We are talking about the Foundation of the Ports of Las Palmas, which is state-owned, and which would not have informed the Managing Authority of the FEDER that it was seeking funds such as Interreg while being in the process of dissolution. What official in Brussels would grant European funds to an entity in the process of dissolution? The capture of funds from the European Union under a corporate structure that has been undergoing an unexecuted dissolution for more than a decade is not a mere accounting anomaly; it poses a compliance risk that borders on criminality. Under Union law, the eligibility of the beneficiary is a substantive, not a formal requirement. When an entity applies for aid presenting a legal personality that has been flawed from its inception—by ignoring an internal liquidation agreement—, the entire funding chain becomes tainted by a vice of nullity. This could imply the return of all EU funds since 2014.
A relevant example is OLAF’s intervention in regional development projects in Eastern Europe, where ‘front foundations’ were discovered to be used by industrial lobbies to evade competition rules. In these cases, OLAF revealed that the beneficiary entities had modified their statutes or maintained structures that, according to their national registers, should have been liquidated after fulfilling their original founding purposes. The message from Brussels was unequivocal: eligibility is not a blank check, but a sine qua non condition that must be maintained throughout the life of the project. If the legal basis is false, the project is null.
The Chaos of Subcontractors
Community jurisprudence and the regulations of the European Regional Development Fund (FEDER) require that the beneficiary possess full legal capacity and an operational structure compliant with the law. If a foundation, like that of the Ports of Las Palmas, were to operate in a legal limbo after agreeing to its dissolution in 2014, any project submitted to capture grants is, by definition, a false declaration or a concealment of relevant information before the managing authorities. This discrepancy is the preferred terrain where the European Anti-Fraud Office (OLAF) begins its investigations. OLAF not only seeks the diversion of funds but also the falsehood in the identity of the recipient, understanding that fraud begins when the administration is deceived about the legal nature of the entity receiving European funds.
OLAF’s precedent is clear when it comes to ‘shells’ or structures that do not comply with the legal requirements of their country of origin. A paradigmatic case where OLAF intervened decisively was the fraud linked to training in various autonomous communities in Spain, where networks of entities were detected that, despite being involved in dissolution proceedings or lacking real activity, continued to receive funds. In those investigations, the European office determined that the lack of veracity in the legal personality of the beneficiary tainted the entirety of the projects, forcing the immediate return of funds and referring the actions to the prosecution for possible crimes against the Public Treasury.
Everything is Being Dismantled
The Foundation of the Ports of Las Palmas now faces this same rigorous doctrine. If a board ignores a dissolution agreement, it is sending to European authorities information that is, at least, presumably misleading. Any OLAF audit reviewing the history of this entity will immediately detect that, at the time of requesting aid, the foundation did not exist in terms of corporate will (agreed in 2014). This not only puts the captured aid at risk but also forces the port authorities—owners of the entity—to face liability arising from allowing a ‘flawed’ entity to operate as an executing arm of fundable projects.
The risk is thus twofold: administrative, which will involve the request for reimbursement of the granted aids, and criminal, stemming from the possible inducement to error towards public institutions. The persistence in activity, far from normalizing the situation, acts as an accumulation of irregularities that facilitates the task of EU inspectors. For the board, this vitiated eligibility is a sentence that turns every euro received into evidence of guilt, leaving the signatories of the applications facing civil and criminal liability that neither the weight of corporate lobbying nor the social agenda will be able to mitigate before a judge.
