Chief Minister Fabian Picardo dismissed claims on Tuesday that he interfered with Operation Delhi to protect his close friend and mentor, James Levy, KC, insisting his focus was on preventing reputational risk to Gibraltar and, later, his firm belief that former police Commissioner Ian McGrail had lied to him.
Mr Picardo was giving evidence to the McGrail Inquiry for the second day, with much of the questioning focused on events around May 12, 2020, when the Royal Gibraltar Police attempted to execute a search warrant at Mr Levy’s office and home.
At the time Mr Levy was a suspect in Operation Delhi, an investigation into the alleged “hacking and sabotage” of the National Security Centralised Intelligence System [NSCIS], and into an alleged conspiracy to defraud Bland, the private company that operates the system. He was never arrested or charged.
The Inquiry had previously heard that Hassans held a stake in 36 North, the company at the heart of the police investigation, and Mr McGrail’s lawyers have alleged that both Mr Levy and Mr Picardo, as partners of Hassans, the latter on sabbatical, stood to gain financially from the alleged fraud.
Adam Wagner, Mr McGrail’s lawyer, quizzed the Chief Minister on his interest in 36 North and his “myriad” contacts with Mr Levy and his lawyers in the days after May 12, questioning whether this had been appropriate behaviour and suggesting it raised multiple conflicts of interest.
Repeatedly, Mr Picardo maintained that he felt the RGP’s decision to seek a search warrant for Mr Levy, rather than a less invasive production order designed to protect legal privilege between lawyers and clients, was an “abuse” and put Gibraltar’s reputation at risk.
But while he had criticised the RGP for that decision, he insisted he never sought to interfere in the investigation itself.
“I did not interfere with this investigation,” Mr Picardo said.
“It continued after the 12 May and it continued after Ian McGrail was no longer Commissioner of Police.”
“I was not interested in, in any way, in interfering with the investigation in respect of any of the Operation Delhi defendants or anybody else, including Mr Levy if he had become a defendant.”
Mr Picardo said his overriding concern was about the potential impact on Gibraltar’s reputation of police seizing the electronic devices of a top lawyer, including legally privileged communications with his global clients.
“That's how you can square what you did with this statement that you never interfered with an investigation?” Mr Wagner asked.
“Absolutely,” Mr Picardo replied.
“I never asked them not to carry out the investigation into [former Operation Delhi defendants] Perez and Cornelio. I never asked them to stop the investigation of James Levy.”
“I never asked them to stop any investigation whatsoever.”
“I just happened to believe then, as I do now, that the search warrant was the wrong way to go about getting particular evidence in that investigation.”
‘LIED’
There were questions too about a fractious meeting in No.6 Convent Place on May 12, 2020, between the Chief Minister and Mr McGrail in the presence of Attorney General Michael Llamas, KC.
Mr McGrail, who happened to be in No.6 Convent Place that day, had alerted the Chief Minister and the Attorney General by text about the search warrant and was called up to the Cabinet room, where he claims he was “berated” by Mr Picardo.
In that meeting, Mr Picardo claimed he was lied to twice by Mr McGrail when asked about the search warrant in what the Chief Minister accepts was “robust” language likely laced with expletives.
Mr Picardo said he “distinctly” recalled Mr McGrail first saying that had sought the warrant on advice from the Attorney General, something Mr Llamas immediately denied, and then on advice of the Director of Public Prosecutions, Christian Rocca, KC.
Mr McGrail denies saying this but Mr Picardo remained adamant over two days of questioning that his memory of the exchange was clear and that Mr McGrail, in his view, had lied to him.
Mr Picardo insisted his main concern at the time had been on the potential impact on Gibraltar’s reputation of police seizing the electronic devices of a top lawyer, containing legally privileged communications with global clients.
Mr Wagner put it to Mr Picardo that he had been unable to distinguish in his mind between his “highly emotional” response to the search warrant and his belief Mr McGrail had lied to him, and that policies on conflicts of interest existed precisely to address this type of situation.
“Let me tell you very clearly that my views in relation to James Levy as a friend and as a mentor, even in the heat of this moment, were subsidiary to my concerns about James Levy as a ‘rainmaker’ and the jurisdictional challenge that Gibraltar could face as a result of him having been served with a search warrant,” Mr Picardo replied.
Mr Wagner asked the Chief Minister why he had called Mr McGrail on May 12 and what outcome he had hoped for from the meeting.
The Chief Minister replied he wanted information as to why the RGP had sought a search warrant for a senior member of the legal profession, stressing again that his concern about reputational risk given Mr Levy’s high profile.
Mr Picardo noted that Mr McGrail had previously approached him to discuss another search warrant relating to a more junior lawyer in an unrelated case, precisely over potential jurisdictional concerns.
“Your hope for that [May 12] meeting was to get information from Mr McGrail, is that fair?” Mr Wagner asked.
“Absolutely,” Mr Picardo replied.
“Information as to why on earth they had decided it was appropriate to go by way of search warrant rather than production order. I think I've been explicit about that.”
“And then what happens is that the answers that I'm given are untruthful. They are, in fact, lies, and not just one, two.”
Mr Wagner sought to intercede but was stopped by Sir Peter Openshaw, the chairman of the Inquiry, who said: “You can't object to him answering the question, which is probably the most important you’ve asked during the course of one and a half hours.”
“It's uncomfortable for you to hear, but there were two lies.” Mr Picardo continued, addressing Mr Wagner.
“The first, that the Attorney General had advised that the warrant should be obtained, which the Attorney General very quickly said was not true.”
“And second, that he'd been advised by the DPP to proceed by way of search warrant.”
“And that is what led to my loss of confidence.”
“If Ian McGrail had not lied to me, if he’d simply said this was the decision that the police took, it's the police that are entitled to take it and I stand by it, then that would have been it on that day. Full stop.”
“But that's not what he did. He lied to me.”
NSCIS
Another strand of questioning focused on the relationship between Bland and 36 North before May 12, 2020, and on the Chief Minister’s discussions with Mr Levy in the preceding two years.
The Inquiry was told that Bland was discussing the transfer of the NSCIS to 36 North, which had been set up by two of its senior employees – including the person who developed the platform - and hoped to take over the running of the system.
Initially there had been agreement between the two parties, but this later soured.
Mr Picardo said he had been in contact with both Mr Levy and Bland chairman James Gaggero over this period and that the Government would have agreed to an amicable transfer to 36 North, which would recognise the Government’s ownership of the platform – Bland believed it owned the intellectual property of the software – and be cheaper.
Additionally, the Government believed there were opportunities to sell the software internationally.
“If it came to a dispute between them, then I would not be backing either side,” Mr Picardo said.
“If what was happening was that one of them wanted to leave and strike off on their own by way of agreement, I would be happy to see that happen.”
“In particular, I was happy to see it happen in a way that led to 100% ownership of the platform being confirmed to be of the taxpayer, a lower amount of maintenance payable per annum etc.”
“So there were advantages to the taxpayer, and James Gaggero was not adverse to that also, so long as certain things were dealt with at the time.”
Mr Wagner asked how it could be appropriate for a Government minister to be involved in the transfer of a Government contract to a company that he part owned.
Mr Picardo said the stage where his “exclusion would have had to occur” had not been reached and that, at the stage a contract was produced, he would have stepped back and the matter would have gone to the Chief Secretary for the “usual process of approval”.
In any event, that did not happen, the Inquiry was told.
In September 2018, Mr Gaggero approached Mr Picardo and informed him of what he suspected was the sabotage of the system.
Mr Picardo told the Inquiry that he took a decision “there and then” that the contract should remain with Bland.
He said this decision addressed any concerns about a conflict of interest arising from his stake in 36 North, which by May 12, 2020, was “worthless”, and debunked the suggestion that he was favouring 36 North because of his relationship with Mr Levy and his sabbatical partnership in Hassans.
Additionally, according to the Chief Minister, Mr Gaggero had not at that point gone to the RGP to report the alleged sabotage of the system.
“I believe that is the day on which James Gaggero also told me, ‘I think I need to report this to the police’, so he had not yet done so,” Mr Picardo said later, responding to a question from his lawyer, Sir Peter Caruana, KC.
“And I said, ‘I think if you think you should report this to the police, of course you should report this to the police’.”
“Operation Delhi has not even begun when I say, ‘this contract is not going anywhere, it's staying with Bland.”
Mr Picardo said too he had not been involvd in the RGP’s decision on October 2020 to no longer regard Mr Levy as a suspect in Operation Delhi, or in the Attorney General’s decision in January 2022 to discontinue the prosecution of the Operation Delhi defendants.
At the time, Mr Llamas said he had taken the step to use a legal mechanism known as a ‘nolle prosequi’ because of “matters in the wider public interest”, adding that to explain his reasoning in any further detail would defeat the decision to discontinue the case. The reasons have never been made public.
Mr Picardo said he had no role in this decision and learnt of the reasons at the same time that the Attorney General briefed a small number of people on it, including political leaders.
He said he had been concerned at the time that the decision would have a negative political impact, concerns that were proved right.
CONTACTS
Mr Picardo was asked too about contacts he had after May 12, 2020, with both Mr Levy and his lawyers, including a meeting on a Sunday some days later with Mr Levy and Lewis Baglietto, KC, his lawyer.
All three have said the meeting, revealed by Mr Picardo in written statements to the Inquiry, was focused on Mr Levy’s desire to step down as chairman of Community Care to protect the charity he has led for over 30 years.
The Chief Minister asked Mr Levy to remain in the post and acknowledged they would also have discussed the search warrant and “high level” ideas on how it could be legally challenged.
But Mr Picardo said he was not offering “legal advice” and considered he was talking with two friends, not encouraging a challenge.
“I don't accept that I was encouraging, supporting or otherwise promoting Mr Levy’s claims,” the Chief Minister said.
“I was encouraging and supporting Mr Levy, who, as he has said, was in a very difficult situation, a very difficult mental state at the time.”
He was pressed by Mr Wagner on the appropriateness of his contacts with Mr Levy, including WhatsApp exchanges that Mr Picardo had disclosed to his lawyers some time ago but which his lawyers had mistakenly not provided to the Inquiry until last weekend.
Mr Picardo said his contacts with Mr Levy were “simply sharing ideas”.
“I've known him, as he has said, for very many years, we are close personal friends.”
“These days, we don't see each other as much as we would, but I would consider him one of my closest friends, also a mentor for me in the law.”
“I mean, you've got to understand, I have the highest regard for this man for reasons which are professional and which are institutional and which relate to the jurisdiction.”
The Inquiry heard that Mr Picardo had also shared with Mr Levy and Mr Baglietto information from the Attorney General on what the DPP had told him when asked about the search warrant after May 12.
Mr Llamas initially told Mr Picardo that the DPP had “strongly advised” police against using a search warrant, the Inquiry heard.
That language was a mistake – the DPP told the Attorney General he had offered no advice, either for or against – and was later corrected, but not before it had made its way into a Hassans letter to the RGP.
Mr Picardo said he had not been expressly told to keep that information confidential and that, given he had made no secret at the time of his views on the search warrant, he had felt at liberty to share it, including with Mr Levy and Mr Baglietto.
Julian Santos, the lawyer for the Inquiry, put it to him that on some occasions the need for confidentiality was implicit, and that this was one such occasion.
Mr Picardo disagreed, adding he had not shared the DPP’s advice to the RGP, but rather “the absence of advice”.
GPA
Earlier in the session, Mr Picardo was questioned by Mr Santos on the events leading the Chief Minister and then interim Governor, Nick Pyle, to invite the Gibraltar Police Authority in late May, 2020, to consider inviting Mr McGrail to take early retirement.
Both men had lost confidence in Mr McGrail, according to Mr Picardo for different reasons that came together in the days after May 12.
Mr Picardo has told the Inquiry that his belief he had been lied to was the key element of his loss of trust in the former Commissioner, but that his doubts were exacerbated on May 14 when he learnt from a Spanish media report about a civil claim against two RGP officers arising from the fatal collision at sea between a police patrol boat and a rigid-hulled inflatable boat on March 8, in which two Spanish nationals died.
Mr Picardo said Mr McGrail should have informed him directly of the development.
Mr Pyle has cited as a central element of his loss of confidence his belief that Mr McGrail withheld timely information about the location of the collision in Spanish waters, even though the potential international implications of the incident fell within the Governor’s responsibilities. Mr McGrail denies this and insists he was transparent throughout.
“I think it's important to understand the consequences of what was happening here,” Mr Picardo said, reflecting on the meeting at which he and Mr Pyle explained their position to Dr Joseph Britto, the GPA chairman.
“The Governor, who is appointed by the United Kingdom, [and] the Chief Minister, who's directly elected by universal suffrage of the people of Gibraltar, together have lost confidence in the senior law enforcement official in Gibraltar for the reasons that we've set out.”
“That is quite seminal, and that's why we were communicating vehemently to the chairman of the GPA how we felt.”
“But the GPA process, because actually it has a life of its own, is a matter for the GPA.”
Mr Picardo was questioned on amendments he made, at Dr Britto’s request, to the letter in which the GPA invited Mr McGrail to take early retirement because of the loss of confidence.
At the heart of the questioning was the independence of the GPA and the process it followed.
Mr McGrail’s lawyers have described it as an “unfair, frankly shambolic and sham” process “stage managed” by the Chief Minister, a claim the Government parties firmly deny.
“I was being asked by the GPA here to assist them with the language of their letter, and that's how I did it,” Mr Picardo said.
“I wasn't providing legal advice to the GPA.”
Mr Santos asked: “They were quite substantive additions to the letter in those [highlighted] yellow areas [showing the Chief Minister’s amendments]. Do you think that that was consistent with the Authority's independence?”
“The Authority independently asked me to provide them with that additional material,” Mr Picardo said.
“I didn't ask them to ask me, they independently decided to ask me through their chair to provide this material.”
“I do believe it is in keeping with the view that they are independently pursuing this process.”
Mr Picardo was asked by Mr Santos why, if the May 12 meeting and the Operation Delhi search warrant were the core reason for his loss of confidence in Mr McGrail, he had not gone into greater detail in the letter he had helped the GPA to draft.
This is relevant because GPA members have told the Inquiry that, had they known more about Operation Delhi at the time, they may well have taken a different decision.
The Chief Minister insisted he had given sufficient information to highlight that the loss of confidence was a consequence of his belief that Mr McGrail had lied to him.
Mr Santos put it to him that he had been “particularly coy” and described his concerns about the warrant in the “vaguest terms”.
But Mr Picardo, repeating earlier evidence, said he had been “evangelising” to everyone he spoke to about the warrant and his views on the RGP’s handling of it.
“And therefore many people were talking to me about the warrant, about Mr McGrail's misleading and lying and the issues that surrounded that,” Mr Picardo said.
“So I was not being coy about it at all. Whether I added more or less to the letter about that issue does not change the fact that I was not being coy about it.”
And he later added: “The key and fundamental issue is the misleading.”
“He could have misled me about anything else, about the price of eggs. It's the misleading that’s the issue.”
Mr Picardo also dismissed the suggestion that he sought to influence Mr Pyle’s loss of confidence in Mr McGrail, adding the interim Governor, for his own reasons, required no persuasion and had been ready to exercise powers to call for Mr McGrail’s resignation if necessary.
“Not only was I…pushing at an open door, this door swung open before I put my fingers on it,” he said.
WHISTLEBLOWERS
The Inquiry has heard allegations that that former police officers received inducements including jobs in the public service in exchange for negative statements against Mr McGrail.
It was told that police whistleblowers, having first approached the Gibraltar Police Federation, subsequently liaised with a Government official in No.6 Convent Place and in some cases were offered letters of assurance, signed by the Chief Minister, as a safety net in the event of repercussions in their job.
Mr Picardo said it was the Inquiry’s call for evidence that gave rise to this situation, dismissing the suggestion that the whistleblowers had been offered “jobs with no strings attached” in exchange for negative statements against Mr McGrail.
“Nothing was transactional in any instance, and it wouldn't be,” the Chief Minister said.
He later added: “The provisions of the Employment Act provide for compensation in the Employment Tribunal if the individual has not been properly protected from suffering a detriment.”
“But what the Act requires is that the employer act to prevent the individual suffering a detriment.”
“And if we don't do that, then eventually an individual who has suffered a detriment is potentially able to take us to the Employment Tribunal, or any employer, to the Employment Tribunal and there recover damages.”
“But what the statute talks about is ensuring that employees do not suffer detriment if they are whistleblowers.”
The Inquiry continues.