124. Re: Banco Espirito Santo

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[Blogger's Note: The following was sent me by a friend living in Portugal.] 

Dear Editor,

In May 2011 judge Carlos Alexandre led a team of magistrates, police and investigators from the Bank of Portugal in a raid on the Lisbon offices of the LCF Rothschild Group. IT systems were confiscated which allegedly contained the highly confidential details of the bank´s business in Portugal – then  assessed as being with assets exceeding a billion Euros held by a small number of important but unidentified customers. The grounds for this intrusion were the suspicions of money-laundering and fiscal fraud.   

As the Rothschild Group is one of the financial world´s most powerful and secretive institutions with influence in the highest echelons of government, it is not surprising that the investigation was discontinued after a few days with a declaration by the bank that it was innocent of such accusations but was assisting with enquiries into the activities of only two of its anonymous customers.

Three years later, rumblings began in the international media concerning the “financial stability” of Banco Espirito Santo and grew to a crescendo of accusations of impending collapse due to fiscal fraud.     The protagonist in this drama, Ricardo Salgado, is now accused of leading his clan (holders of only a 20% shareholding in BES but who regarded it as a fiefdom) in a rampage of illegal transfers to companies and associates in off-shore locations. The extent of this secretive criminality is difficult to gauge but it is believed that there are more skeletons to be found in the  vaults and this will vastly increase the indebtedness which the government is now trying to cover by assembling and injecting funds of around five billion Euros into a New Bank which will hold the good assets while leaving the bad assets as the negative equity of the existing shareholders.

Thus we are presented with a repetition of the events which have caused so much anguish since the (intentional) collapse of Lehmann brothers in 2008 and later the scandal of Banco Português de Negócias. Nothing has been learned. The banksters have paid fines which are derisory in comparison to the huge profits which have been squirreled away and they continue to exploit the unregulated system which dates from the “Big Bang” of the Thatcher years. It is business as usual and will continue as such while we have a revolving doors system of bankers changing their roles to being or supporting  the politicians and the regulators who form our elitist governments.

Free market capitalism will continue to enrich the privileged 10% who own 85% of the economy until such time as courageous democratic socialists enforce a regulatory system staffed by conscientious and highly paid civil servants who will nip in the bud such dreadful excesses of the autocratic super-class.

Truly,  Robert Knight, Tomar