In 2006, Prime Minister, José Sócrates, learned of an investment project through Hélder Bataglia, for the purchase of the luxury Vale do Lobo development in the Algarve.
The project relied on bank financing because potential investors wanted to use as little equity as possible and the initial amount was very high – around €230 million – and the value of the project could change if changes were made to land use zoning which would limit the possibility of building in areas where building already had started.
At that time, Armando Vara was a director of Caixa Geral de Depósitos (CGD), appointed by his friend, José Sócrates.
Vara spoke to Socrates about the possibility of CGD financing, taking into account the high amount needed and the need for the bank to take a share in the company, because private investors were already willing to stump up €5 million to €6 million, and in addition to the initial loan, further financing would be necessary for the development of the project.
Vara therefore conveyed to José Sócrates that if CGD did the financing, investors Diogo Ferreira and Rui Horta e Costa were willing to pay a fee, which would be shared between Vara and Sócrates.
The Portuguese State is CGD’s sole shareholder, represented by José Sócrates who informed Vara that he would support the investment politically as he could say the deal was to ‘support Portuguese investors.’ In exchange, he would receive a bung.
Armando Vara would lead the process of granting CGD financing, even though this was a highly risky venture. It would also be up to Vara to make the contacts with the investors, to define the amount payable to himself and Sócrates and arrange the date of payment.
The initial financing for the purchase of Vale do Lobo was formalized in December 2006. CGD lent €196 million and bought into the company with €28 million of CGD cash.
2007 and 2008
During the following year, always with the intervention of Armando Vara, CGD approved new financing for Vale do Lobo Group companies to the tune of €60 million.
In August 2007, the Sócrates government approved amendment to the Regional Plan for Territorial Planning for the Algarve (PROTAL), where it construction plots were safeguarded, thus protecting the business.
At the end of the year, Vara told Sócrates that it was time to share the bung of €2 million and it was necessary to work out how the money would reach them. They agreed to ask Carlos Santos Silva for help in order to use Swiss bank accounts and to find a third person who could serve as a decoy when the money was transferred.
They decided to use the Lena Group, through accounts held by Joaquim Barroca, to the offshore companies Giffard and Belino. Santos Silva convinced Barroca to receive a transfer and to pass the money to the account of Santos Silva.
Joaquim Barroca accepted, so Carlos Santos Silva gave Armando Vara the account number to which the transfer was to be made and Vara gave this information to Diogo Gaspar Ferreira.
The businessman already had a plan to get the money to Switzerland: he used a Dutchman named Jeroen Van Dooren, who bought a plot of land in Vale do Lobo and had agreed to pay part in cash without declaring it in the escritura.
On January 16 and April 4, 2008, Van Dooren transfers a total of €2 million to Joaquim Barroca’s account in Switzerland. One million went to the account of Giffard on February 19th. The other million was transferred to Vara offshore account that he had run with his daughter, Barbara Vara.
José Sócrates denies all the charges laid against him in Operation Marquês, with his lawyer, João Araújo, saying he would fight the charges contained in the indictment issued on October 11th after a four year investigation.
News courtesey of http://algarvedailynews.com/news