The Establishment’s Revolving Door: the View from Portugal

by Joana Ramiro

8 March 2016

Perhaps no one should be so shocked about the unending incestuousness between senior politicians and international finance corporations. Hillary Clinton’s links to Wall Street have been widely condemned by her Democratic rival Bernie Sanders, and one-time chancellor of the exchequer Alistair Darling has now a cushy job as one of Morgan Stanley’s directors. Between Westminster and the City, the Hague and Frankfurt, the doors of power are of the revolving kind.

Yet, despite the public’s growing cynicism and lack of trust of those at the head of states and banks, it is nevertheless important to hold them to account when they swap job titles. Even more so when the Establishment decides to hold us in contempt and not change job titles at all, just pile them on like medals in a flagrant display of corruption.

I am thinking in particular of Portugal’s former finance minister Maria Luís Albuquerque, an incumbent member of the Portuguese parliament for the region of Setúbal. Last week, Albuquerque was announced as Arrow Global’s newest non-executive director. But before the public could vent an opinion, she laid our worries to rest – she would hold onto her seat in parliament and serve the bad-debt purchasing company simultaneously.

It’s important to bear in mind that Albuquerque is not just another of Portugal’s finance ministers. This is the woman who was managing the country’s finances when Portugal’s second largest private bank, Banco Espírito Santo (BES), went bust. A year after her appointment as state and finance minister, Albuquerque readily made €5bn of taxpayers’ money available to bail out BES. This was not her first major ‘bank saving’ operation in that role.

In 2013, her first main assignment was to manage the bailout of the Banif bank, another failing private institution. The state injected a whopping €1.1m into Banif to keep it afloat, and with it the savings of a million Portuguese workers. But by 2015 the bank had yet again collapsed, its folding announced shortly after the October general elections. An ongoing investigation was started to find out whether the outgoing Portuguese government, of which Albuquerque was the leading lady, knew about the state of affairs but silenced it for the sake of electoral polls.

But the perniciousness of the relationship between Albuquerque and Banif becomes all the more revolting when we find out that from the very beginning the corporation profiting from the bank’s collapse was no other than Arrow Global.

Indeed, in 2014 a company named Whitestar Asset Solutions bought €300m of Banif’s bad debt for a token €40m. Less than a year later, Arrow Global buys Whitestar. As the bank goes bust, Whitestar is once again hired, this time to rate €1.5m worth of credit and real estate-based toxic assets. Who offers to buy up said debt? A certain CarVal Investors, owned by, you guessed it, Arrow Global.

It this sounds confusing, well, it’s because it’s meant to.

Finance companies have a habit of renaming certain departments so it is all the more difficult to trace it all back to the big mother hen of banking fraud. If you’ve seen US blockbuster The Big Short (if you haven’t, you certainly should), you’ll know that this is the same strategy used with bad debt, repackaged in new bundles, neatly labelled with a series of acronyms, incomprehensible to many of those working in the banking sector, let alone a lay person walking in the bank to ask for a loan.

But let’s find out more about Arrow Global, CarVal and all the nasty things they do here in Britain too.

Currently Arrow Global manages a portfolio of €5.5m in Portugal alone. Their clients include a series of major banks and insurance companies. Banif, of course, but also another renationalised bank, the Millennium BCP. Spanish banking giant Santander’s operations in Portugal are also part of the clientele.

According to a Telegraph piece from 2014, Arrow paid no less than £122.9m in loan portfolios that year alone, the face value of the bought debt accounting for more than £1bn. Most of the amount came from “banks and credit card providers in Europe and the UK – continuing to sell off poorly-performing debts as they work to clean up their balance sheets.”

That year, Arrow and its subsidiary CarVal formed a new company named Erudio Student Loans and bought £900m worth of student debt from the British government. The deal included mostly 1990s student debt, which “neither the Government nor Arrow expect to collect” in full.

Safe to say, Erudio is a shambles of a company of which the only human director is a certain Mark Filer, the officer of another 450 businesses. In other (more alarmist) words, we could be heading to a subprime mortgage-style crisis fuelled by unpaid British student debt and leaving millions of, already cash-strapped, Portuguese with nothing. The world is a messed up place indeed.

Of all this, Albuquerque had little to say. Indeed, she sees no conflict of interests in her role whatsoever. In her words, the job “has no incompatibility or legal impediment with having been finance minister and being a member of parliament. Any other reading of this appointment can only be understood as mere party political opportunism.”

Once more, we should perhaps not be so shocked. After all, to anyone topping up their monthly earnings of €3k as an MP with a further €8.3k (in a country where the average monthly salary is about €800), nothing in this world must be incompatible at all.

Photo: Valerie Everett/Flickr

If you want to support media for a different politics, you can donate or subscribe to Novara Media at

We’re up against huge power and influence. Our supporters keep us entirely free to access. We don’t have any ad partnerships or sponsored content.

Donate one hour’s wage per month—or whatever you can afford—today.

We’re up against huge power and influence. Our supporters keep us entirely free to access. We don’t have any ad partnerships or sponsored content.

Donate one hour’s wage per month—or whatever you can afford—today.