Jardim steps down, 2014 in review

Jardim resigned as head of the Regional Government on the 12th of January, following internal elections won by the former mayor of Funchal, Miguel Albuquerque. The latter beat Jardim's appointed successor, Miguel António Correia, in the second round of elections.

2014 was rather depressing. Not only was the Cuba Livre hidden debt investigation shelved by the prosecutor, despite having found that the debt was deliberately hidden. Nobody was held accountable, which is typical of the Public Prosecution in Portugal.

The eight PND activists accused in the protest held in the Jornal da Madeira were convicted. The judge, Joanna Dias, known to be pro-regime even noted that it was not proved that the Jornal is not impartial - when even the candidates to the leadership of the PSD were publicly protesting its being an instrument of Jardim. The judgement is being appealled.

In the light of the judgement, the PND put in a request that the cases brought against the Jornal for election violations be speeded up. Two weeks later they were all shelved with absolutely absurd premises. Such as that the newspaper was not responsible for opinion pieces, ignoring the fact that all the opinion peices were written by Jardim's party members and there was no pluralism of opinion whatsoever. In one case the prosecutor even ignored completely two decisions of the Constitutional Court taken before the elections, which the Jornal chose to ignore. We appealed both.In the first case, the judge maintained the Public Prosecutor's view; in the second, the one with the two decisions of the Constitutional Court, the judge has remained silent...

Gil Canha and I were also convicted in the lower court in two libel cases brought against the Garajau over the Ports case.  Last year, however, the Supreme Court acquitted the Sol newspaper, against which the Ports had brought an action against an article which covered most of the same material. As our lawyer pointed out, the jurisprudence is shifting from the Courts protecting the powerful, to protecting the right to criticise, even if the criticisms are unpleasant.

In Court the accusation lawyer made much of his friendship with Cristina Pedra and that she had been appointed advisor to the Court, such was her fantastic reputation. He centered his attack on the fact we were convinced that criminal accusations would result of the investigation, which turned out not to be the case. Our lawyer then proceeded through all the scams the company had made, that despite not being criminal, due to the nature of the company, meant that perhaps Cristina Pedra may not be held up to be the saint she was being portrayed as being, but rather as an ordinary mortal. He noted the political controversy over the ports monopoly, which still exists to this day, and the political role of the Government in maintaining the system, and the sale of its quota of the company soon after the facts which were subject of the investigation became public.

Jornal Trial Over

Selfie of the accused with lawyer on the steps of the Court

The trial of the protest against the Jornal's continued violation of the election laws finished last week. The judgement is due on the 24th.

None of the cases brought against the Jornal by the National Comission of Elections has yet reached Court.

The last few months have been taken up with a marathon of court trials brought by the Jornal and the Ports, which are not quite finished. They resume in September

Ports Monopoly Discussed with EuroMPs

Last week I had occasion to attend a most interesting meeting held by the Madeira Chamber of Commerce, ACIF, at the City Hall: an event where local businessmen would have the opportunity to meet with and brief a group of EuroMPs of the Commission of Transport and Tourism, among whom were Nuno Teixeira, João Ferreira (Communist Party), Mathieu Grosch, EPP, Belgium and Zita Gourmai, Socialists, Hungary.

Towards the end of the meeting, I briefed the MEPs on the ports monopoly (in English so as not to tire the translators): that we are dependent on the ports for 80% of what we consume; that they are one of the most expensive ports in Europe, thanks to the Sousa monopoly; that the government receives not a cent from this operation and that despite Government claims to the contrary, the ports operation was a de facto monopoly.

Step forward Duarte Rodrigues, former President of the ACiF in the defense of the Sousa group, saying  that there was no monopoly, that the Ports operations were open to any company that wished to license itself…

"I was the former ports director and I resigned due to the way the Port restructuring was carried out", said the next speaker, Menezes Vasconcellos. "We ended up with a single operator and the most expensive port in the country. I was so disgusted that I brought over a large firm from the mainland to compete in the Madeira ports, but after five years of trying to get a license it became obvious that it was simply not possible!"

Up spoke the President of ACIF, Cristina Pedra, to say that none of this was at all true and that the only problem was the smallness of the market which left no margin for a second operator and tended to put off any newcomers. ..
She neglected to inform those present that according to the police investigation, her family has (or had) a stake in the Ports monopoly through and Offshore company; that her father was the trade union representative and administrator at the company that supplied the labour for the Ports operation, of which the Sousas were also shareholders; that a whole series of family companies were suppliers to this same company, and so on and so forth...

The Ports Monopoly Discussed in Parliament

The Socialist Party proposal for getting rid of the Sousa Group ports monopoly was discussed in Parliament yesterday but its discussion was put off by Jardim's party.

According to the CDS, the Sousas have been operating on a temporary license for nineteen years. All parties were against the fact the Sousas pay the Government, and therefore the region, NOTHING in return for the use of the license to operate using the ports facilities and infra-structure. This while practicing some of the highest prices in Europe, if not in the world.

Even the PSD, in the person of Jaime Filipe Ramos, who sits two chairs away from his daddy, the party's parliamentary leader, recognized that the current arrangement must be changed and that an alternative is being drafted by the Government. By whom and for when we do not know, but it was more than obvious that this news had a nauseating effect on Miguel de Sousa, whose face dropped to the floor.

Miguel de Sousa, a PSD backbencher is cousin of the Ports Monopoly Sousas, and also Jardim's latest challenger. Sousa is a more discreet and sophisticated operator than the Ramos clan, and those connected to him have been very nicely rewarded. Apart from his cousins who secured the Ports Monopoly, Sousa was also instrumental in setting up the 30 year concession for the running of the Madeira 'offshore' which was secured by the Pestana Group (again without public tender,)…of whom he is a business partner.

Since the construction sector, which was the main dominion of the Ramos family, has dried up, they now look on the ever-flourishing Sousa family with a distinctly less benevolent eye.

Quinta do Lorde Saga

The storm over middle eastern investors pulling out of the mega-investment, Quinta do Lorde, is abating.

The Quinta do Lorde resort is a huge resort built in a Natura 2000 nature reserve, according to legislation adopted by EU governments in 1992 to protect the most seriously threatened habitats.

The land was originally site of a house built by Lord Shrewsbury, but which he never got to inhabit. After years of disinterest, and with very limited development possibilities it was bought by Ricardo Sousa, for next to nothing. But, as usual, once it belonged to the 'right' people all restrictions melted; the sky was the limit.

However, as usual, the plans were contested by environmental NGOs and activists. In 2008, Gil Canha, (now recently elected city councilor to Funchal), presented a denunciation to the Public Prosecutor's Office. A year later, when nothing had happened he put in an injunction against the development. The judge, despite admitting there were indications of illegality, determined not to defer the injunction because of the economic consequences the promoters of the project would suffer. The main case was duly filed but only recently registered.

In the meantime, the project had run into financial difficulties and ground to a halt several times. The banks sought for new investors and eventually found a consortium of middle eastern investors who duly began to pour in much needed money. However, they were apparently never informed of the pending court case and of its consequences - in Spain the  Marina Isla de Valdecañas resort, also built in a Rede Natura 2000 reserve was ordered demolished by the Supreme Court. 

Contacted by the consortium, Gil Canha showed willingness to drop the case (Portuguese Justice is no match for Spanish justice and the effects of demolishing the project could not undo the damage) in return for the fulfillment of some environmental demands, such as public access tot the beachfront  - but nothing doing until the Sousas stopped persecuting him and others (including myself) through court cases. 

The Sousas then orchestrated several workers demonstrations in front of Funchal City Hall calling for Canha to step down for causing the loss of their jobs. Their actions failed to carry public opinion. 

The Sousa Group are incidentally shareholders of the company contracted by the previous executive of Funchal City to draw up its new city plan and regulations!

Ports Case 7 - Journeys billed to the ETP

The Police report, under the above heading says:

In effect, the ETP requested the services of the said travel agency, for journeys, car rentals and hotel stays, which despite being entirely paid by the ETP, were either partially used or used for private ends. The remaining values were credited to David Pedra or to the company belonging to the President of the Free Trade Union of Loaders and Unloaders, José Manuel de Freitas (Freitas e Célia)...

When questioned, Ricardo Jorge Ferreira de Jesus an ex employee of the Pateo Agency, said that effectively, following instructions of David Pedra and of the employee Noelia, they emitted bills to the ETP for services never rendered (journeys, hotel stays and car rentals), the cost of which were later credited to a current account opened in the name of David Pedra, for private use....

The current account of Freitas e Célia, the company beloning to José Manuel Freitas, and his wife, were credited with values of bills paid by the ETP.

It was also found that the companies Freitas e Célia, Pedra e Costa, Gest Lider, Soft Leader and the Stevedores Trade Union requested the emission of bills for services never rendered, and which were later used by the shareholders of the mentioned firms for private ends...

By way of example, the Management of the Meridian Park Porto Hotel was asked to inform the police whether on the dates from 18 to the 23rd of August 2002, José Manuel Freitas and , José Manuel Abreu dos Santos, president s of the two trade unions, had stayed at the hotel, according to bill nº 411 of the Pateo Agency. According to the Hotel, these persons were not registered as guests on those days.

Therefore, no doubts remain that this was one of the bills paid by the ETP for journeys not made, and whose cost reverted to other ends.

José Manuel Freitas denied everything.

This section of the report concludes that given the complexity of the investigation and due to some of the facts pertaining to a period which exceeds the timeframe of the investigation, the police suggest that all the relevant facts should be extracted for a separate evaluation. Given that the companies Gest Lider, Pedra e Costa and Freitas e Célia used the same strategy, the facts of the investigation should be sent the Regional Tax Office.

Port's Case 6. Twenty Five Trade Unions signed petition against the Stevedore's Union

Following the denunciations of the temporary workers, 25 Trade Unions signed a petition on the situation of the temporary workers:

The Stevedores Trade Unions "do not defend the temporary workers of the Funchal Port", it read. They condemned the fact that the temporary workers work for over two hundred days a year in the ports (some for over seven years) but have no permanent status. They also repudiate the fact that the worker's canteen was transformed into a restaurant exploited by a company belonging to one of the trade union leaders.

Among the 25 trade unions signatory to the petition, made public in July 2001 were:
The Union of Journalists; Teachers; Hotel Workers; Construction Workers; Office and Commerce Workers; Embroideries Industry Workers; Bankers; Post Office and Telecomunications; Justice employees; Food and Beveridge Workers; Metalworkers; Local Administration Workers; Pharmaceutical workers and others

Ports Case 5 - The Police investigation into the Temporary Workers' Denunciations

The Analytical Unit of the Public Prosecutor, resuming the Police investigation on Pedra's use of temporary workers paid for by the ETP at family homes, wrote:

According to the final Police report, all the debit notes say ‘payments of Mr. David Mendes Fernandes Pedra…”, from it can be deducted that these debit notes do not clearly and adequately discriminate what was being debited (identifying the workers used, the date and work hours, the place where the work occurred and the nature of the work), nor are they accompanied by supporting documentation justifying the amounts (showing the value incorportated the worker’s salary and social obligations supported by the ETP/RAM, namely, Social Security, insurance and the holiday and Christmas subsidies) going counter to bookkeeping rules, internal control procedures and accounting principles generally accepted and consigned both in fiscal law and in the Official Accounting Plan.

In our opinion, this evident debility in administrative procedures must have been intentional, since it appears inadmissible that the ETP/RAM does not prove the amounts attributed to that administrator, arising from the use of the labour of the temporary port workers for self-benefit or benefit of family.  Indeed, according to what was ascertained by the Police in its questioning, its seems one can conclude there was excessive concentration of functions both in respect to David Pedra, and to his daughter Cristina Pedra, who were after all the main beneficiaries of the labour used in their houses and apartments.

On the other hand, despite the searches made of the ETP installations, the Police refer that no temporary workers work contracts were found, relating their disappearance with the intentional acts denounced by some of these workers, according to whom many office papers were burned at the house of the administrator, David Pedra. The inexistence of these contracts, as well as other necessary information, namely the daily work control sheets, the itinerary sheets and the distribution of the workers per ship make it impossible to investigate the value of the amounts paid by the ETP to the temporary workers for tasks other than port work.

The report concludes:

Independently of it not being possible to confirm if that amount corresponded to the total disbursed by the ETP in wages and related costs for the diverted workers, and even if it had been, there is still at stake the abusive and illegitimate appropriation of the ETP’s monetary resources, and the financial costs of these ‘advances’ for a considerable period of time, and for which the ETP was only compensated on the 26^th of June, 2001;   

According to the telephone taps transcribed in the attatchments, it is proven that this administrator continued to use the temporary workers even after this investigation got under way, given that in the telefone conversations he gave instructions to the office staff (Paulo Matos and Ricardo Freitas) to swap personnel and to get temporary workers to work, both in his house and that of his daughter, and indicating that those people who had been working there, be placed in the ports in order to settle accounts.

The Ports Case 4 - The Temporary Workers’ Denunciations

There were two types of stevedores employed by the ETP and OPM: the full time workers who belonged to the trade unions and the temporary workers, whose pay was inferior and who did not enjoy the same rights and privileges. Trade Union filiation was restricted. Although the temporary workers were taken on with daily contracts, they were in fact indispensible to the functioning of the ports, given also that many of the unionized workers were often on sick leave.

In June 2001, some of the temporary workers publicly denounced that they were being hired to work for the ETP at the private residence of David Pedra, the trade union representative in the ETP, at the house of his daughter, Cristina Pedra, who also worked for the ETP, and at the installations of the OPM. Their work consisted in painting and repairing installations and even menial household chores such as waiting at table and mowing the lawn. They claimed they were being paid by the ETP (of which the Government was a shareholder) to work for the private benefit of the Pedra family and others.

Confronted by the Diário, David Pedra peremptorily denied that this work was being paid by the ETP. He claimed he was being victim of persecution. The following day, Luis Miguel Sousa, boss of the OPM maintained that no port workers had been used for other purposes outside the port and threatened a libel suit.

The Police investigation confirmed the denunciations of the temporary workers. Further, it was shown that the workers had been paid for the ETP for private use and that David Pedra, after the denunciations had become public had passed a cheque to the ETP to cover the use of the temporary workers at his home and that of his daughter and others. The debit notes for this work were numbered sequentially and on the bottom left hand side had the designation “AGMOP/RAM” an entity which had ceased to exist in 1994, six years previously.

Ports Case 3 - Government non-supervision

"The Madeira Chamber of Commerce, ACIF", according to the Police Report (p1284), "carried out a study, whose main conclsuions, made public in 2001, indicate that 'the Port of Funchal was, substancially, the most expensive of Portugal (and even generally in Europe.)'"

The Analytical Unit of the Public Prosecutor's Office (NAT), relating to Government Supervision states:

Since the competitiveness of the ports is of strategic importance to the national economy, namely in what concerns port operations, the activity of offering services of cargo movement to the public, carried out by OPM, is considered to be of public interest, meaning that this company is especially obliged to "cooperate in the establishment of technical and administrative means to improve the port services, in terms of optimising costs and price transparency,---" (paragraph d) nº2, article 19 of the Decree Law 298/93, which established the legal regime of the ports operations.

In this context, and taking into consideration the powers of the ports authority, the NAT suggested that an information request be made to the APRAM - Administration of the Portso fo the Autonomous Region of Madeira, S.A., to clarify the way in which this entity exerted the power attributed to it of oversight and supervision and what guidelines may have been established, for the ETP and OPM, in terms of prices charged. In its answer, the APRAM merely recognised that, during the period considered in this investigation, "it had no intervention, nor did it set any guidelines on the matter of prices charged for the services rendered by the ERP/RAM or the OPM."

In this way, faced with the absence of the regulating and supervision role of the ports authority, and the OPM being the only stowage company operating tn the Ports of Madeira, the absence of competition has contributed to the prices that it is free to practice being the highest in Portugal, according to the comparative study of the ACIF.

 

 

Ports Case - 2. ETP, the non-profit profitable company

The key player in the Ports operation is the company ETP (whose precursor was AGMOP). This at the time was a tripartite company whose shareholdres were the Stevedores Trade Union, the Regional Government and the OPM, which belonged to the Sousa Group.

The ETP was a NON Profit company which supplied the manpower to the OPM for the ports operation. .
Despite its non-profit status, according to the police report the ETP was nicely profitable (p.1288):

"During the period analysed (1998/2001) ETP charged its only client [OPM] 4.012.440.134$00 for the supply of labour, to which can be added debit notes to the amount of 10.650.000$00.

The ETP is a juridical entity which exercises a non-profit activity.

During this period the ETP had manpower costs of 2.358.119.469$00, social security and other costs costs of 488.774.785$00, and accident insurances worth 270.034.37$00, which allowed it to have a PROFIT of 895.511.510$00. (...)

From the research carried out it can be concluded that the costs of the ETP do not justify the high prices being practiced for the supply of manpower. Note that these profits would be far higher, if it were not for the advice costs born by the ETP, charged by other entities previously mentioned [i.e. other companies belonging to the administrators of the ETP and the Sousa Group]." 

We will get back to these other charges later. 



  

Ports Case - 1. The Ports Monopoly

In 1995, the Publico reported on the Ports Monopoly:

"in the next phase, already with Ricardo Sousa heading the ENM, the strategy of the [Sousa] Group turned to the Funchal port operation, an crucial area for controlling the sector and supplying the arquipelago. Through deals established with the trade unuions of the carriers and stevedors and with the Regional Government, the firm Operações Portuárias da Madeira Lda (OPM) became...the only private company working in the port.

Gradually, and always with the support of the Regional Government and the two trade unions - whose presidents drive BMWs and Mercedes, despite the organizations having only a few tens of members, the OPM rose, very soon, to a status that was contested by the port users and the Regional Ports Directorate. A statute that attributed to it a unique and particularly attractive privilege: the possibility to manage the port operation according to its own interests in the area of maritime transport.

In practice, accuse the former and current competitors of the OPM and the Sousa brothers, the control of the port operation allows them to have "a hold" over all those who manifest an interest in entering the market and to "squash" them.

'This is all mined by very influential people. The best is not to make waves. I don't understand if I'm in Calábria or South America", states a high employee of one of the three companies that compete with the ENM in the transport of goods between the continent and Madeira.

'We are witnessing the emergence of an octopus which spreads its tentacles of all that is maritime in Funchal', says Fernando Oliveira, president of the National Trade Union  of the Port Administration Workers, based in Lisbon. "In default of the law and of public interest, the port is being operated in an opaque way, which privileges one private firm and the stevedore's trade unions', added the same trade unionist.

One of the companies more frequently identified as a victim of the particularities of the Funchal port is João Silvério Pires - who until the end of 1992 operated the transport of passengers and goods between Funchal and Porto Santo. The methods allegedly used against it, say various port employees, went from the "massacre" by the overseeing authorities, to the charging of "absurd" rates and tributes, and to 'all manner of obstacles' to the unloading of goods in Funchal'...."

A decade later, the Investigative Police Report confirmed the obstacles to free competition:

It should be stressed that article 28 of the statutes of the AGMOP, resulting from the partial alteration of the statutes, carried out in 14-09-93, when MT was trying to enter the market of the port operations, practically blocks the entry of any new port operators.

2014 A year of trials

The year 2014 is for me the year for Justice because it is also a year of trials.

Despite this end-of-regime decadence when even Bertie's top party members are dissenting and denouncing persecution, election-rigging, and funniest of all, that the PSD has become one-man-show, the Justice system has suddenly seen fit to finish all the remaining Garajau cases in one go. Don't get me wrong, I find it fantastic that the Justice system is getting its act together - I only object to its one-sidedness. The corruption cases and cases of election violations etc remain on the back burner, with no signs of moving ahead. The libel cases against those who denounce what's wrong (the word corruption cannot be used in Portugal since such a thing does not exist in this country) move speedily towards conclusion.

As I was saying all the remaining cases of the Garajau are to reach a conclusion this year. By last year, of the dozens and dozens of criminal complaints against the Garajau, only eight remained. And if anyone was wondering why this blog had been rather silent of late, the reason is that we had eight overlapping trials set start between the November 2013 and February this year. All the remaining eight cases were to go on trial within a four-month period! The justice system is busy with us!

Of these eight, two have been disposed of. Of the six remaining ones, four have been moved by the ports monopoly. Three of these cases pertain to the same factual matter and, cumulatively, a compensation of five hundred and fifty Euros in damages is being asked… for a satirical newspaper with an edition of 1500, less than half of which sold. Such hefty compensations are very dissuasive  indeed and the fact is that the ports have since largely been left to their own devices, both by regional and national papers. But the insistence to prosecute has lead me to take up the matter again, and look into the justice system's follow-up to the ports investigation, which is proving rather interesting.

Since I have decided that I will devote this year to writing about Justice rather than politics, I will be doing a review of the ports case and other such investigations, while simultaneously relating the developments in the various trials.