Espírito Santo families shared submarine commission payment

submarineThe five clans descended from the founder of Banco Espírito Santo discussed details of a €30 million 'commission payment' received by subsidiary Escom at meeting of the Superior Council of Grupo Espírito Santo.

The meeting in November this year was notable for the challenge by José Maria Ricciardi for the Ricardo Salgado’ leadership of the group but also for the discussion of the purchase of two submarines by the Portuguese government from the German consortium led by Ferrostaal,a nd how to divide the commission.

In 2004 Escom has received €30 million for ‘consultancy services’ from the German consortium. Ricardo Salgado reported that "They gave €5 million to us and they (the administrators of Escom) kept €15 million.”

The open discussion of these payments included details of who in the five families got what. At the time of the payment, Grupo Espírito Santo held 67% of Escom, the remaining 33% was owned by Helder Battaglia.

Banco Espírito Santo International had been hired by the Barroso Government as a minority partner in the financial consortium that ‘loaned’ the billion euro purchase price for the purchase of the two German submarines.

A report in news service ‘i’ today asks why the payment was made from Escom to Espírito Santo family members, pointing out that there is only a slim chance that the payment can be justified and calls on the Central Bureau of Investigation and Prosecution to investigate this aspect of the submarine affair which is part of the commission’s report due out on October 2nd.

Ricardo Salgado already has failed to explain the basis of the ‘gift’ of €14 million received from a customer, one José Guilherme despite the fact that a CEO of a bank may not receive gifts from clients - he may struggle to explain this latest multi-million euro transfer should anyone get around to asking him.

The fee paid by the Germans to Escom was in part for work on the 'contra deals' which never took place, the resulting payment to Escom raised questions at the time for its size and the lack of work done to justify such a sum.

Expresso revealed in March this year that the final recipients of the money sent to Escom, after the money was passed through various entities and countries, were in fact the directors of Grupo Espírito Santo and Escom.This was the money traced to an offshore account in the name of "BES directors."

In the Official Gazette today there is a notice that a parliamentary committee is to be set up to investigate the management of BES and the Espírito Santo Group. The remit includes an evaluation of the performance of the government and the financial supervision provision since 2008.

Performance will be evaluated "in view of the specific duties and responsibilities of each stakeholder in relation to the defence of the interests of taxpayers, the stability of the financial system and the interests of depositors, other creditors and employees of the institution," reads the resolution.

The commission also will evaluate the process and the conditions of surrounding the bail out of BES by the Bank of Portugal "and its consequences, including the precise knowledge of asset allocation and risk" when BES was split in two, creating Novo Banco.

The commission will look at the intervention of the resolution fund used to bail out BES and the possible use, "direct or indirect, immediate or deferred," of public money.

The commission also will investigate "the practices of the previous management of BES, the role of external auditors, the relationship between the BES and the members of Grupo Espirito Santo.”

As for the commission of enquiry into the submarine case, the report will be submitted to parliament tomorrow after 155 days of work, 48 hearings, 53 interviews and 62 meetings. Amendments may be submitted until the 7th October after which there will be a vote.

The report will almost certainly avoid conclusions as to the €30 million paid to Escom and the part paid to the Espírito Santo families.

This will be seen as a whitewash especially as the German court already has sentenced two Ferrostall directors and the former honorary consul of Portugal in Munich for bribing foreign officials with the €30 million paid to Escom.

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+1 #2 Daniel Edwards 2014-10-02 12:03
No-one knew how many billions of dodgy Russian mafia money was in Cyprus banks until the German Secret Service 'leaked' to Der Spiegel.

But it justified crashing the entire Cypriot economy rather than pay these types back with 'good' EU money.

Likewise we must hope that the German Secret Service is ferreting away against Portugals interests in exposing these arms deals.

As Enid says - the Germans assumed they were offsetting the millions paid over as 'consultancies' into tourism projects that, when up and running would have made them millions. As owners themselves or when selling on.

It was an entirely understandable deal between two EU partners, one 1st the other 3rd world. Much of it was known to be 'grease'.

Our German cousins must then have been well pi**ed off at having more begging bowls put out. And learning that the Espirito Santo's had trousered the 'local' money that should have been spread around.
+2 #1 Enid 2014-10-02 08:37
This is yet another example of why Portugal is insufficiently 'mature' to be in the EU.

It has only surfaced because it involved Germans and Portuguese. A Portuguese with Portuguese deal will never see daylight and many billions must therefore have been lost to the EU.

This one only saw daylight because the Germans did not setup the contra deal to fail. Any bung they made at national level was contingent on all the licences and permissions being 'smoothed out' at a local level for the tourism projects. As they will have been promised.

But the national figures, as we all know now, have no control over regional development and the 'mafia municipals'. Who, smelling an earner, also had their paws out.

No longer being cost effective to proceed the Germans pulled out but were left with gaps in their accounts - that needed explaining.

Get this shower out and bring in Burundi as an 'honorary member' of the EU. :cry:

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