Lawyers acting for the former Chief Executive of Banco Espírito Santo, Ricardo Salgado, have delivered a report which accused the Bank of Portugal’s governor of having an aura that gives him an "absolute immunity" regardless of any "mistakes and sins," and which allowed the supervisor to conduct the BES rescue process "negligently and partially."
In a case with overtones of 'pot and kettle' the accusations against the Bank of Portugal's governor included several instances where Carlos Costa had fouled up, yet seemed always to have an ‘aura of immunity.’
The observations, at which even some of Salgado’s critics may grudgingly nod in agreement, are contained in a suitable weighty 432 page document issued by the law firm Uría Menéndez-Proença de Carvalho and delivered to the regulator in defence of their illustrious client.
"What a privilege!" reads one section, describing how this mysterious 'aura' allowed the Bank of Portugal’s governor to do much as he wanted without sanction, adding with a degree of regret that "Dr. Ricardo Salgado has no such 'aura' to protect him but he has reason on his side."
"We know that there is a kind of 'aura' that confers absolute immunity on the Bank of Portugal, regardless of all its mistakes during the storms occurring in the Portuguese financial system - and there have been many. The bad guys are always the bankers and the good guys are always the 'police' " reads the document.
It seems clear that Salgado’s line of defence will be to attack Carlos Costa, with much justifiable reason, and claim that BES was still viable but for the late and incompetent interference by the Bank of Portugal which in his opinion drove the bank into the ground.
"The death of BES did not result from any action or omission by Dr. Ricardo Salgado, or indeed any of those targeted in this process."
The defence document asks us to believe that Salgado acted in "good faith" and it was the Bank of Portugal that was beset by "ruinous management" and hence Salgado should not be prosecuted for anything at all.
"What happened in the summer of 2014 that ended BES shames the democratic rule of law and should shame the great institution of the Bank of Portugal," reads the lawyers’ Churchillian submission.
More controversially, the document suggests that Carlos Costa’s reward for successfully sinking BES was to have his contract at the Bank of Portugal renewed for five years, and it hints that in the future Costa may become the head of the European Central Bank" s further reward.
432 pages of blaming someone else's mysterious aura may not be the most skillful defence known to man but the Bank of Portugal's Carlos Costa has not helped himself by displaying U-turn skills and buck-passing expertise not seen in public life for many years.
Costa certainly has the protection of Prime Minister Pedro Passos Coelho and Finace Minister Maria Luis Albuquerque both of whom successfully have remained hidden using the 'no comment on current cases' excuse.
The governor's next big test will be the sale of Novo Banco, more to the point, the price he achieves for the bank which needs to be sold for a minimum of €4.9 billion to repay the unwitting largesse of the taxpayer and the forced generosity of the country's high street banks.
