In what must rank as the undestatement of the year to date, an independent audit delving into Portimão’s labyrinthine financial affairs, has revealed 'several irregularities' and cites careless and sloppy management by the team under the fiscally challenged former mayor Manuel da Luz.
The report already has been sent off to the Attorney General's Office and questions will be asked as to how a council can end up with debts of €160 million with no higher authority calling a halt to its madcap spending.
The final document fills several hundred pages in which the auditors state that between 2009 and 2013, most of the council’s large spending projects were divided up into many small invoices to avoid the use of public procurement procedures which could have stopped any reckless spending from continuing.
This invoice trick is the same one used by Isabel Soares at Silves council in the Viga d’Ouro case where an enquiry later discovered that invoices for work carried out between 2004 and 2006 has each been for €4,987.98. This enabled a large contract to be awarded directly to a preferred supplier without the need for public tender as each invoice was just below €5,000.
Soares said she ‘merely signed the documents’ that authorised these multiple payments and astonishingly, was exonerated before skipping off to run Águas do Algarve.
As expected, Portimão Urbis, which was set up to run the council’s markets, transport and cultural activities, has been a financial black hole of epic proportion, sucking in ratepayers’ money at an astonishing rate so that by 2012 it had been responsible for 35% of the total municipal debt.
Portimão Urbis has since been wound up but many of its employees have been found jobs at the council, much to the incumbents' complaints.
In the case of Expo-Arade, a company 49% owned by by Portimão Urbis, and which built and ran the €13 million Portimão Arena, "this is a public-private partnership", say the auditors, adding with masterful use of language, “where the public interest was not properly addressed.”
In the years covered by the audit, the accumulated losses at the council added up to €118 million and there was not a single year in which revenue reached even 50% of target, yet the gravy train rolled on with a casual wave toward the normal financial checks and balances of local government.
The result of this audit which represents a harrowing insight into the Manuel da Luz years has been sent off by the current mayor Isilda Gomes to the Attorney General's Office, the Court of Auditors and the Ministry of Local Government.
Portimão council is undergoing an extraordinary inspection by the General Inspectorate of Finanças which is looking into Portimao Urbis.
The ex-Mayor Manuel da Luz, Deputy Mayor Luis Carito and Councillor Jorge Campos already have been arrested and accused of financial crimes and if the government audit into Manuel da Luz's period of rule is anything like the independent one commissioned by Isilda Gomes, criminal charges will have a good prospect of sticking.
Portimão's long-suffering ratepayers have been badly served by those they voted into power to look after their interests, to develop the city and to run the council's finances on their behalf in an orderly and responsible manner.
Ratepayers now are faced with a €160 million bill for a period when financial controls and council accountability were totally absent.
Comments
If Isabel Soares got away with "I just signed the documents," without apparently taking note of the content of the documents, perhaps the same defence will work for him.
Yet there are countless examples that it does not attempt to do likewise to the 'special people' who are behaving badly. The ones controlling or with access to the 'good things' - as here public finances.
So Portugal, as in a developed country, specifies a limit, above which a public entity (here a municipal) must report its spending.
Surely even just 30 years ago some bright spark could have insisted municipals and such like report as irregularities such as repeated payments to the same contractor of any amount that is 'just under' that upper limit before notification to the higher authority is needed ?
With the will to tackle fraud of public funds - the accounting software itself could have been preprogrammed to report these payments!
We must remember that in Madeira over €2bn went missing with just 2,000 dodgy invoices.
These constantly repetitive stories of fraud, mismanagement of public money, abuse of power, corruption and even just old fashioned theft make one thing abundantly clear.
As with Greece - few citizens in either country had any notion that 'reforms' should have started before their countries even joined the EU. Over 30 years ago in Portugal's case.
Not 3 years ago as we so often hear from protesting Portuguese 'We are reforming!' with the Troika here. And now the Troika has in theory gone equally abundantly clear- so the reforms stall !