—is safer alternative than other forms of tobacco. The Swedish retail association estimates that ending the ban could open up a $2.3 billion market for snus manufacturers. Mr. Dalli, a former Maltese minister, isn't accused of requesting money, but the EU's antifraud office says there is "unambiguous" evidence he was aware of the payment requests and did nothing to stop them. OLAF has refused to name Mr. Zammit, but Mr. Dalli has confirmed he is the person in question Maltese judicial authorities say they are now considering the case. Mr. Dalli has said he isn't guilty of any wrongdoing and insists he was unaware of any request by Mr. Zammit for money. Mr. Zammit has also denied any wrongdoing. Reached by The Wall Street Journal on Friday, he declined to comment on any of the detailed allegations. A person familiar with the details said Mr. Dalli first denied to OLAF investigators that he had met with Mr. Zammit on Feb. 10, but later acknowledged that the meeting, which allegedly took place in his private office, took place. The former commissioner couldn't be reached. Shortly after that meeting, Mr. Zammit met with the local lobbyist Swedish Match was employing. Drawing on notes he claimed to have made during his meeting with Mr. Dalli, Mr. Zammit said the commissioner was favorable to changing the ban on snus sales but that it could cost him his political career. He said Mr. Dalli needed to be compensated for that, according to the person.. Mr. Dalli has publicly denied discussing snus issues in any meeting with Mr. Zammit in February. A document seen by The Wall Street Journal says the Maltese lobbyist told her Swedish Match handler on Feb. 6 she would meet with Messrs. Dalli and Zammit on Feb. 10. However according to the person familar with the details, Mr. Zammit told her at the last minute not to come, saying he would meet her afterward. The lobbyist couldn't be reached by phone or email. A second person with direct knowledge of the situation told the The Wall Street Journal that Mr. Zammit met in Mr. Zammit's restaurant in his hometown of Sliema on Feb. 13 with the local lobbyist and a Swedish Match employee who had flown to Malta. The person alleges Mr. Zammit laid out more details of the requested ?0 million payment that day, asking that it be paid in two parts. The first part—?0 million—would come after a meeting between Mr. Dalli and a Swedish Match official that could take place "anywhere in the world," Mr. Zammit allegedly said, according to the second person with direct knowledge. Mr. Dalli would have to pledge to change the tobacco rules, this person said. The other ?0 million would be paid after the legislation was actually changed, the second person said.. On Feb. 21, Swedish Match told the Maltese lobbyist it was rejecting the request for a payment, said Patrik Hildingsson, Swedish Match's vice president of public affairs. The company informed the Swedish government three days later, Mr. Hildingsson said, and reported the information to the European Commission in May, according to the antifraud office. Mr. Dalli said in an interviw with the Malta Independent newspaper over the weekend that Mr. Zammit had arranged a meeting with him and the Maltese lobbyist on Jan. 6 to discuss the snus issue. He also said he had attended a meeting organized by Mr. Zammit in August 2010 with tobacco-industry officials. Last week, after he said he would step down, Mr. Dalli said in a video interview with the New Europe newspaper that Mr. Zammit "never asked me for any meeting" with officials from the European smokeless-tobacco industry. According to two people familiar with the probe, no minutes were taken of either meeting. The Jan. 6 meeting wasn't recorded in Mr. Dalli's agenda, these people said, and no commission officials were present. A European Commission spokesman said Monday that Mr. Dalli had held "unofficial contacts with several tobacco companies." "In light of the conclusions, it was politically untenable to remain in his post," said the spokesman, Olivier Bailly. The rules on what meetings officials should hold place the onus on the commissioner to act responsibly and transparently. However, Frederic Vincent, an EU spokesman for the health portfolio, said the European Commission abides by World Health Organization-linked international standards that aim to ensure contacts with tobacco-industry officials are limited and properly documented. In an interview with The Wall Street Journal on Monday, Giovanni Kessler, OLAF's general director, reiterated that there was no "conclusive evidence" that Mr. Dalli was "behind the request of money." But he said he believed Mr. Dalli hadn't been upfront with the investigators. "You put everything together, you see the possible lies…and then you draw conclusions," he said. "And then we say on this basis that our conclusion is he was aware of this person…asking money in his name." In the weekend interview with Malta Independent, Mr. Dalli argued he was the victim of entrapment by the tobacco industry to derail a tightening of EU tobacco rules. He suggested European Commission President José Manuel Barroso forced him to step down quickly to prevent the tobacco rules proposals from going to the next stage, where they would be discussed within the Commission. Mr. Dalli said he was given only half an hour to decide whether to resign and that he wasn't given access to the OLAF report by Mr. Barroso. Meanwhile, the European Commission said Malta's foreign minister, Tonio Borg, would be nominated to succeed Mr. Dalli. Enditem
