Helping the medicine, and politicos, go down

He first earned a reputation in his native Galicia for his generosity toward politicians of all stripes. Now he is a household name around the entire country thanks to his willingness to tell the police all about those same politicians following his arrest as part of Operation Champion, the latest scandal involving corrupt public figures and business people stealing public money.

It was Jorge Dorribo's generosity during the November general elections that effectively put an end to any hope of former Public Works Minister José Blanco winning the northwestern regional government for the Socialist Party, as well as of several other politicians renewing their seats in Congress. Dorribo, a self-made businessman and owner of a pharmaceutical company, despite having no knowledge of either chemistry or medicines, is largely responsible for upsetting the political scene during the last days of the Socialist Party administration. Through his lawyer, Ignacio Pelaez, he leaked a series of rumors - something Pelaez has denied - that Blanco, then still the Socialist Party's number two, received illegal payments. As a result of the accusations, Blanco will be appearing before a Supreme Court investigating magistrate to account for his actions on Wednesday.

A series of leaks over the last few months - despite the case being sub judice - has revealed that Dorribo had been paying out bribes left, right and center: in Blanco's case, an alleged 400,000 euros in cash over several months. Dorribo claims he met with Blanco in his official government car, asking him to act as an intermediary to claim subsidies from the Economy Ministry, along with a license from the Health Ministry that would give him a monopoly on single-dose drugs. If the request was made, neither the subsidies nor the license ever materialized. Nevertheless Dorribo claims he has evidence, including cellphone messages, emails, and cash withdrawals from banks. The payments were allegedly made through Blanco's cousin, Manuel Bran.

On Wednesday Blanco will be appearing before Supreme Court investigating magistrate José Ramón Soriano, the man in charge of Operation Champion. As a member of Congress, Blanco enjoys immunity from prosecution. The Socialist Party says Blanco himself asked to be able to give testimony, even before the Supreme Court had even begun proceedings to ask him to do so. Blanco denies "having received money in exchange for political favors," but confirms he did indeed meet with Dorribo in his official car, shortly before the pair of them went for a meal attended by senior figures from the business community in Galicia. Fifteen people have been arrested in connection with Operation Champion, including Dorribo himself and two high-ranking officials from Igape, the investment agency run by the Galician regional government.

So far, the only information to emerge regarding the case has been through the leaks presumably arranged by Dorribo. They raise many questions. Does the businessman really have any proof? Why did he only decide to spill the beans last August, three months after he was arrested? For the moment, his cooperation has earned him bail, as well as diverting attention from his own alleged wrongdoings.

Dorribo, who made his fortune in the markets that the big pharmaceutical players saw as too small, has passed from being a model entrepreneur to the head of an alleged network that illegally won subsidies by bribing politicians across the spectrum. His precipitous downfall has dragged several of them down with him, for the moment.

Dorribo's career began 25 years ago in a small office in the Galician town of Lugo. Then aged 26, he and two friends invented and patented a leather cream called Nupel.

His skill as a salesman, his ability to get close to people in power, his imagination, and his instinct to see opportunity where others didn't, along with his love of spending money, took him far in a short time. His efforts made the leather cream a success. He toured Spain's race tracks selling the cream to bikers for their jackets, he then cut a deal with Inditex that would see the company provide a sample with all Zara leather fashion goods, finally winning a contract with El Corte Inglés to sell the product.

In 1993, Dorribo and one of his partners, Arsenio Méndez, decided to move into cosmetics. They started out as distributors, commissioning a company based in Asturias to produce lipsticks and eye shadow, along with some 200,000 makeup-removing cleansing cloths. They managed to find a market in Latin America and, four years later, decided to try their hand in the pharmaceuticals market. Again, they didn't manufacture their products, buying them instead from a laboratory in Barcelona and then packaging and labeling them back in their native Lugo.

Dorribo bought up the rights on drugs that were in demand, but that the multinationals had replaced with new products. The big players were focused on the wealthy nations, while the Galician businessman was content to keep his eye on emerging economies. There was plenty of money to be made from the crumbs left by the major league pharmaceuticals.

In Europe, their main customers were hospitals and retirement homes, too small for the big laboratories; in Africa and South America, they also found ready markets for drugs that had long since ceased to be sold in Europe, in some cases as long as 40 years ago. But with time, and a great deal of traveling, Dorribo gradually came to realize where the holy grail of pharmaceuticals lay. In many developing countries, patients cannot afford to buy an entire bottle or pack of a medicine. At most, they can pay for a single tablet or dose each day. Sold in this way, they end up being more expensive than buying a bottle proportionately. The single-dose market would be Nupel's, and it would be based in Lugo and Andorra. All that was required were the necessary permits.

It is still not clear if Dorribo's business plans had any basis in reality. In 2007, he was telling anybody who would listen about his plans to open a 35-million-euro, 33,000-square-meter plant in the United Arab Emirates to produce and distribute medicines throughout the Middle East. People in Lugo still talk of the day Sheikh Mohammed al Qubaisi, the head of the UAE's Economy Ministry, along with its business and investment head, Saleh al Mansouri, were met by Francisco Cacharro, the Popular Party senator for Lugo province who has stuck by Dorribo even in times of adversity.

Cacharro was the first senior politician with whom Dorribo managed to make friends - the two later did business together. But in public, Dorribo has always insisted he made his way without help from friends in high places, saying the men and woman who ran the regional government gave him the cold shoulder, while countries such as the UAE, Brazil, and Belarus rolled out the red carpet when they learned of his investment plans. But it was Cacharro who opened the doors of the regional government to Dorribo, which in turn enabled him to make headway into much of Latin America, including Cuba, where he sold medicines and bought antiques. Dorribo also knew he had to broaden his horizons beyond Galicia, as well as assure a future for himself in the region should the Socialist Party ever take over the reins of power there. So he started to woo José Blanco, organizing a business lunch for him in Lugo, attended by former minister Francisco Caamaño. He even courted the left-wing Galician nationalist BNG party, whose Fernando Blanco held a ministerial position in the regional administration.

After the PP retook Galicia in the 2008 elections, and Fernando Blanco lost his cabinet post, Dorribo employed his former press officer to manage his business in Andorra.

Operation Champion - which first hit the headlines in May 2011 when a Lugo provincial court ordered the arrest of several officials at the regional government of Galicia's credit institute - would, several months later, bring in former Public Works Minister José Blanco, Fernando Blanco, and another member of the Galician regional parliament, Pablo Cobián of the Popular Party. The last two have since had to resign their seats. Dorribo says he paid Cobián to arrange a meeting with the head of the regional government, Alberto Núñez Feijóo. Two months after that interview, the regional government arranged a credit for 2.9 million euros, but that eventually did not come through.

During his brief, but meteoric career, Dorribo's company, Nupel, was selling pharmaceuticals in 27 countries. With a workforce of around 50, the company's turnover reached 48 million euros in 2009, all of which translated into hefty restaurant bills, generous gifts, luxury cars and motorcycles that prompted astonishment among the townspeople of Lugo. Needless to say, there were also yacht trips for all and sundry. That's the kind of image he liked to project: generous to a fault.

There were those, even at the time, who said it couldn't last. The first signs of trouble came in 2010, when Dorribo was still funding a rally driving school managed by Luis Moya, a former driver with world champion Carlos Sainz. Unpaid bills began to mount up, and shortly before tax and customs officers raided the company's head offices, Dorribo got rid of the rally team, aware that he could no longer foot the bills.

The subsequent collapse of Nupel has left a still unknown number of pharmacies in the lurch, which are now bringing legal action. Dorribo had initially come to their rescue, helping them set up shop and taking over their debts. In return, he would pay a monthly wage, along with a small annual bonus. In return, they were obliged to ask their suppliers for huge deliveries of drugs (with the corresponding discounts) that it would be impossible to sell, and Nupel would periodically buy up on the cheap. Pharmacists in Dorribo's pay would be given a cut. The regional government is still trying to locate these errant pharmacists as part of its investigation into what happened to the medicines, suspecting they might have been intended for resale in developing countries as part of Dorribo's single-dose business idea.

Nupel and its affiliates are just the most visible part of a complex network of businesses that Dorribo has established since he began making serious money from out-of-date pharmaceuticals. Some 43 companies are registered by him, some of them since closed down, in which he occupied a senior post. They range from a company managing car parks and a radio station, to a real estate firm and an aluminum windows manufacturer; from a car showroom and a brand of mineral water, to a yacht builder.

There are those, such as Francisco Cacharro, who say that although Dorribo is down, he is far from out, and will make a comeback. The future of former Public Works Minister José Blanco will depend on whether he can convince the Supreme Court that his alleged involvement in Dorribo's network is pure invention, the product of the fevered imagination of a man who, for a few years at least, was seen as a model entrepreneur.