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PARLIAMENTARY INQUIRY No. 1/XI

The Possible Commission of Parliamentary Inquiry to the Government's performance

in relation to the Foundation for Mobile Communications

The FCM-Foundation for Mobile Communications, is a foundation of private law,

consisting of telecommunication operators TMN-Mobile Telecommunications

Nationals, S.A., Sonaecom-Services of Personal Communications, S.A., and Vodafone Portugal-

Personal Communications, S.A.

This foundation was constituted on September 11, 2008, and was the subject of

recognition of the State, through the Despacho n. 28305-A/2008 of November 4, of the

Secretary of State for the Presidency of the Council of Ministers.

In accordance with Article 3 (1) of the respective statutes, the FCM shall aim to

dynamising the use of new technologies and, in particular, the " promotion, development,

generalization and consolidation of access to communications, in particular furniture, and, as well,

guarantee the broad use of new information and communication technologies, contributing

for the economic, social and technological development of Portugal ".

These same statutes further provide for, in paragraph 2 of its Article 3, that the foundation must

fund or subsidize projects defined and promoted by the Portuguese state, as well as

fund access to computers, tasked with it, too, " grant funding or

subsidies to any natural or legal persons and to develop, promote, finance or

subsidise any projects, actions or campaigns ".

As the umbrella body, the FCM has a General Council, composed of six members, three

of which appointed by the Government, including its chairman. It is to the General Council that

incumbent, inter alia " define and establish the general policies of functioning of FCM "

and, well so, " to designate and exonerate the members of the Board of Directors, as well as

appoint the respective President " (cfr. als. a) and (e) of Article 8).

The top direction of the FCM fits, in this way and arguably, to the Government, despite the fact that

deal with an entity formally with a private legal nature.

As far as the heritage element is concerned, there is the greatest uncertainty about the purpose of the

financing that FCM has been a beneficiary of, which is not dissipated by the respective

Report & Accounts 2008, released only a few short days ago.

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In fact, if on the one hand the FCM bylaws provide for, as an allocation of the three carriers

private institutions, the capital of 24.9 million euros, on the other, the same institution will have

received, between the end of 2008 and 2009, about 36.5 million euros of public funds,

obtained through ANACOM.

The mentioned figures highlight that the public funding that the FCM has been

addresse has proved determinant for the pursuit of the activity of this entity that was

supposed to have a private substrate.

In effect, the State has created various initiatives through which it has been distributed about one

million computers to pupils from Portuguese education institutions (Programme

e.school and the Initiative e.escorinha ).

Succeeding that, instead of being the state to be provided, by itself or through public bodies

competent, the said computer equipment, the Government has understood to create an artifice

through which such supply is carried out by the private operators institutors of the

FCM, which, for the purpose of, and without prejudice to the funding itself, has received already from the State

the amount of 47.7 million euros.

The issue that in this framework assumes the greatest gravity is thus that of the State, through a

fictitious private entity, created under its auspices and managed by people of its trust

policy, be circumvent legal, national and community provisions, applicable to the

public procurement and thereby to evade control of the use of public funds.

In effect, attentive to the number of computers distributed, it offers no doubt that the

expenditure inherent in its acquisition far exceeds the maximum limits legally

defined for the public tender dispensation.

Please refer, incidentally, that the doubts that the procedures adopted by the Government in this regard

raise, they are also listed in the preliminary findings of the report of the European Commissioner

Charlie McCreevy, holder of the Internal Market portfolio and Services.

If what you have just referred to would always apply to public procurement, stricto sensu , the same

will be able to sustain in respect of mandatory compliance with such impositions

legal in the case of funding with public funds.

For this understanding, incidentally, the Ministry of the Ministry's own joint communith statement itself

Public Works, Transport and Communications and the three mobile operators instituting the

FCM, of July 1, 2009, when it acknowledges that " The legal nature of foundation of law

private does not waive the application of the Public Procurement Code and, consequently, the

public procurement rules, to the extent that FCM is considered a contracting authority,

pursuant to the provisions of Article 2 (2) (a) of that Code, as this is

finds subject to the management control by the Portuguese State, qualifying, by this

reason, as a body of public law . "

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It turns out that, without prejudice to the statement that you have just mentioned, the Government, along the

last months, ora has invoked the condition of private foundation of FCM-when it comes to

justify the non-obligation to conduct a public tender in the procurements carried out-, ora

has declared that it is the state that manages the FCM-to prove that public funds are not

delivered to the management of private.

This arguably duplicitous argument only accentuates the doubts that, on the transparency of the whole

process, perpass in Portuguese society.

In fact, the purchasers of the computers Magellanes could be formally operators

private, but the acquisition of such equipment is necessarily carried out at one

company-the JP Sá Couto-, indicated by the State, which defined the technical characteristics of the

computers, which are coincident with those of those manufactured by that same company.

In addition, it is poorly understood that a foundation of private law is in fact

effectively controlled by the Government, in particular in what concerne the respective direction,

management and operation.

Who assumes it was the Government itself when, in paragraph 5 of a Ministry's Communiqué

of Public Works, Transport and Communications, of June 24, 2009, referred that " The

Portuguese State is responsible for the management of the Foundation, designating, through the Board

General, the totality of the members of the Board of Directors, making facilities available

for their functioning and allocating monies for compliance with the obligations of action

social assumed by the State in the e.school Program . "

In this context, already in the past Legislature the PSD Parliamentary Group has not ceased to exercise

your prerogatives in the audit of the Government on the purpose of the case of the Foundation for the

Mobile Communications, despite the difficulties then created by the previous Socialist majority.

It is important to highlight, incidentally, that the previous Minister of Public Works, Transport and Communications

stated in the Assembly of the Republic, July 7, 2009, that by the end of that month, they would be

released the FCM's accounts, being certain that such only succeeded four months after the

promised.

With effect, the Report & Accounts 2008, of the FCM-Foundation for Mobile Communications,

only was disclosed in the site of that entity at the end of last November, not having

the said document allowed to put an end to the doubts that arise on the justification of the

existence of that entity and about its own mode of operation.

Since soon, one does not glimpse a valid reason, from the point of view of respect for the principles

of legality and administrative transparency, so that the state has set up an entity

formally private but under its actual direction, in order to develop an activity

that also the state would fulfil to continue.

AToo, they remain for explaining the real reasons that were at the origin of the

acquisition, by direct adjustment, to the company JP Sá Couto, from hundreds of thousands of computers,

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rather than having resorted to the public tender procedure, the procedure required by virtue of the laws of the

competition.

This option of the executive pretth becomes particularly incomprehensible attentive to the fact that

the Ministry of Education has announced, on November 23, 2009, that the further

purchase programme of new portable computers will be carried out through tender

international public and no longer by direct adjustment.

In effect, in the face of this recent choice by the concursal procedure, how to explain that the

previous Government has determined the acquisition by direct adjustment, of more than one million

computers, to a particular and specific company?

Still in what concerne to FCM's 2008 Report & Accounts, the same presents us with a

synthetic balance sheet , as such omitting relevant information for the correct assessment of the

respective activity, specifically with the acquisition of portable computers. The

information made available by the Report presents even data that you raise special

perplexity, as is the case with those who follow it, the merely exemplificatory title, to highlight:

 The opaque heading ' Other Costs and losses ', it mentions 321 thousand euros being that the same

represents 53.7% between the recorded costs;

 The rubric " Cost with Internet " amount to EUR 130 thousand;

 The rubric " Consultants " reaches the amount of EUR 83 thousand;

 The balance of the account ' suppliers ' records 211.5 thousand € " supplies with

development of Site ", 106 thousand euros from" supplies with events ", 63 thousand

euros from "supplies of lawyers" and others, in a total of EUR 437.5 thousand;

 Absence of detailed reference to suppliers;

 Are referred to but not explained advances to operators ascending to 6.5

million euros;

 The FCM presents three administrators (with total salaries of 72 thousand euros in the period

that worked) and three other collaborators, referring to the existence of resource a

'external consultants'.

This data is all the more incomprehensible how much is it certain that FCM worked in the year of

2008 just four months.

Without prejudice to the doubts that adheres to the existence and functioning of FCM, it is

also by clarifying what its articulation with the Fund for the Information Society

(FSI), created in June 2007-with which it is umbilically related-as well as the

how the counterparts by the licences assigned to the mobile phones of 3 th generation, and that

to serve equally to finance projects of the Government's responsibility, come being

managed and accounted for.

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And it cannot in this respect ignore the amount initially estimated at about 1,300

million euros that has come to be referred to as counterpart in the framework of UMTS licences,

associated with FSI, all the more due to the fact that it is known that FCM succeeding the FSI,

sharing punctually some of its responsible and facilities.

It turns out that, to date, it has not been the Assembly of the Republic enlightened about the way in which the

public funds involved are being managed, by this or any other entity in the framework

of the allocation of computers, in a free or subsidized manner, nor about the

full compliance with national and European legislation, particularly in relation to

competition.

The doubts that have faded supra have been aggravated, not only by the scarcity or

irrelevance of the information made available by the Government and FCM, of which the Report &

Accounts 2008 is no exception, but, also, by successive and contradictory statements

of government officials.

In this scenario, the PSD Parliamentary Group has even taken the initiative of, in the past day 8 of

July, submit this matter to the consideration of the Court of Auditors, requesting this Organ

Sovereignty to carry out an audit that allows for the surveillance of the way they have been

managed the public funds involved in these initiatives, their legality, as well as the

clearance of responsibilities that have been coured in the case of violation of legal norms.

It is therefore important for the Assembly of the Republic to fully exercise its competences in the

mastery of the political surveillance of the performance of the Government and, well, assume the role that

it is up to the defence of the principles of the pursuit of public interest and transparency.

Thus, the PSD Parliamentary Group comes to apply for your Excellency the President of the

Assembly of the Republic, under the provisions of paragraph 2 (a) of the Art. 2 of the Law No

5/93, of March 1, republished after its second amendment introduced by the Law n.

15/2007, of April 3, the constitution of an Eventual Commission of Parliamentary Inquiry

to appreciate the acts of the Government in relation to the Foundation for Mobile Communications and the

Fund for the Information Society in accordance with the object and grounds below

explained.

The Parliamentary Committee of Inquiry has the subject matter, specifically:

1. To purge the way in which the public funds allocated to FCM have been managed-

Foundation for Mobile Communications, and the Fund for the Information Society,

including monies resulting from counterparts for the licences assigned to the

mobile phones from 3 th generation;

2. Identify all public or private persons, natural or legal, who have

been, directly or indirectly, to any title, object of funding or which

have received payment from FCM;

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3. Identify the entities, integrated or exteriors to the Ministry of Public Works,

Transport and Communications, on which you have recited the follow-up and

monitoring of acts carried out by the FCM or the Fund for the Society of

Information, as well as the respective monitoring and budgetary control and the

destination given to the information collected;

4. Check compliance with all applicable legal provisions, national and

community, specifically in relation to contracting, on the part of FCM or in the

scope of the projects defined and promoted by the Portuguese State and by it, direct

or indirectly, managed, financed, subsidized or accompanied;

5. Knowing the justification presented by the Portuguese Government to the European Commission, in the

due to the suspicion of non-compliance with the Community Competition Law,

within the scope of computer procurement procedures Magellanes by adjustment

direct;

6. Apurar whether the choice of the legal nature of FCM has been determined or not by the objective

of circumvent the mandatory to observe consultation procedures and concourse

public prerequisites for the award of the acquisition of hardware and software ;

7. Checking the eventual existence of a monopoly situation in production and

supply of computers Magellanes by the company JP Sá Couto and, in case

affirmative, ascertaining the ground of such fact;

8. Assessing to what degree the procedures followed by the Portuguese state were in total

transparency with regard to FCM and, specifically, in the framework of the Programme

e.school and of the Initiative e.escorinha ;

9. Confirm if the obligations assumed by the Government to the private operators,

through the intervention in the FCM, they have been or have been coming to be fulfilled.

Palace of Saint Benedict, December 7, 2009

The Deputies of the PSD Parliamentary Group