Barroso says he knew nothing of illegal party funds

BRUSSELS, Aug 29 (Reuters) European Commission President Jose Manuel Barroso today said he knew nothing about illegal funding of his party in Portugal which took place shortly before he became the country's prime minister in 2002.

Some members of the European Parliament had asked Barroso whether he knew about payments made by a building firm to his Social Democrats and whether the company received any preferential treatment in return.

''I had no knowledge of and obviously no involvement in this affair or in any other issue directly related to the funding of the party,'' he said in a letter to European Parliament President Gert Poettering.

Barroso was party leader from 1999 and became prime minister in 2002 but left those posts to head the European Commission in 2004.

He noted in his letter that the party's former secretary-general, Jose Luis Arnaut -- number two to Barroso in the party leaadership at the time of the payments -- had assumed political responsibility for the affair.

He also recalled that the family of the state secretary for public works at the time, Jose Luis Vieira de Castro, had denied that the construction firm had received any favour from the Barroso-led government.

''I would also like to express my personal consideration for Mr Arnaut and Mr Vieira de Castro, as well as my confidence in their personal integrity,'' Barroso said.

Portugal's constitutional court convicted building firm Somague in June of paying the Social Democrats a sum -- 233,000 euros -- exceeding the legal limit for private donations to political parties in Portugal.

The cash was to pay for the services of a public relations company.

Political party funding in Portugal has long been a cause of concern and often involves building firms and local governments.

Reuters SY GC2031