Video proves payment of bribes to Portuguese minister in Freeport Case

Video proves payment of bribes to Portuguese minister in Freeport Case


by: Felícia Cabrita

A video recording of the conversation between an English member of the board of the firm that owns Freeport and a partner from consulting firm Smith & Pedro mentions the payment of bribes to a Portuguese minister. This is a new episode of the case that was started last week

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.

(the rest of the article will be available in tomorrow’s paper edition)

source: SOL, 16.01.2009

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by astro

Wats the link back to the Macs?

Standing Tall wrote:Wats the link back to the Macs?

there must be a reason for PT PM help so much UK PM

Could be because of Freeport case or not!

i never read nothing that gave me 100% sure of that!

pm wrote:

Standing Tall wrote:Wats the link back to the Macs?

there must be a reason for PT PM help so much UK PM

Could be because of Freeport case or not!

i never read nothing that gave me 100% sure of that!

So it could be you scratch my back and i'll scratch yours?

Dogwood wrote:

pm wrote:

Standing Tall wrote:Wats the link back to the Macs?

there must be a reason for PT PM help so much UK PM

Could be because of Freeport case or not!

i never read nothing that gave me 100% sure of that!

So it could be you scratch my back and i'll scratch yours?

Could be but at this moment i think is only rumours! or a coincidence!

but time will answer our doubts!

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




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by astro

Ok well this is very interesting as we now have names and it will be interesting to follow this case just to see if any names have croipped up in the past with the Mccann case....

Paula who is João Cabral? His name rings a bell!

Ambersuz wrote:Ok well this is very interesting as we now have names and it will be interesting to follow this case just to see if any names have croipped up in the past with the Mccann case....

Paula who is João Cabral? His name rings a bell!

My husband but i can sure you that he is not involved on this!