How it's done

Imagine, just for fun, that you're a political bigwig and you want to sell a lucrative piece of public property to a pre-selected group of investors, while doubling your usual cut. How do you do it without showing up on the radar screen? First, you hire a friendly adviser to oversee the tender process. Your investors then secretly agree with another set of like-minded individuals on spreading the project's risks and rewards. They then jointly form a special purpose vehicle with bearer shares for submitting the winning bid. Some of them also submit a second bid that, on the surface, has no relation to the first. Now comes the tricky part. The adviser needs to eliminate all but one of the other bidders, and this third bidder needs to be a heavyweight not known for highballing. It's then critical to learn how much this third bidder is offering, so one of his advisers is bribed. The rest is as easy as pie. Too complex and far-fetched to be believable? That's why it works so beautifully. [Czech Republic real-estate development developers SPV SPE]