17 January 2009

Freeport Corruption: The Denunciation DVD

The recording of a conversation between a member of the board of Freeport and a consultant alerted the English to the corruption

by Felícia Cabrita

The ongoing investigation into the Freeport case in the United Kingdom includes, since 2007, a DVD with the recording of a conversation between a member of the board of that firm and an English entrepreneur, Charles Smith, in which the latter recognises that bribes were paid to Portuguese politicians in order to render the construction of the outlet in Alcochete possible. During the conversation, Smith explicitly implicates a former minister from António Guterres’ government – who, according to what SOL revealed in its last edition, is at the top of a list of 15 suspects who are targeted in the English investigation.

The recording was one of the first pieces of evidence that were collected by the English within the inquiry into the indicia of corruption and fiscal fraud in the process of viability of Freeport in Alcochete.

Smith has already been made an arguido in London

Charles Smith is a partner at Smith & Pedro, a consultancy firm that was hired by Freeport Plc, whose incumbency it was to obtain licenses and local approvals, apart from an Environmental Impact Study that would be favourable to the construction of a shopping complex well inside the Tejo Estuary’s Special Protection Zone (SPZ).

The two first environmental impact studies were not approved, but the third one was approved through a decision from the Council of Ministers, three days before the legislative election of 2002 when PS lost the power. At the same time, the boundaries of the SPZ were also changed – thus rendering Europe’s largest outlet viable.


Contrary to what happens with the process that is evolving in England, the DVD is not accepted by Portuguese justice, because the recording was obtained without permission from a judicial authority. But Charles Smith seems to be key to the English investigation, and according to sources that know the process, he was already heard and made an arguido by that country’s authorities. The entrepreneur is suspected of having been part of an “interest representation group” that acted close to the Portuguese government, promising substantial bribes to ensure the approval of Freeport.

Contacted by SOL in October (when it became known that the English had proposed a joint investigation team to Portugal), Smith declined to confirm whether there had been corruption or not. He merely clarified that he was no longer a partner at Smith & Pedro.

The English authorities contacted the Portuguese for the first time in 2007, to exchange impressions about the investigation that the PJ in Setúbal had started in 2005. The investigators already brought with them the DVD of the conversation between a member of the board of Freeport Plc and Charles Smith, which had been recorded at the outlet in Alcochete. In the recording, which is approximately two hours long, Smith admits that bribes were paid to several persons, including the former ‘top’ minister.

The British’s interest in the case started when, in the year of 2007, American group Carlyle launched a takeover of Freeport in London (a stock exchange position takeover). The offer was of 7,19 euros per share, but this value had been inflated through market manipulations carried out by the outlet itself.

The shopping centre in Alcochete had revealed a flop and was on the brink of bankruptcy. After an auditing, Carlyle perceived the fraud and tried to recoil, but the business venture was finalised.

The impasse awoke the British fiscal police, which in 2005 had received a rogatory letter from the PJ in Setúbal that was left unanswered. That letter included requests for data that related to the complex, namely the bank accounts of Smith & Pedro and of Freeport. A lot was at stake. The English royal family had interests in Freeport and their money was part of the defalcation that the firm had suffered. The investigators then followed the money trail and discovered that the capital had left England for Portugal, evading taxes through offshore companies that were based in Switzerland and in Gibraltar.

Payments in 50 thousand pounds slices

In order to mislead the banks, the payments to Smith & Pedro arrived in slices of 50 thousand pounds (totalling one million euros). And according to witnesses, at least another five million pounds entered through the office of a well-known Portuguese lawyer as payment of commissions, also through outside offshore companies. According to the English, “there are indicia that these were corrupt payments”.

After the PJ carried out searches to his firm, apprehending computers and the complete accounting records, Charles Smith rushed to the Finances in order to remedy the tax evasion concerning the money that he had received from Freeport. He then requested the fiscal correction of the years of 2003 and 2004, and paid 400 thousand euros out of his own pocket. From that day onwards, the Englishman has been claiming the reimbursement of this money from Freeport.

A member of the board of Freeport then came to Portugal to talk to him. But the investigation in London was under way and the member of the board came with a second intention.

In the presence of a Portuguese engineer – João Cabral, who had been hired by Smith & Pedro to give technical support – the aforementioned member of the board secretly recorded his conversation with Charles Smith. The enormous amount that the latter was demanding from the firm was targeted by detailed questions. In a corner of the room, with a desk between them, the English representative wanted to know the destiny of the million euros that Smith had received. And Smith spontaneously replied that the money had been used to “pay commissions to everyone”.

The member of the board of Freeport insisted: “How do you explain that so much money had to be paid?”. Smith hesitated, but picked up on the plot. The money had been used to pay the amount that had been agreed upon during a meeting that had been held two years earlier with a minister (whom he always referred to by his second name during the conversation), in order to facilitate the licensing of the outlet in Alcochete.

Less protected from the hidden camera was João Cabral, who appears several times in a close up. But the engineer told SOL that he has no memory of this meeting: “I attended tens of meetings with them and I don’t know if any one was recorded. If that was the case, I was not asked for permission”.

According to João Cabral, the version of the story is different and it was Smith & Pedro that was damaged: “Our English friends acted in ill will: they didn’t want to pay VAT and that was what I heard engineer Smith and doctor Manuel Pedro complaining about in several meetings”.

Nevertheless, the engineer’s descriptive memory failed to retain the meeting that was held over bribes and traffic of influences. When confronted with the fact that he had been filmed, he maintains that he can’t remember the meeting and adds: “Despite the fact that in England that can be used as evidence, when one enters that kind of scheme then it’s because someone paid someone, and for that to be valid, it’s necessary for someone to say that he received”.

AG denies suspect minister in Portugal

Meanwhile, the English authorities continue to wait for a reply from the Portuguese concerning their request for cooperation, which was sent last week, for the access to the data that was collected by the Portuguese inquiry. It is recalled that this process was opened in February 2005 by the Public Ministry in Montijo, with the PJ from Setúbal carrying out several searches one year later, including at Freeport and at Smith & Pedro, and also at the offices of the Mayor of Alcochete, José Inocêncio, and of his assessors, where the entire process of Freeport’s licensing and construction was found.

Last Saturday, following SOL’s article about the English investigation, the Republic’s Attorney General, Pinto Monteiro, made a communiqué, asserting that the Portuguese investigation does not have a former socialist minister as a suspect: “The process does not contain, up to this moment, any juridically relevant indicia that show the involvement of any minister of the present Portuguese government or of any previous government in eventual corruption crimes or any other”.

The AG further informed that “the investigations await the fulfilment of a rogatory letter that was sent to England in 2005 and the fulfilment of accountancy examinations that were requested to the competent department at the Polícia Judiciária”.

Environment fines Freeport

The General Inspection for the Environment (GIA) fined Freeport of Alcochete in 2004, due to a failure to comply the decision of environmental impact and demanded the payment of the maximum fine that is foreseen by law: 30 thousand euros. According to what SOL was able to establish, the issue was the fact that during the construction of the complex, the demands that had been made by the state had not been complied with – concerning the treatment of residual waters and the preservation of natural areas, among others – in order to compensate for the consequences of the impact of the project on a protected area.

Meanwhile, Freeport contested the fine at the Court of Montijo. The process lasted for two years, and four witnesses that were summoned by Freeport, which was represented by lawyer Vasco Vieira de Almeida, were heard. They included João Cabral and the Mayor of Alcochete, José Inocêncio.

In 2006, the Court decided to maintain the application of affine, but reduced the value to 2500 euros, the minimum amount foreseen by law. Despite the fact that all the facts that the GIA had accused Freeport of were proved, the Court considered that Freeport had acted without intent.

Throughout this entire process, the outlet kept functioning without its respective usage license. According to information that was given to SOL by the municipality of Alcochete, this license was attributed on the 29th of November 2007, after the Regional Development Coordination Commission (RDCC) of Lisbon and the Tejo Valley gave its positive opinion concerning Freeport’s environmental impact study.


Source: SOL 17.01.2009, paper edition

Dowload SOL article In Portuguese - PDF File here

8 comments:

  1. ... bribes... Portuguese minister...
    nothing new ! don't be upset !
    everybody tries to get his share of the big-money...if he/she can... that's the fundament of our society.... and I think you don't want to know where (in who's pockets..) the biggest part of the EC millions for Portugal ended up ;-))

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  2. Estou baralhada, muito baralhada. Vejamos então:

    1 - alegadamente "um ministro" do governo PS, em 2004 recebeu dinheiro por ter facilitado a abertura do Freeport de Alcochete.

    2 - alegadamente o encobrimento desta imoralidade terá sido usado como moeda de troca para o encobrimento da verdade no caso Madeleine.

    3 - que motivos haverá AGORA para que os Ingleses se mostrem tão interessados na VERDADE sobre o Freeport, quando o actual Governo é de maioria absoluta do PS ?

    4 - os ingleses DESCOBRIRAM que a sua luta vital é contra a corrupção ?

    Vou colocar as minhas orelhas de burra e continuar a olhar para o palácio !!!!!!!!!!!!!!!!

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  3. Resposta:

    1- Sim, um antigo ministro do governo do Guterres, recebeu luvas para permitir a construção do Freeport numa área ambiental protegida. Alegadamente esse ministro faz parte do governo de Sócrates da hoje, pode não ser um ministro hoje em dia, pode ser um secretário de estado ou pode mesmo ser o próprio PM. Quem sabe? O que se pode dizer é que quando esse nome se souber, algumas, se não muitas cabeças vão rolar.

    2- O 'encobrimento' do nome do antigo ministro do PS, ou digamos a pressão chantagista de um tal Brown ou/e Blair por motivos ainda não totalmente óbvios, serviu e serve objectivos de índole politica. Havendo 2 ou três hipóteses a destacar para tal chantagem :

    a) O apoio incondicional do governo actual e seus representantes em Bruxelas ao próximo presidente da EU, candidato Tony Blair, antigo primeiro ministro Inglês pelo Labour - Trabalhistas;

    b) Sabe-se que a família real está envolvida nos dinheiros que serviram para a construção do dito freeport, dinheiros esses que foram branqueados préviamente numa offshore. Portanto, imagino, uma troca de favores deste género; os bifes dizem: 'nós não dizemos o nome do ex ministro na nossa investigação' e os tugas dizem: 'nós não investigamos as possíveis conexões a determinados membros da vossa querida família Royal'

    Suficiente será dizer que o encontro de Sócrates e Brown primou pela originalidade de discutirem o caso Madeleine McCann. Nunca tal antes tinha acontecido.

    3- Recentemente em Haia, na sede do Eurojust, entre polícias e procuradores de ambos os países foi discutido, alegadamente, o caso Maddie e o caso Freeport. Eventualmente discutiram também a estranha demora de três anos dos Ingleses para cumprirem uma carta rogatória, e as condições para que esta fosse realizada. Presume-se que houve novamente uma reafirmação da troca de "tu lavas a minha mão [suja] e eu lavo a tua".

    4- Os Ingleses nisto de corrupção, lavagem de dinheiro, fabricarem armamento ilegalmente, apoiarem guerras falsas, voos da CIA ilegais, falsificação de dados, perda de dados, manipularem informação e mentirem descaradamente aos súbditos de sua majestade são 'experts'.

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  4. Las preguntas de Maria C. Lopes son también, en parte, las mías.

    Y la respuesta de Deep Throat Tuga me deja pensativa.

    Vuelvo a leerla. Intento comprender.

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  5. I really don't know what to make of this Freeport case. I'm sure there was corruption and that probably this case had some bearing on the strange occurrences in the Madeleine case. Though, like some have commented, do the English really want to get to the bottom of this case or is the mention of evidence against a government minister merely a threat so that some end may be achieved? Do the police forces in both countries function without government interference or does the government have the final say? What gives me hope is that the ridiculous lengths that the McCanns have gone to may not just be to con the public, maybe their actions indicate that there are still honest people in the legal system whom they and their associates fear.

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  6. Lembremos a ordem dos acontecimentos:
    2004 - caso Freeport denunciado pelo jornal Independente, entretanto encerrado, apenas por causa da redução da Zona protegida do Tejo para viabilizar a sua construção.
    2007 - caso Maddie.
    Como pode um acontecimento de 2004 ter a ver com outro acontecimento de 2007?
    Agora este reavivar do Freeport tem a ver com investimentos da Coroa Britânica. Convém lembrar que é o próprio Estado Britânico que paga à Coroa; não se entende portanto essa ideia de que é a Coroa que lava dinheiro!
    Ao contrário quem lava dinheiro são os nossos "ilustres" políticos cujos valores de "serviço público" são muito baixos; tão baixos que basta ver que ninguém assume culpas e ninguém se demite, coisa impensável no Reino Unido.

    Dizia um antigo oficial da PIDE que os Serviços Secretos britânicos são tipo bulldog - depois de morderem... só matando o animal é que ele abre as mandíbulas!

    Aguardemos o desenrolar; tal como se pode ler no http://doportugalprofundo.blogspot.com

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  7. Cleary the british are up to no good.

    As all of you are aware, since 2007 the relations between the two leaders , aren't in good health.

    Remember the UE/Africa conference in 2007, where Portugal invited Robert Mugabe the President of Zimbabwe? If you do, you might remember a missing gordon brown.

    Remember the connections between Gordon Brown and the Madeline case?

    Something is very wrong, because this facts are the same that 2004. And why didn't, this so called police answered the Portuguese letter regarding this money movements. Why the silece now? This british so called inspectors arent' acussing a simple business man, it is a Prime-Minister of an Allied country. Is this the respect this country as of us?

    Peço perdão a todos os Portugueses por usar a língua inglesa para comentar. Mas, estes bifes andam calados e literarlmente a ignorar este caso Freeport. São eles os responsáveis por esta confusão toda. Se existia indícios de corrupção, o caminho a seguir seria a justiça não os media.

    E 50000 libras !? Isso são peanuts para a corrupção nacional. Até se vair roubar mais isso no passe de um jogador da 2º Liga.

    Puro Snobismo inglês.....

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  8. There has always been corruption in the British Goverment and will continue to be so. They all have something on each other which keeps them silent.The Blackout demanded by Blair over Operation Ore as troops were sent to Iraq in a war built on lies once again by the British Goverment, is just the tip of the iceberg.

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