With the arrest of former banker and disgraced Socialist minister Armando Vara comes news that two further Algarve developments are thought to be connected with Portugal’s politically embarrassing Operation Marquês corruption investigation.
To the despair of the PS Socialist Party gunning for a return to power in a crucial election year Marquês continues to reel-in more and more suspects – all of them allegedly linked to the party’s former ‘golden boy’ prime minister José Sócrates, the man who edelivered the country into the hands of the troika in 2011 after two profligate mandates.
As Sócrates approaches his eighth month behind bars in Évora jail, Vara has now joined the “rogues gallery” of names sitting it out under house arrest wearing an electronic bracelet.
Initially, press reports said Vara’s arrest centred on his connection to the catastrophic Vale do Lobo purchase by state-bank Caixa Geral de Depósitos (CGD).
In all, CGD conceded loans to the resort amounting to more than €200 million, as well as buying a 25% share in Vale do Lobo’s capital.
But now it appears there are other two “business deals” involved – both of them in the Algarve.
The first is the so-called “unique and pioneering” Cidade Lacustre project – a controversial scheme that seeks to artificially flood thousands of hectares of agricultural land in order to create a swanky floating “city of the future” – and the second is the Praia Verde development in the Sotovento area around Castro Marim.
As national tabloid Correio da Manhã explains, Vara is understood to have been linked to all these deals during his time as administrator at CGD.
He was nominated to the post by José Sócrates, and is constantly referred to as a “great friend” of the now-jailed former PM.
According to CM, “beyond the more than 200 million euros lent by CGD to Vale do Lobo directors (a ruinous deal for the bank), there are suspicions of negotiations that involved the developments of Praia Grande in Castro Marim, and Cidade Lacustre, in Vilamoura”.
In the first round of questioning by the Public Ministry, Vara is understood to have been accused of taking “commissions” for nodding through all these projects, and as CM elaborates, as the manager of a state bank, such activity could well be constituted ‘passive corruption’.
For anyone watching this investigation as it sends shockwaves through the corridors of power, the echo of comments made at the beginning of last month by octogenarian tourism ‘grandee’ André Jordan should now be deafening.
Jordan wrote that CGD’s investment in Vale do Lobo had ” puzzled the market as it did not correspond with the habitual policy of a State bank.”
With CGD in the form of Vara now allegedly linked to further property deals and speculation, the Resident itself has been approached by an Algarve businessman with more information on apparent “non-habitual” financing.
Our contact, who insisted on remaining anonymous, showed us paperwork alluding to past loans nodded through by administrators working for CGD without backing of the full board (Conselho de Administração).
Far from being non-habitual, he claimed, these kind of old-boy deals appear to have been commonplace.
An investigation by Público newspaper over ten years ago would appear to confirm this. The Sonae-owned newspaper carried an exposé in 2004, explaining that “superior technicians” at CGD realised there were “other loans, to private companies and businesses” that had been made without the correct approval.
For now it is a case of “watch this space”.
Vara, already facing five-years behind bars for his part in the Face Oculta corruption scandal is now due to be questioned as he sits it out in Lisbon forbidden to contact any other of the Marquês “arguidos” (official suspects), and has been described by his lawyer Tiago Rodrigues Bastos as “sad and hurt”.
Mirroring declarations made to newspapers by another key suspect, Vale do Lobo CEO Diogo Gaspar Ferreira, Bastos told newspapers “there was no act of corruption” involved and that his client is “very upset” by the allegations.
Meantime, the implications of Vara’s arrest could have huge repercussions for Vilamoura.
As ionline explained earlier this year when the resort changed hands for €200 million, “various specialists” considered the Cidade Lacustre project was “one of the reasons” for the purchase by American private equity firm Lone Star.
If investigators unearth any kind underhand dealings, could the future of the long-delayed project that has been reviled by environmentalists be affected?
Algarve eco-group Almargem has been against Cidade Lacustre since it was proposed over 15 years ago – calling it “the last act in an environmental tragedy”.
In 2009, the NGO claimed the waterworld by-passed all environmental conditions “on the pretext of being a touristic necessity” and that its creation would “affect one of the most important coastal wetland areas of the Algarve”.
As questions mushroom, news services refer once again to the infamous “submarine contra-deals” and how three of Vale do Lobo’s owners were suspected of having benefitted from these to the tune of €12.3 million.
One of these VdL directors, Hélder Bataglia has already been linked by Marquês investigators to the transfer of €12 million to a Swiss bank account that is said to have been used to channel money to José Sócrates.
Commenting on this week’s developments, CM leader writer Octávio Ribeiro writes that the “detention of Vara is just another necessary step so that Portugal can have a future”, intimating that further high-profile detentions are extremely likely.
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Armando Vara was forced to quit his government post as Minister of Youth and Sport in 2000 over “alleged irregularities”. The case was later archived.
After “the ruinous deal for CGD” in Vale do Lobo, Vara went on to become vice-president of Millennium BCP – from which he was later suspended over allegations that eventually saw him in court charged with the trafficking of influences. The case, Face Oculta, saw a slew of guilty verdicts – Vara’s being one of them.
Currently appealing his five-year prison sentence, Vara has always maintained his innocence.
