PORTUGAL
The dangerous friendships that sank António Costa
The prime minister ignored the alarms about the
business dealings of Diogo Lacerda Machado, his best man at his wedding, who
was recruited by companies to take advantage of his political influence
Tereixa Constenla
TEREIXA CONSTENLA
Lisbon -
NOV 09, 2023 - 17:39 CET
António
Costa gave a lesson in political ethics on Tuesday. It took only minutes for
the Portuguese prime minister to get into the official car and go present his
resignation to the president of the Republic as soon as a press release from
the Prosecutor’s Office announced that he was going to be investigated by the
Supreme Court. Costa indicated that he did not know what he was accused of, but
considered that the dignity of his position would be compromised if he did not
offer his resignation.
The
judicial operation has sent shock waves through Portuguese politics following
the arrest of two people from his closest circle, his chief of staff Vítor
Escária and his friend Diogo Lacerda Machado for alleged malfeasance,
corruption of elected officials, and influence peddling in connection with four
energy projects. There are three other people under arrest, while the minister
of infrastructure, João Galamba, and the head of the Environment Agency, Nuno
Lacasta, have also been named as suspects.
What is
striking about Costa is that he has not applied the same rigorous ethics to the
people around him. And this relaxed attitude has ended up costing him his
position. Alarm bells had gone off almost from the beginning regarding the
business dealings of his close friend Diogo Lacerda Machado. The relationship
between the two, which began during their days as law students in Lisbon, has
been so close that António Costa asked him to be his best man at his wedding.
He kept him close by even after he became head of the government.
After being
appointed prime minister in 2015, Costa turned to Lacerda Machado to negotiate
the reversal of the privatization of TAP airline, then in the hands of a
consortium led by David Neeleman, owner of Azul airline. In December of that
year, the minister in charge of the airline presented his negotiating team to
the owners of TAP: two secretaries of state and Diogo Lacerda. Two years later,
the prime minister appointed him airline administrator, when the majority of
the capital was already back in public hands.
Costa also
put Lacerda in charge of managing the conflict with victims of the collapse of
Banco Espírito Santo and the dispute at the Portuguese Investment Bank (BPI)
between Angola’s Isabel dos Santos and CaixaBank. This intermediary work was
carried out without any type of official appointment or government contract
(“too much relaxation,” would lament António Vitorino, the Portuguese socialist
who headed the International Organization for Migration) and ended up
generating so much controversy that Costa decided to hire his friend for €2,000
a month.
Diogo
Lacerda Machado, who never joined the Socialist Party, had worked on António
Costa’s team during the latter’s time as justice minister during António
Guterres’ term as prime minister. Starting in 2002, he devoted himself to
private business as an administrator of firms linked to banking, energy and
airlines. When Costa became prime minister, his friend became a constant
presence who seemed more at home in the backroom than in public office.
Coveted by investors
In recent
years the lawyer devoted himself to his private activity. His closeness to the
prime minister and his entourage made him a coveted target for investors in a
hurry. In the case that has led him to spend two nights in a police station,
Diogo Lacerda was allegedly the person who corrupted António Costa’s chief of
staff, Vítor Escária, according to the newspaper Público.
Lacerda was
hired in 2021 by the British investment fund Pioneer Point Partners, which
together with another American company was seeking the construction of a large
digital data storage center known as Start Campus in the southern city of
Sines. The project, which provided for an investment of €3.5 billion to build
nine buildings powered by renewable energy, achieved classification as an
initiative of Potential National Interest in 2022, a year after the signing of
Costa’s friend. The lawyer was hired to “take advantage of his close friendship
with the prime minister and his proximity to Vítor Escária,” according to
sources from the Prosecutor’s Office cited by Expresso.
But the
election of Escária as chief of staff also showed Costa’s relaxation with
respect to his inner circle. Vítor Escária had to resign in 2017 when he was
economic advisor to the prime minister due to Galpgate, a scandal caused by the
gifting of trips and tickets paid by the energy company Galp to politicians to
attend the 2016 Euro Cup in France. Escária and his wife had been two of the
beneficiaries. This did not stop Costa from proposing him as chief of staff in
2020.
Another
controversial signing was Miguel Alves as deputy secretary of state, a post he
held for 55 days after being accused of wrongdoing during his time as mayor of
Caminha. Alves had advanced €300,000 to a businessman with a dubious history to
build an exhibition center that does not exist. This was one of the scandals
that weighed down the first year of António Costa’s absolute majority. In nine
months, 11 secretaries of state left the government, most due to alleged
irregularities or conflicts of interest. The prime minister tried to minimize
the scandals as an accumulation of “casinhos” (little cases) and sometimes
defended these individuals beyond what was considered reasonable by the
president of the Republic, as during the scandal involving João Galamba, the
minister of infrastructure whom Costa vehemently defended despite the unseemly
events experienced in his ministry, which included threats, robberies and
involvement by the secret services.
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