The Chinese Take-Away

The glory that is corruption in Mallorca. The glory and the sheer stupidity. Gloriously stupid. The “Pasarela” operation into what the hell has been going on at IBATUR, the regional government’s tourism promotion agency, has unearthed one of the more bizarre of all the questionable practices.

If you were to want to have translated the acronym IBATUR into Mandarin Chinese, how much do you reckon it would cost? Six letters, that’s all, but let’s be generous as Chinese “letters” are of course nothing like our own. There is generous, though, and there is generous. Would you say that six thousand euros was a fair payment? No, you probably wouldn’t, and nor would the investigators say it was fair either. Which is why they are rather keen to understand why this amount was trousered by one Felip Ferré who just so happens to be a nephew of … you might have guessed it … disgraced former president, Jaume Matas, and who also happens to be implicated in yet another corruption case. The six grand was paid to him by the tourism ministry.

There are other strange questions arising from this investigation, such as one related to ten thousand euros paid to someone to come up with a study into the benefits of golf on the islands, a study that was compiled with information lifted straight from the internet. This may not be in the class of a dodgy dossier based on a PhD thesis, but it is equally stupid, as in did someone really believe that it might not be found out, like six grand for translating six letters might not be found out.

Then you have what was going on at the Fundación Balears Sostenible with its stupid green card, the “tarjeta verde”. Let’s be generous where this is concerned as well, and say that it was a highly altruistic means of providing discounts while at the same time promoting the natural glories of the islands. It was, however, really intended as a way of raising dosh, once the old eco-tax was kicked into the Mediterranean and drowned with the outcry that the tax had caused. How much do you reckon it raised? According to the audit for 2008, it brought in – to the Fundación, charged with its administration – the massive amount of 13,524 euros. It is believed that there has been a shortfall of some 400,000 euros, some of which can be explained, it is alleged, by the fact that hotels selling it have simply not handed over the money (and of course the hotels have been hounded for back-payment of the eco-tax during its shortlived and crazy existence). Set against the lack of revenue are the costs which have given rise to losses on the venture of over a million euros a year. In the hotels’ defence, it is being said that the card had little success with tourists, which is probably true. At ten euros a pop, it may have seemed to offer benefits, but was just another example of how such a discounting approach doesn’t work.

This may not necessarily indicate anything fraudulent – at the Fundación – but it smacks of inefficiency, to say the least. Which brings us to another question – that of pallets and pallets of publicity material on behalf of the Fundación which were stashed away in store and never used.

Corruption and inefficiency. Fraud and waste. Different they may be, but they are two sides of the same coin – the one that was spent and spent by an extravagant and uncontrolled public sector, especially the tourism ministry. One says “was”, as one can but hope that this is no longer the case.

* Acknowledgement to “The Diario” for different reports that informed the above.

Any comments to andrew@thealcudiaguide.com please.

Flash – Ahh, Ahh (John Hirst Again)

Without even reading reports about the John Hirst case, one can guess at the language. “Shockwaves through the expatriate community”, and so on and so on. Of the reporting there has been, some has been over the top. Technically, comparisons with Bernard Madoff may not be inaccurate, but the scale is completely different. 

There are many people who stand to lose their savings as a consequence of Hirst’s activities. They should have sympathy, but one does have to ask, did they seriously believe an investment opportunity that yielded 20% regardless of market conditions? It would appear that some did. Many of you will probably be thinking that they were gullible and naïve. Maybe they were, but they are still deserving of sympathy, and now is not the time to be haranguing them for a lack of wisdom.

It should be stressed that this is as yet an alleged fraud, and that it is under investigation by the Serious Fraud Office, but the circumstances of Hirst’s sudden flight from Mallorca, having trousered some 20 million quid, were bound to raise suspicions. And these, unfortunately, seem to have been confirmed. There are voices from the south which, disbelieving of what has transpired, think that all might yet be ok. Perhaps all will be, and investors will get their money back. Perhaps it’s all been a mistake. Time will tell, but if you look at the footnote to this piece, you might draw a conclusion – or more than one.

More than any criminality, what does this story tell us about the expat community, as it is largely this community that has been apparently taken in? The news reporting is quite revealing and, inevitably, falls back on the default lexicon that gets hauled out at such times. The community is “tight-knit”, we are told. Is it really? Or is it isolated, a social phenomenon of convenience? 

The picture that is painted is of an artificial sub-society centred on the social world of the cricket club and dinners. Of the Rotary and the English Speaking Residents Association. With the exception of the latter, it could be a leafy Surrey town where the community is that un-tight-knit that home mobility is a means to a better school and that parking the car at the local cricket club is an exercise in one-upmanship. John Hirst, we are told, was not a “flash git”. Five-bedroom villa, a Merc, a “state-of-the-art snooker room” and a wedding that went on all weekend. There is flash, and there is flash. It does all rather depend on your point of your view. But the chances are that, by comparison in that pretend tight-knit community, he was not. 

Last year there was a short-lived “storm” caused by an article in “The Daily Mail” . This was, in part, a condemnation of the vacuity of expat living, as experienced by some in the more expensive parts of Calvia. The Mail was accused of playing fast and loose, and the article may indeed have been an exaggeration, but the press love this sort of expat exposé stuff as it satisfies a prejudiced and jaundiced impression of the expat which does, nevertheless, have some basis in fact. With the Hirst case, you are getting it all, including some crookedness (allegedly). Jeremy Clarkson will doubtless be feeling vindicated. 

Within these thrown-together sub-societies, there emerge the John Hirsts of this world. “A man about town,” we learn. Playing the network, playing the scene, and all for his own ends – once again, allegedly. There is one sense in which the community can be said to be tight-knit, and that is its propensity to “do business” with its own. And so you get people willing to hand over their life savings to one of their own. 

I sincerely hope that everything does prove to be ok. That it has all been a mistake. But whether it ends up in tears or in joy, the story is far more than one of an alleged wrongdoing. In terms of social commentary, it is one of the more important stories you will come across.

 

Footnote – John Hirst and Allied Dunbar?

The note about this case yesterday made the visits to the two versions of the blog go ballistic. There have been several comments, which I have held back, related to a Mr. Hirst and a fraud involving Allied Dunbar (as was) in the early ’90s. I am grateful to all these commentators, but please do understand why I might hold back what you say.

 

Edward Woodward

On a quite different matter. Two days ago, I mentioned Edward Woodward. It was perhaps rather unfortunate, as he has of course died. Total coincidence, and a sad one as The Wicker Man stands the test as one of the great films and Woodward was, well, Woodward. Shame.

The John Hirst Case

This will doubtless be a story for some days to come. If you’re not up to speed with it, here goes.

John Hirst was an investor who lived in Santa Ponsa, well-known on the Calvia scene and in particular at the Mallorca Cricket Club in Magaluf. On Friday, the Serious Fraud Office in the UK announced that it had launched an investigation into Hirst’s firm, Gilher Inc. The suspicion is that he has defrauded mainly British expats of some 20 million pounds as investors in a scheme he said would yield 20% returns, irrespective of market fluctuations. 

Hirst left Mallorca in August, and those who had invested in the scheme began to have their concerns, which led to the SFO’s involvement. Hirst is said to be in the UK and to be suffering from leukaemia. 

Expect more on this. 

Original story from “The Sunday Times”:

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6917139.ece