Judge Judith Fonseca, one of the panel of judges presiding over Criminal Court number 6 in Lisbon, has announced the decision to acquit all 10 suspects in the Ferrostaal submarine case due to lack of evidence.
The decision has dealt a severe blow to Portugal’s Central Bureau of Investigation and Prosecution (DCIAP) as the defendants - three German managers of the GSC consortium and 7 Portuguese businessmen – were expected at least to receive convictions, fines and suspended sentences in a tough display of Portugal’s alleged new attitude towards corruption.
The €20.2 million paid covertly to an account of a company that advised the German consortium, money that later was distributed to unknown accounts, was for reasons other than passing on 'commission payments' to those involved in this corrupt affair.
The men on trial had been accused of fraud and forgery by swindling the State over the purchase of two submarines for the Portuguese Navy.
The agreed price was €1 billion, with €600 million flowing back from the German seller via investments in Portugal. Not a cent has been received from the German part of the deal despite successive Portuguese Economy Ministers claiming the German investments in Portugal ‘are being looked at.’
At trial, the prosecutor downgraded the requested punishment from a suspended sentence to a fine but even this was not handed out as the evidence in a report from the company Inteli, which was crucial to the prosecution prepared by the Central Bureau of Investigation and Prosecution (DCIAP), was ‘not considered valid’ as it served to pre-judge the case.
The submarine purchases go back to 2004 when Paulo Portas, the current deputy Prime Minster, was Minister of National Defence, and the current President of the European Commission José Manuel Barroso was Portugal’s Prime Minister.
The German part of the case was settled in court in late 2011, with the German company’s former executives Johann-Friedrich Haun and Hans-Peter Muehlenbeck sentenced to fines and both receiving suspended jail sentences of two years.
The first project under a new investment agreement, signed by Alvaro Perreira when Economy Minister, was for a €150 million refurbishment of the Algarve’s Alfamar Hotel. This later was abandoned on cost grounds but not until the defendants' lawyers pleaded that the case should be dropped if the investment went ahead. No other investment has been announced by the German company and the Portuguese taxpayer sits and waits for the contracted €600 million investment from the Germans which now seems even more unlikely every to happen.
A previous attempt by Ferrostaal to pass the purchasing of automotive components from 10 Portuguese companies was found not to constitute part of the agreement to invest €600 million in Portugal.
According to the prosecution, the fraudsters profited to the tune of €30 million while the Portuguese taxpayer paid €1 billion for two old submarines (*see comments below) worth €400 million at best.
Those acquitted today were Horst Weretecki, Antje Malinowski, Winfried Hotten, José Pedro Sá Ramalho, Filipe Mesquita Soares Moutinho, António Parreira Holterman Roquete, Rui Moura Santos, Fernando Jorge da Costa Gonçalves, António Lavrador Alves Jacinto and José Mendes Medeiros.