The Coast Of Corruption And Broken Dreams

The Coast Of Corruption And Broken Dreams

While in Spain, we visited Torremolinos, a city on the Sun Coast. One of the first things I saw were multiple construction cranes standing still over what would soon be high-rise condominiums or major beach resorts. Since the late 90’s the Sun Coast on the Mediterranean in the south of Spain has experienced a huge construction boom. Three million houses have been built in Spain over the last four years, and more than half of these homes were built on the coast. Forty percent of all European construction is taking place in Spain.
While walking the main strip along the beach, I took a look at ads on window fronts of retail sales offices for luxurious condominiums I thought to myself, “Wouldn’t one of these properties be a nice reward for a retiree after working hard his entire life?”

While in Torremolinos, I saw a CNN presentation called “Costa Del Con” about corruption involving local politicians and real estate companies.. The sad thing was that the corruption wasn’t exposed until after the construction was complete and the building had residents. Now that all this corruption is finally being exposed, many of these buildings are facing demolition, leaving the occupants very worried and not knowing what they did wrong or why they are being punished for other people’s bad business ethics.
During “Costa Del Con” a man named Francisco Bugallall, a retiree from Madrid, was interviewed. Bugallall bought an ocean front condominium for a pretty hefty price of just under 300,000 euros at a resort named Banana Beach in Marbella. The Banana Beach Resort is facing demolition because it was built on top of protected public land. When Francisco was asked what he would do if the court order goes through and his home is demolished, he said, “Well, I can’t really imagine it. They would have to take me out with the machines with the cranes, or a squad of police. I’ll lock myself inside the flat.”

I found the sales website for the Banana Beach Resort, and they are still trying to make money by renting and selling units. There was no mention about the building having a court order to be demolished. Right now during peak season, the least expensive condo starts at 700 euros a night. This translates to 980 American dollars. The most expensive condo is going for more than 1150 euros a night. You had to visit the sales office in person to get the prices to buy a condo. These rental prices surprised me considering all the heat this property is facing.

It turns out Bugallall is not the only person whose home is facing demolition. Thirty thousand apartments originally approved by the Marbella city council are now being condemned. Another reason these buildings are being condemned is they were built too close to public highways. Marbella’s problems of construction corruption arose 15 years ago when a mayor who is now dead wanted to bring more tourism and money to the city. Many real estate companies were interested in developing Marbella because of its potential to become a popular vacation destination for wealthy northern Europeans. Even though real estate companies invested in the city, the city treasury is now bankrupt and the city council has been dissolved. This hasn’t happened in modern times. Many public officials are facing charges including but not limited to granting permission to build on nature reserves and other land protected from development; manipulation of public tenders; accepting bribes; and illegal price fixing. Three of these suspected criminals are Mayor Marisol Yague, her Deputy Mayor Isabel Garcia Carlos, and City Planning Advisor Juan Antonio Roca. Police exposed these politicians when a March of 2005 investigation found drug-related money laundering by people with ties to the Russian mafia who had funneled more than 600 million euros into the booming property development sector of Marbella.

Soon, more detective work revealed that the scandal led to these members of the local government. Since the city council has been dissolved, a criminal lawyer named Diego Martin is the city’s administrator until new elections are held. When Martin was asked how much money was missing, he said, “It’s difficult to say how much money exactly, but we’re talking about properties that have grown to a value of 2.4 billion euros. Mind you, that’s only what we can see. We suspect several billion more should have gone to the council, but didn’t.” Police raided Garcia Carlos’s home and found about 350,000 euros inside. She claimed that only a very small portion was hers and that the rest was her daughters, given to her by her grandparents. When being interviewed, Garcia Carlos was asked if she ever took money or bribes that weren’t hers while she was a council member. She said, “Never, ever will anybody be able to say that I received any money illegally from any source or for any motive. They simply won’t be able to prove it.”

Although I think the outlook for bugallall’s home looks pretty grim, supposedly there is some buyer’s protection. In Spain, there is a thing called “public faith in the registry.” Some local lawyers consider that this principle establishes that a person who purchases a home believing the data in the local registry is valid and must be allowed to retain ownership. Also, there was a news article online that interviewed Manuel Martin, the Dean of the College of Registrars for Property in Western Andalucia, and he said, “The mortgage law in Spain protects the rights of property oweners who buy property in good faith, based on the information contained in the public registry at the time. It would also mean that a building could only be knocked down unless all the individual owners were denounced, and that it could be proved that they knew the license granted for the building was null.”

Since Bugallall and other tenants of the Banana Beach Resort have hired a lawyer named Jose Cocien, but it looks like all this mess could take the courts years to resolve. When asked what he thought the court’s decision would be, Cocien said, “It’s a political problem, and when you’re talking about politics, you never know.”