Portuguese PM António Costa Resigns Amid Corruption And More than €75,000 In Boxes Of Wine

Police search socialist prime minister’s official residence in investigation into alleged corruption

Portugal’s socialist prime minister, António Costa, has resigned hours after prosecutors examining alleged corruption involving lithium and “green” hydrogen deals announced that he was under investigation and police searched dozens of addresses, including his official residence and the environment and infrastructure ministries.

Speaking on Tuesday afternoon after two emergency meetings with Portugal’s president, Marcelo Rebelo de Sousa, Costa said he had submitted his resignation, adding he had a “clear conscience” and “complete trust in justice” and how it worked.

“The duties of prime minister are not compatible with any suspicion of my integrity,” he told a press conference. “In these circumstances, I have presented my resignation to the president of the republic.”

osta, who won a third consecutive term as prime minister after his party secured a surprise absolute majority in a snap general election in January 2022, said he had stepped down despite having been “completely willing to dedicate myself with all my energy to fulfilling the mandate until the end of this legislature”. He also said he would not be running in any forthcoming elections.

His announcement came after the Portuguese press reported that at least five people had been detained, including Costa’s chief of staff, Vítor Escária, and Costa’s friend, the business consultant Diogo Lacerda Machado.

The public prosecutor’s office then revealed that Costa himself was being investigated, adding the prime minister’s “name and authority” had been cited by suspects questioned during the investigation.

Rebelo de Sousa confirmed that he had accepted Costa’s resignation and would be meeting party leaders on Wednesday. The president will then have to decide whether to dissolve parliament and call an election, or whether to allow Costa’s socialists, who have a majority in parliament, to form a new government.

In January this year, prosecutors said they were looking into allegations of corruption relating to lithium and hydrogen projects but did not name any suspects.

The investigation into the alleged “misuse of funds, active and passive corruption by political figures, and influence peddling” involves lithium mining concessions in the north of the country. It is also investigating a hydrogen production project and datacentre to be built by the company Start Campus in Sines, a town about 60 miles south of Lisbon.

In a statement released on Tuesday, prosecutors said 42 premises had been searched by police and staff from its Criminal Investigation and Action Department.

It confirmed that the addresses searched “in order to identify and seize documents and others relevant evidence” had included “spaces used by the head of the prime minister’s office”, the two ministries and the Sines town council.

Citing flight risk and the possibility that illegal activity could continue, prosecutors said arrest warrants had been issued for Costa’s chief of staff, the mayor of Sines, and two executives at Start Campus.

Prosecutors also said that Portugal’s infrastructure minister, João Galamba, had been indicted as part of the investigation, as had the president of the executive board of the Portuguese Agency for the Protection of the Environment (APA).

In May, the APA approved a mining project for lithium, an essential metal for the manufacturing of electric batteries. A second project was given the green light at the start of September.

Earlier this year, Rebelo de Sousa told the government to clean up its act after a separate scandal erupted around the state-owned TAP airline. The scandal, known as TAPgate, led more than a dozen ministers and secretaries of state to leave their positions.

The controversy began almost a year ago after revelations that a TAP director was given a €500,000 (£435,000) severance package. After leaving TAP, Alexandra Reis was appointed head of the state-run air traffic control company NAV. Then in early December she became junior minister at the Treasury.

Although Costa’s former allies in the Communist party and the Left Bloc had called for the facts to be investigated before any conclusions were drawn, other parties issued swift calls for a new general election.

“There were no longer conditions for António Costa to continue in office,” said Rui Rocha, the leader of the Liberal Initiative party. “I don’t believe there is any other solution than the dissolution of the assembly of the republic and elections so that the Portuguese can have their say.”

André Ventura, the leader of the far-right Chega party, also called for a fresh poll, saying “any other solution will delay the country’s political process”.

More than €75,000 in cash found in office of aide of Portugal’s ex-PM in boxes of wine

Days after Portugal’s PM António Costa resigned amid a corruption investigation, police found €75,800 in cash in his chief of staff’s office, hidden between books and wine crates.

The cash, in Vítor Escária’s office in the prime minister’s official residence, was split between envelopes and hidden on different shelves between books and in the wine crates.

Escária claims the hidden money is for services in Angola that were paid for in cash, but his explanation raises a problem of tax fraud, says CNN Portugal journalist André Carvalho Ramos.

“Books are our greatest asset”, Susana Peralta, an associate professor at Nova School of Business and Economics, wrote ironically on X.

Another Lisbon resident wrote, “Let the first stone be cast by anyone who has never stashed 75,800 euros inside books and wine boxes! Isn’t this amazing?”

“The lawyer who can come up with a good explanation for this will deserve an Oscar for the most creative argument,” added Joao Villalobos, a communications consultant.

The searches took place Tuesday afternoon, at the time police arrested Escária.

Investigators did not seize any material in Escária’s office directly related to PM Costa.

They will continue to analyse digital evidence, including a digital agenda, e-mails, text messages and WhatsApp messages, in coming weeks.

Police investigators have released telephone transcripts appearing to incriminate senior officials in Costa’s administration.

Only when investigations have concluded will police be able to say if the money plays a role in the corruption allegations which caused António Costa to resign as prime minister on Tuesday.

Vítor Escária previously served as lead economic advisor under Costa and former Socialist Party PM José Sócrates.

An economist and university professor by background, Escária is not a household name but was an important figure within the Socialist Party of Portugal.

This is not Escária’s first brush with scandal. Previously he had his trip to Euro 2016, held in France, paid for by a company, Galp. He managed to avoid trial by paying a fine.

Before, while serving under José Sócrates, he testified in another corruption scandal,”Operation Marquês,” but was not accused of any crime.

A small quantity of hashish was seized at the home of Infrastructure Minister João Galamba, but it was within the legal value allowed for personal consumption, says Portuguese news outlet Público.

Police also seized Galamba’s mobile phones and computers.

The anti-corruption Department of Investigation and Criminal Action (DCIAP) has been investigating corruption in the lithium, hydrogen, and data centre sectors in Sines.

As well as Escaria, police arrested the Socialist Party mayor of Sines, two directors of the “Start Campus” company, and a lawyer and consultant working for the company.

They also named Galamba as a suspect, alongside Nuno Lacasta, chairman of the board of the Portuguese Environmental Agency.

Their lawyer is Diogo Lacerda Machado, a personal friend of Costa who served as witness at his wedding, Renascença reports.

Machado also served as Secretary of State for Justice from 1999 to 2002, during António Costa’s tenure as Minister of Justice in António Guterres’s government.

In recent years, Machado has informally represented the PM in sensitive negotiations, including with Portugal’s airline TAP, the Espírito Santo Group, and in meetings between Isabel dos Santos and the Catalan CaixaBank.

The two arrested businessmen from “Start Campus” are Afonso Salema, its executive chairman, and Rui de Oliveira Neves, its legal and sustainability director.

Between 2013 and 2021, Neves held management positions at Galp.