€110m wind fraud uncovered in Spain

Hacienda detected commissions in the authorization of wind farms. The Tax Office alleges a plot of 110 million in Castilla y León. Charges and related regional builders streamlined procedures after payments. ...The inspector of the Tax Agency concludes in his report since his purpose is to investigate the outstanding tax debts, additional findings may indicate "evidence of money laundering". He is sending his findings to the Anti-Corruption Prosecutor and Prevention Service Money Laundering Economy Ministry to "continue the investigation".

The Tax Office has reported to the Anti-Corruption Prosecutor alleged payments of commissions to facilitate the installation of wind farms in Castilla y León. A report of 94 pages prepared by the Tax Inspection Agency and dated Dec. 30  was released to this newspaper. The report details an "organized existence of a set of people and companies with various roles received "at least 110 million euros to expedite the processing of wind farms in that community."

Hacienda included in that organization the "public authorities of Castilla y León", "utilities that would do the installation and operation of parks", "promoters of wind farms and intermediaries who obtained the necessary administrative authorizations" and "the companies owned by local entrepreneurs who, without valid economic reasons, received transfers of funds or shares for more than 110 million euros ".

The report details seven transactions in which the utilities end up paying these amounts directly or through the transfer of shares in companies created to exploit the wind parks and without any consideration or specific action required of the local entrepreneurs or senior officials.

The conclusion is that the utilitties transfered the shares of the company in amounts that were a hundred or even thousands of times the equity initially provided, without, in most cases, projects having installed wind turbines for the production of energy ".

The Tax Office has detected that among the beneficiaries were people who, at the time, occupied positions in the Ministry of Economy of Castile and Leon, and were involved in authorizing the projects.

One is the then Deputy Minister, Rafael Delgado Nunez, who signed the administrative authorizations. This paper  tried unsuccessfully to locate Delgado Nunez and others who testified before the inspection. There he stated that the process in that community had been "highly effective" because there were hardly any appeals to the courts. He also valued the fact that the applicants and project operators had a regional interest, according to the report.

However, the principal designated by the document is Alberto Esgueva, who was until 2006 CEO of Excal, public company's board dedicated to promoting exports. His business group is one of the most benefited by operations. Since last September he resided in Poland, where he runs a real estate company. He would not speak to this day despite repeated requests to his secretary.

The head of the Ministry of Economy is Tomas Villanueva, who has been in office since 2003 and is considered as the right hand of the regional president, Juan Vicente Herrera (PP). His name is mentioned in the report to indicate that Delgado Núñez "played a very important role in two departments of the Junta de Castilla y León (Economy and Education) whose ownership corresponded to director Tomas Villanueva, so that when the director changed counseling so did Rafael [Delgado], either as deputy or secretary general. "

A spokesman said counseling knew all about the report, and insisted that authorizations were given correctly and that there were no transfers between companies. The Minister declined to comment.

The inspector documented many payments showing an immediate response in administrative concessions or decisions of the Board to permit wind farms. In some cases, payments resulted in decisions that were pending for over six years. In others, the transfer of shares followed just two days after Rafael Delgado signed the administrative approval for a case that stood pending for three years.

Those wanting to install wind farms use joint ventures as the vehicle to work with advisors and local entrepreneurs "related to the regional power."

The utilities  who "presented the project, the environmental impact and act as promoters of the wind farm, and they are the ones who perform studies measuring wind [...] and performing all the administrative procedures for obtaining permits, licenses and authorizations without entrepreneurs of Castilla y León "participation.

By partnering with a local entrepreneur or a high regional office, permission to install the park was granted. The utility then buys back the shares from its local partner for a price multiplied by the equity that they had paid.

In these conclusions, the inspector says repeatedly that "we are not facing normal business relations, since the observed relationships were not characteristic of market logic" and states that there were transfers of funds that "lack downright valid economic reason". Research of Finance found this impacted 35 wind farms approved between 2004 and 2007. However, there are subsequent payments that were indentified until 2009, as the turbines were launched.

One of the renewable energy companies that paid out a large amount to install a wind farm was Preneal, owned by Eduardo Merigó, the former president of Visa in Spain and an ex-secretary of state in former Spanish Prime Minister Adolfo Suarez’s Union of the Democratic Centre (UCD) administration (1977-1982). He told tax inspectors that he “felt like a victim of the system.”

Merigó also declined to speak to EL PAÍS for this article.

Preneal paid €6 million to San Cayetano Wind, which belonged to Esgueva, without “any obligation or compensation,” the report states.

Another €7 million was paid to Cronos Global, which was half owned by Esgueva. Last December, a Preneal representative told tax inspectors that Cronos had nothing to do with obtaining permits or building wind farms.

The projects have still not been approved, but Cronos Global received €7 million after putting down a €1.5 million initial investment.

Cronos Global was also involved with suspicious bank transfers of up to €100 million to Poland and the United States and another 38 million transferred into Spain. Foreign exchange outflows exceeded what would be expected for a business that could be categorized as small. 

The other 50% of Cronos Global belongs to Luis María García, a clergyman and his family. Cleric is the president of Parqueolid, a construction of Valladolid. Cleric told this newspaper that seven years ago he had a stroke and he does not remember any of it. Parqueolid is now closed. The company, according to Finance, received from the Ministry of Economy 50 million for a building in which rearranged their headquarters. Finance has forwarded to prosecutors that operation. Thus, a court in Valladolid is investigating the personal accounts of Rafael Delgado.

Preneal also paid 10.48 million to Collosa Group, a major builder in Valladolid, which had placed 51,000 euros. "The inspector has not found any evidence, even indications that existed between the two companies providing services by Inverduero". A spokesman for Collosa noted that "the company is not aware of the existence of that report and prefers not comment to comment."

Preneal was not the only one paid. One of the subsidiaries of Collosa, Inverduero, Endesa signed in 2005 with an agreement to develop wind farms. I Prodener was founded to build a wind farm in Burgos. The local company put 15,000 euros and two years and 26 days after Endesa shares repurchased by 2,485,000. A spokesman for Endesa states that have reviewed the contract and who see nothing abnormal. He explained that funding problems Inverduero decided to sell not to block the project and he did it for 2.5 million when it was priced at 4.2. "Currently, remain with Inverduero two other wind projects, through Enel Green Power. One of them is prior to this operation and the other later. Both parks are operational, so it is clear that Inverduero was neither is a financial or instrumental partner but a local clearly industrial partner and involved in the development of projects, although I had to get out of the aforementioned by financial problems they were affected in 2009, "explains the mail.

Collosa is a company that "has been characterized by performing important business with the various ministries and regional government bodies dependent on the central and local government". Collosa participated with 35% in the company that constructed the building of the Castile and León. Between 2006 and 2007 a turnover of 134.4 million to the Junta de Castilla y León. In addition, joint ventures in which it participated Collosa billed 304.2 million to the Board at that time.

Treasury notes that "all these actions of apparent options, purchases and sales of securities culminate with transfers of huge amounts of billion economic groups in Castilla y León and the temporal sequence of the administrative process and the facts described can be inferred, presumably some correlation between the two. "

"It is the less surprising that in the months prior to July 12, 2007, when Rafael Delgado leaves his post as Deputy Minister of Economy, to fill the secretary general of the same counseling, signing a number of resolutions were to occur, which seems unusual for the time sequence which should have led the authorization process of the parks have been followed, "he adds.

His conclusion is that "the exorbitant amount of money amounts transferred to the major economic groups Castilla y León, taking into consideration only the seven cases presented without prejudice that existed many more, amounts to amounts of 47, 35 , 10, 7, 6, 4 and 2 million euros, totaling more than 110 million euros, leads to the conclusion that we are not facing the course colloquially known as Achievers, since the amounts transferred, so exorbitant thereof, multiplied by tens of times which are common in what is often referred to as cases of kickbacks ".

The inspector of the Tax Agency concludes in his report since his purpose is to investigate the outstanding tax debts, additional findings may indicate "evidence of money laundering". He is sending his findings to the Anti-Corruption Prosecutor and Prevention Service Money Laundering Economy Ministry to "continue the investigation".

Iberdrola paid 47.1 million to an official who invested 24,400 euros

The largest wind operation under the magnifying glass of Finance was built between Iberdrola Renovables Castilla y León, Ibercyl, and the company San Cayetano Wind, owned by Alberto Esgueva who was the CEO of a public company Excal SA, under the Ministry of Economy, until 2006.

In 2005, while he was a senior member of the council authorizing wind farms, Alberto Esgueva founded the company Global Energy Castellana along with Ibercyl, a subsidiary of Iberdrola in the community. Esgueva offer 24,400 euros for 40% of the equity and Iberdrola put in 36,600 for the remaining 60%. Esgueva used for the San Cayetano Wind society, which had its headquarters in a building in Madrid "in which neither was located nor was it known." San Cayetano is the name of the company's family, Sewer, which manufactured cartons. Between 2005 and 2008, Castilla y León JV authorized the construction of 18 wind farms in Soria, Burgos and Leon totaling 492 megawatts. In February 2007, two years after establishing the company, Iberdrola agreed to buy the shares of Sewer for an amount tied to the megawatts installed and electricity production. The first settlement was for 13.595 million euros. After the transfer was signed, Iberdrola paid the full sum and retained the wind projects.

By October 29, 2009, the Treasury detected 10 transfers from Iberdrola to San Cayetano Wind totaling 47.1 million euros. Once the projects achieved 100% production, the shares of Global Energy Castellana were dissolved.

The Tax Agency notes that "has found no proof or even evidence, that there was a provision of services by San Cayetano for Ibercyl Wind" and considered it "obviously implausible" that a high regional office received 47 million euros after having invested 24,400.

A spokesman from Iberdrola declined to comment on the case and denied any wrong doing. In its submission to the Treasury, contained in the report of the inspector, Iberdrola states that Castilla y León is a community in which operating permits are obtained faster because of how the administrative procedures are handled.

Community leader:

Castilla y León is the community with more wind megawatts installed, 5,560, 25% of Espal.

Wind farms have guaranteed premiums paid by consumidors in electricity bills for 25 years of operation.

Wind received in 2014 about 1,250 million euros in premiums, a total of 6,500 for all other renewable technologies, waste and cogeneration.

According to instalda power, wind farms in Castilla y León last year they accounted for about 300 million in premiums.

In 2014, wind was the second source of electricity in Spain (20.4%), behind only nuclear (21.2%).

Between 2004 and 2009, wind power in Castilla y León was multiplied by 2.5: it went from 1,531 to 3,952 migavatios installed.

When the wind farms do not exceed certain power environmental approval and administrative approval depend on the autonomous region.

Some communities held wind contests. Castilla y León chose another model: the Board approved sites presenting promoters based on environmental criteria and connection to the mains.


APR 22 2015
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