New Bank. Cavaco uses quotes from his books to respond to deputies and reveals that José Eduardo dos Santos owes him an answer

First, the second volume of “Quinta-Feira e Outros Dias”, published in 2018. Then, the first volume, edited a year earlier. They are the ones, with the indication of the pages from which the quotes are taken, that star in the eight pages of the response of the former President of the Republic Aníbal Cavaco Silva to the parliamentary commission of inquiry into the losses of Novo Banco. Even so, there are some conclusions to be drawn: that José Eduardo dos Santos never responded to a letter from Belém about the Angolan guarantee; and that, for Cavaco, he is the banking supervisor who has the powers to decide on the sector. There is no answer as to whether Grupo Espírito Santo financed his political campaigns, only an indication that he did not ask for money: he had “strong aversion”.

“Bearing in mind that the President of the Republic, under the terms of the Constitution, does not have executive power nor does he exercise any function within the scope of the financial system and that, being a one-person body, he does not have services that allow him to collect and process information motu propriowhat was mentioned by me on the subject in the exercise of my activity as President of the Republic and that I considered relevant what, after more than six years, I can transmit to that commission of inquiry with the rigor that is required of a former President da República, appears in the 2nd volume of the book ‘Thursday and Other Days’ (Porto Editora, 2018) and which I transcribe below”, is what Cavaco Silva announces at the start of the response sent to the president of the parliamentary inquiry, Fernando Negrão .

Arrived this Thursday, April 22, at Parliament, the letter focuses on quotes from the books in which the former President talks about the meetings he had with the prime ministers, precisely on this day of the week, Thursdays. But, despite citing himself, Cavaco Silva leaves some passages that are not in the books.

José Eduardo dos Santos did not respond to Cavaco’s letter

In relation to Angola, the former Chairman recalls the uncertainty at the end of July, a few days before Banco de Portugal’s intervention in BES, regarding Angola’s sovereign guarantee on loans granted by BES Angola to unknown customers.

Cavaco Silva reveals that, at that time, he contacted Angola. “On July 25, 2014, as requested by the Government and the Governor of Banco de Portugal, I wrote a letter to the President of the Republic of Angola, Eng.º José Eduardo dos Santos, in which I considered it essential that the Angolan supervisory authority publicly confirm urgently that the repayment of loans that BES had granted to BESA at face value was not at issue, a letter whose content had been suggested by the Bank of Portugal itself”.

“This letter did not have any response”, writes Cavaco Silva.

stephane de sakutin/getty pictures

Although there was no reply to that letter (and from Angola until he later canceled the sovereign guarantee), that same year, on November 11, 2014 (National Day of Angola), the Portuguese President sent a letter to José Eduardo dos Santos , congratulating him, underlining the good relationship between the two countries and wanting to deepen relations: “Our relationship, structured both at the level of our citizens and companies, as well as at the political and diplomatic level, has been mutually beneficial”.

José Eduardo dos Santos left the Angolan presidency in 2017, being later elected João Lourenço, who remains in office.

BES’s exposure to BES Angola cost more than €3 billion in losses.

Bank of Portugal knows

In the answers he gives to the deputies of the inquiry commission, Cavaco Silva also talks – and here without self-quotation – about who actually has the capacity to know about banking. The message goes in the letter to Parliament, which has been designing legislation related to the sector, namely for greater transparency, and when a Government is in office that was an actor involved in several of the movements in the sector, from the beginning in the process of selling the Novo Banco, in 2017, and which, before him, was the Executive of Passos Coelho, who always considered that Banco de Portugal had the competence to deal with the BES case.

city ​​brand

“In the exercise of my duties as director of the department of statistics and economic studies of the Bank of Portugal, as Minister of Finance and as Prime Minister, I confirmed my conviction that only central banks, which, under the terms of the law, have the competence to in terms of banking regulation and supervision, they have specific services technically equipped to collect and process in-depth information about the banking system and, consequently, to take or propose measures to Governments to ensure its stability”, writes Cavaco Silva.

The former prime minister said, in relation to banking, he had adopted the practice of “receiving the presidents of the boards of directors of banks who asked for an audience and what was relevant he would make known to the prime minister at the meeting on the following Thursday” “I proceeded in the same way in relation to the governor of the Bank of Portugal”, he continued. Cavaco met several times with bankers, namely at the time of the international financial assistance, but without identifying which meetings with each of them.

And he justifies: “this practice was considered by me the most correct and most appropriate for a sovereign body, such as the President of the Republic, which does not have executive power and does not exercise any function within the scope of the financial system and which does not have services that allow collecting and processing information, much less in a particularly complex and sensitive domain such as the banking system”.

He spoke about BES for the “superior national interest”

In fact, in the quotes he makes from his book, he makes it clear that his work was largely dictated by Banco de Portugal. “At the meeting on Thursday, July 10, 2014, I started by expressing my concern to the Prime Minister about the contagion to the Portuguese financial system from the crisis of the Espírito Santo Group”. “He told me that the situation was being monitored on a permanent basis by the Bank of Portugal, as he was responsible for”. “The next morning, the level of my concerns subsided,” he declared, based on the “clarification” then issued by the supervisor.

In the same book, he also spoke of a trip to South Korea in which he was surprised by questions from journalists from the country about BES, where he safeguarded that Banco de Portugal “has been doing very well to preserve the stability and solidity” of the system. In the book, he adds that his role was to explain the differences between Banco Espírito Santo and its shareholder family group, and that he did not want to feed “alarmisms”. Cavaco Silva refuses that in those statements he gave any incentive to invest in BES, something he says was imputed to him by someone who had “unhonest intentions”.

Now, he explains – and here without citing his work – that he responded in South Korea “with the aim of defending the superior national interest abroad”.

Aversion to asking for campaign funding

On the financing of the campaign by BES, about which he had been questioned, namely about possible donations received from GES, Cavaco Silva did not respond directly. He cites his first volume of “Thursday and Other Days”, in which he says that he “always” had “a strong aversion to asking for money for electoral campaigns”, and that he did not count on money from the parties. But he left work to the deputies.

“The accounts of my electoral campaigns regarding the election for President of the Republic, presented in due time to the Political Accounts and Financing Entity under the terms of the legislation in force, are available and can be consulted by the members of the money commission”, he advises, before to conclude that Members can also visit the archive on their Presidency’s website.

Chip might not answer

As a former Head of State, Cavaco Silva could not respond to the parliamentary inquiry, according to the legislation in force. In the commission of inquiry into BES and GES, in 2014 and 2015, he was not even questioned by the deputies, since the parliamentary majority at the time PSD and CDS did not allow it. Now, that didn’t happen.

It was the PS who showed a willingness to ask questions to Cavaco Silva, in writing, in the context of the doubts he raised with the political authorities in office in 2014, the year of the fall of Banco Espírito Santo. Alongside the former President of the Republic, questions were asked to Passos Coelho (in which the socialists try to make a connection between the bank’s losses and a decision taken during his government) and Carlos Moedas, then secretary of Deputy State of the Prime Minister and today candidate for the Lisbon City Council.

In addition to the socialists, both the Left Bloc and the PAN posed questions to Cavaco Silva.

Leave a Comment