The so-called “BES case” turned into a legal monster, involving hundreds of people, multiple entities, multiple geographies, we knew it was unlikely to be a quick process. But the trial starting 10 years after the Bank’s resolution raises a question: whatever the decision, will it be in time to bring justice?
Criminal Law teaches that punishment has, essentially, two purposes: Retribution, inspired by Absolute Theories, where guilt is the measure of the penalty, in a logic of pure punishment, and Prevention and Reintegration, based on Relative Theories. From this last perspective, the penalty is justified by the intimidation of society in relation to the violation of the law, a deterrent effect, and by providing the offender with the possibility of repenting, correcting and resocializing.
If we focus on the main defendant, Dr. Ricardo Salgado, we hardly identified any possibility of achieving these ends. Can an 80-year-old person, with a degenerative disease that severely affects cognitive ability, serve a sentence that punishes him for what he doesn’t remember?
Does any prospect of rehabilitating, or resocializing, a person with a degenerative disease, in degree 2 severity, which will not reverse itself and will tend to worsen, make sense?
From a criminal point of view it is legal absurdity. A true fraud against the Law, considering it for its purposes. The defendant’s inability to defend himself at a hearing is particularly serious, as he does not have control over his will and is cognitively impaired, what he says cannot be considered. Without contradiction, the validation of the proof is jeopardized.
From a civil point of view, we could argue that the ongoing trial could help to facilitate compensation for injured parties. Guilt established in criminal proceedings leads to the same facts being presumed as proven in civil proceedings, being rebuttable by the other party, but assuming the burden of proof.
However, the time that separates the beginning of the investigation and the beginning of the hearing and trial, 10 years, allowed the deterioration and dissipation of many of the assets that could respond to the responsibilities.
The option adopted by the Bank of Portugal in 2014, accompanied by the Government, the Bank Resolution, was both innovative and ineffective. The division between Banco Bom and Banco Mau served to excuse many defaulters, to sell at a bargain price, assets that constituted a considerable collection of the Espírito Santo Group.
The areas of tourism, insurance and health are the best example of this. Critical sectors of the economy where GES presented clear competitive advantages were dismantled and sold at retail, well below market value.
At the bank, which succeeded BES, inheriting assets and responsibilities, operations that question the rationale behind decisions and, above all, the safeguarding of the Bank’s interests have also been publicly known.
Even recently, as it is football and one of the big three in Portuguese football, operations were public in which the Bank sold assets at a 70% discount, assets that would automatically convert into capital in less than two years.
The discounted sale of Debentures, curiously rewarding default, is a visible example of many other similar operations. The Club/SAD is in one of its best periods, SAD presented a net profit of 12 million in the last year, the sporting asset has appreciated in value by more than 300 million euros in the last 6 years, it has a solid financial structure, Why did Novo Banco sell the debentures at a 70% discount?
We know that this is a small example, made public because it is football, but there will be many more, where the Bank sold assets of great value in balance. We know well that after the sale of the Bank to Lone Star, in 2017, the revenue from the assets would not go towards compensating the injured parties, but it says a lot about the criteria that were in the division between “Good Bank” and “Bad Bank”.
The time that has passed has benefited many, it has benefited debtors more than creditors. All to the detriment of justice, penalizing those who were truly harmed by the Bank’s Resolution.
It was said, in café jargon, that after the resolution the bank became an open bar. Everything was done, everything was allowed because the blame would always end with Dr. Salty.
Each year that passed represented another year of opportunities for those who stayed at the “Banco Bom” and one less year of hope for those who stayed at the “Banco Banco”.
The complexity of the process cannot explain the 10 year gap between the beginning of the investigation and the Trial.
It is too long a period of time to do justice, to compensate those who were harmed, to punish those who committed wrongdoing and, especially harshly, for those who were involved through no fault of their own. Justice out of time is not justice, it allows the public square to prevail over the courts, it judges everyone without proof, it punishes offenders and the innocent equally.
