Sun, sea and dirty money

A potent brew of laundered money and northern Europeans seeking houses in the sun risks pushing Spain’s Costa del Sol, on its south eastern shores and which is in the throes of a construction boom, into the control of organised criminal gangs, a university report has warned.

As the Mediterranean coast around Malaga, south eastern Spain, becomes what is possibly Europe’s largest building site, creating a new “megalopolis” that stretches along 128km of coastline, the attractions for crime cartels are clear, the report from a group of criminologists at Malaga University warns.

They have identified five stages leading to legitimate political control of the area being ceded to organised crime. Councils are already on the first step, and some are suspected to be higher up the ladder.

“The risk is that we advance along the scale,’’ said José Maria Diez Ripolles, head of the university’s Andalusian Criminology Institute.

Although 1,2-million people formally live on the Costa del Sol, there are actually believed to be about three million residents, many of them foreigners.

With 47 000 houses being built every year and total growth in building of 1 800% in the second half of the 1990s, it could eventually become Spain’s largest city, according to Per Stangeland, deputy director of the criminology institute.

In its report, the Malaga University team highlights an already tight relationship between construction magnates and town halls that means the latter raise much of their municipal funds from the licences granted to the former.

Bribes, though hard to prove, are also widely suspected to accompany some deals that involve reclassifying rural land or open spaces as land that can be built on.

There are already clear signs that dirty money, including the proceeds of the local hashish trade with nearby Morocco and the cocaine money that Colombian cartels raise in Europe, is being laundered through local real estate companies.

The clearest proof of a link between drug money, politics and construction came when the former socialist mayor of Estepona, Antonio Caba, was given five years in jail last year for helping launder the money of a Turkish heroin trafficking syndicate.

Caba, elected on the promise of cleaning up the alleged corruption of a previous mayor, had helped Turkish smuggler Levent Ucler launder more than £1-million through local real estate.

Figures for the amount of laundered black cash are impossible to calculate and researchers say this includes not just cocaine and drug money but also the “grey’’ money of European small businessmen who buy houses with cash never declared to their own tax authorities.

The Observatoire Geopolitique des Drogues noted three years ago that Spain was already Europe’s largest Colombian drug money laundering centre.

“One wonders how a province with one of the lowest incomes per capita in the country can have a growth of 1 800% in the construction of new private housing in the last five years,’’ Stangeland and Dr Alejandra Gomez-Cespedes say in the report.

The Costa town hall that has registered most corruption scandals is in Marbella, where two ex-mayors, Jesus Gil and Julian Munoz, have now both been banned from holding public office.

But the new team in charge of Marbella is already under investigation by local state attorneys after a coalition of councillors from various parties ousted Munoz this summer.

At the provincial police headquarters in Malaga, Chief Inspector Fernando Vivas heads a team of just eight police officers whose job is to tackle financial crime on the Costa del Sol. “It is like fighting an army of elephants with a few ants,’’ he admits.

The extent of corruption was never more apparent than when Vivas arrested a court clerk on suspicion of removing files containing evidence against Gil, who also earned notoriety as president of Atletico Madrid football club.

When Vivas took the man to search his Marbella apartment, he hurled himself off the roof. He took the secret of who was paying him to the grave. Gil has denied any involvement.

Vivas says the combination of intense demand for houses and the presence of Gibraltar, where opaque offshore companies are easily set up, has helped create the opportunities for corruption.

The problem is made worse by expatriate residents who cannot be bothered to register as citizens of their new towns, robbing those town halls of state funds that are awarded on the basis of how many residents they have.

Partly because of this, local mayors plead that the only way they can fill the coffers is by selling building licences to the speculators.

Vivas said residents of the Costa del Sol are paying the price. “The Costa’s hills and woodlands are being destroyed,’’ he said. — Â

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