Portugal’s entry in the EuroFiscal Corruption Contest is a more modest affair than Spain’s. It centres round a simple fact, which I picked up a few days ago from Bloomberg, that

Isabel dos Santos, the daughter of Angola’s president, is the biggest shareholder in Portuguese cable-television company Zon Multimedia (ZON) SGPS SA, and holds 19 percent of Portuguese lender Banco BPI SA. (BPI)

On the surface it’s an innocent sentence. Someone owns a chunk of a bank. Except that 1) the person is the daughter of the man who has been ‘President’ of Angola since 1979, during which time he and his family have amassed a business empire currently estimated to be worth at least €1.5 billion, while the people of Angola live in poverty despite the billions in revenue from Angola’s Oil and other mineral riches, and 2) the bank she owns 19% of is about to get a €1.5 billion bail out from the Portuguese tax payer.

A word about Angola’s oil revenue. It was reported by Human Rights Watch and has subsequently been admitted by the Angolan government, that $32 billion in oil revenue ( a third of Angola’s GDP) has gone missing and cannot be accounted for. Though a clue of what might have happened comes from a 2010 US senate report into corruption and money laundering which found that ,

“Aguinaldo Jaime, who served as the governor of the Angolan Central Bank from 1999 to 2002… initiated a series of suspicious US$ 50 million transactions with US banks. For each attempt, the banks, concerned about the likelihood of fraud, ultimately rejected the transfer or returned the money shortly after receiving it. During Mr Jaime’s three-year tenure as central bank governor, the government could not account for approximately US$ 2.4 billion.”

The fact is that Angola is a corrupt country and Isabel dos Santos’s father has presided over it for over thirty years. During which time he and his daughters have become personally very wealthy while the Angolan people are still malnourished.

Now perhaps I’ve led a sheltered life, but something about Portuguese tax payers bailing out the daughter of the President of Angola, especially given the reality of Angola, strikes me as perverse if not outrageous. And let’s be clear this is what is happening. The bank, a private business, has got itself in deep trouble and would go bankrupt which would ruin its owners. Except that the Portuguese government has decided to force the Portuguese tax payers to put €1.5 billion of their money in to the bank so that it can remain profitable for its owners. I put it like that because…that is actually how it is. Banks can and often do go bankrupt without the depositors being effected. Bankers and politicians will always warn of the risks to ordinary people but it is their own wealth and power that they are really looking out for. Hundreds of banks have gone bankrupt in America for example and none of the depositors have lost a cent. When banks go bankrupt the people who use the bank are protected. They go in and out as usual. But the owners, the share holders, lose everything. As do the bond holders starting with the most junior and working up to the most senior, each losing their money until the banks’ debts are paid off. That is how it should be. ‘Saving’ banks is about protecting the owners, the bond holders and those politicians whose power and prestige is aligned with that of the owners, and very often also tied into the bad deals which brought the bank to its knees in the first place.

The point is this, if any citizen of Europe, or any ordinary person, were to walk in to Banco BPI (the bank in question) and try to deposit €10 000 in cash that transaction would be reported to the Central bank under international anti money-laundering regulations. If the central bank had suspicions they would in turn alert the relevant police authorities. But, it seems, if the daughter of the President of Angola walks in with 50 million euros, which is what her initial stake in Banco BPI cost, no one thinks to ask where that money came from.

For ordinary people ‘Where did you get the money’ is the question that the law says must be answered. For the scions of the global elite it is the question that is never asked. Which bothers me. Remind me again why ordinary people must respect and obey the law? Just run by me the philosophical justification please, for I feel it slipping away from me.

The Portuguese bank authorities should have asked if Isobel dos Santos was a fit and proper person to own a controlling stake in a Portuguese bank. Would anyone think it fine for Al Capone to own a bank? Why not? Because he was a gangster who stole the money he was spending? Of course, you could say Al Capone was a criminal whereas we have no proof that Isobel or her father are criminals. Her father is the president for goodness sake. Yes quite! That is what bothers me. You see I somehow doubt the €50 million she invested in Banko BPI, is covered by the President of Angola’s salary. Or is it just a standard thing that all daughters of presidents own 20% of a bank?

Time to take a step back and look more closely at Isobel and the dos Santos financial empire.

In fact Isabel owns stakes in three banks not one and may, as far as I can see, have a stake in at least two others, Banco Espirito Santo and Banco de Fomento de Angola, via her and her father’s various holding companies. Isabel owns 25% of Angolan Bank, Banco BIC. She also sits on its board. The bank was created in 2008. Just about the time all those billions went missing… Just saying. She owns 19% of Portugal’s Banco BPI. Actually she used to own about 10% of it but about a month before the bail out was announced she bought another 9.4% from one of the failing Spanish banks, Caixabank for €46.7 million. BPI in turn owns a 50.1% stake in Banco de Fomento Angola. So Isabel and her father have quite a hold on banking in Angola.

Back in Portugal the dos Santos presence is considerable as well. Isabel also owns a large stake in another troubled Portuguese bank, Banco Portugues de Negocios. This too is a new bank having been created in 1993. It didn’t last long. In 2008 it had to be nationalized. This bank too was badly run. In fact at the point of its nationalization the man who had been its CEO from 1998 – 2007, Jose Oliveira e Costa, was arrested on charges of tax fraud, money laundering, forgery, abuse of credit and illegal gains.

It is worth noting that when I say ‘Isabel owns’ this is a short hand for saying that various holding companies owned by her and her father ‘own’. There are several such companies the first of which was Geni Holdings. This was founded by her and her father along with Leopoldino Fragoso Nascimento, Anthony Van Dunen and Manuel Augusto da Fonseca. An august sounding group. Nascimento is a Brigadier General in the Angolan Army, van Dunen is a former secretary of the Council of Ministers in Angola and Fonseca is Head of Legal Affairs for Sanangol the Angolan state oil company. How they all became rather wealthy international businessmen on their salaries is another mystery.

Nascimento was recently exposed by the FT, along with another cabal of high ranking Angolan officials as having concealed shares in an oil exploration venture called Cobalt. According to various FT articles in April this year,

… three of the most powerful officials in Angola have held concealed interests in the Goldman Sachs-backed group’s oil venture in the African country.

The company declined to comment but did not deny the story. Angola, it is worth noting, is part of the West African oil frontier that Western banks, Oil majors and nations are all scrambling to get a stake in. Banks like Goldman Sachs, oil revenue, and Presidents who rule for 30 years and more – certainly no cause for concern there.

So taking a look over the above, you tell me, is Isabel dos Santos, her father and their money fit and proper to own Portuguese banks? Should the Portuguese people be taking on billions in debt and suffering austerity cuts, in order to bail them out?

The fact is, that Europe’s bankers do not ask where money comes from, how it was gotten, who was hurt, what blood was spilled or what misery went in to its accumulation. They do not care. But we should because we are the ones who are being forced to shoulder the cost of protecting and further enriching the entire stinking, corrupt heap.

When all is said and done two things remain. First, Portugal’s entry is quite modest by European standards. I have mentioned it because it is more revealed for what it is, than similar corruption in other countries. Second, much has been written about how the West needs to help the ‘third world’ to become more like us.We like to tell ourselves that we are helping ‘to build their institutions’, ‘reduce their corruption’ and export to them our values and ways of doing things. The truth however, is that via our putrid and rotten financial system and the small elite who own and run it, we have been busy importing their corruption to add to our own, allowing our institutions to become as corrupt and in-the-service of the guilded few, as theirs.

Remind me how wonderful our democracy is, how healthy and robust it is, how the rule of law is sacrosanct in Europe and stands ready to protect the many against the powerful few. Just remind me … if you can.