Algarve businessman embroiled in international scandal

A German businessman and Algarve developer is under suspicion for having received a 1.6 million euro bribe in the national Submarines Scandal.

Jurgen Adolff, who is being investigated by the German Public Prosecutor’s criminal investigation authorities in Munich and Berlin, has been suspended from his post as Portuguese Honorary Consul in Munich pending further inquiries.

The businessman, who was appointed honorary consul 15 years ago under José Manuel Durão Barroso, then Minister for Foreign Affairs, has strenuously denied any impropriety.

It was first reported last week by German current affairs magazine Der Spiegel that Jurgen Adolff was being investigated for alleged traffic of influence and receiving 1.6 million euros in bribes from corrupt executives at the German industrial engineering giant Man Ferrostaal, which forms part of the German Submarine Consortium (GSC), which sold two submarines to Portugal in 2004.

According to Der Spiegel, the Honorary Consul, who is supposed to facilitate meetings between German businesses wanting to invest in Portugal, had allegedly approached Man Ferrostaal executives at the company’s headquarters in Essen telling them he would act as an intermediary with Portuguese movers and shakers to swing the billion euro submarines contract in their favour.

Jurgen Adolff, who was working as a paid official for the Portuguese government under the aegis of the Portuguese Ministry of Foreign Affairs Foreign Communities Office, allegedly said he would use his contacts to do so in return for a 1.6 million euro bribe, which would be put down in Man Ferrostaal accounts as a “commission”, the German magazine reported.

An Espírito Santo Group company ESCOM is also being investigated in Portugal for being the conduit for allegedly paying such “commissions” to corrupt figures involved in the Submarines Scandal.

In a statement from his solicitors, Jurgen Adolff was reported in various Portuguese and German newspapers over the weekend as saying: “I refute, right now, any of the allegations and disgusting suspicions that have been cast upon me, that I ever deliberately and consciously tried to damage, in any way, the interests of the Portuguese State or have violated duties inherent to my function as Honorary Consul.”

The statement goes on to read: “If as part of this (investigation), there existed some undue payment, it was not with my knowledge, help or consent,” said Jurgen Adolff, who will remain suspended from his post until investigations clear his name.

Married to a German painter, the disgraced Honorary Consul owns a property estate agency that operates in the Algarve and, according to Público daily newspaper, owns a villa in Santa Bárbara de Néxe, near Faro, where it is reported he wants to develop a tourist complex.

According to the same national newspaper, Jurgen Adolff applied many years ago for planning permission to Faro Câmara to build a four star hotel and nine hole golf course in the council.

Faro Mayor Macário Correia has limited comments to the press by stating that the local authority is studying the planning application.

The Submarines Scandal erupted in October last year when two Man Ferrostaal executives, Horst Weretecki and Antje Malinowski, were informed in Lisbon by the press that they had been declared arguidos, or legal suspects, by the Portuguese Public Ministry on suspicion of having defrauded the Portuguese State of 35 million euros and falsifying documents to do with the purchase of two submarines for the Portuguese Navy.

The two suspects claim they were never officially notified of their status at the time and when they were it was through “badly translated legal letters”, which could now, according to their Portuguese lawyers, put the entire prosecution case at risk.

At the heart of the many accusations, which also involve another German Man Ferrostaal executive, Klaus Lesker, who had been arrested and placed in police custody in Germany, as well as Portuguese investigations into seven Portuguese businessmen, are claims that ghost companies and fake contracts were set up in Portugal to hoodwink the Portuguese State over the fulfilment of 1.2 billion euros of compensation investments or ‘offsets’.

Offset contracts are parallel business contracts, but not cash payments, arranged by a winning consortium in large-scale, multi-million euro defence and public works contracts, whereby the consortium promises to provide technological transfer and knowhow and lucrative spinoff contracts for businesses in the purchasing country – in this case Portugal – in return for getting the contract.

It is also suggested that the Honorary Consul may have used his influence with Durão Barroso and other key government figures at the time, including Defence Minister Paulo Portas, to swing the submarines contract in Man Ferrostaal’s favour to the detriment of the Portuguese State.

Now EU Commissioner Durão Barroso has stated in the Portuguese press that he had nothing to do with the submarines deal when he was Prime Minster in 2004.

Paulo Portas gave a press conference last week in which he stated categorically that the choice of the German Submarine Consortium was based on price and technical factors and had been taken on the advice of the Portuguese Navy.