Golden Visa corruption scandal continues to rocks Portugal

Golden Visa corruption scandal continues to rock Portugal

Shame is what the ex-Minister for Internal Administration must have felt when he handed in his resignation on Sunday, after the Golden Visa corruption scandal broke, leading to a number of high-profile arrests. Admittedly saying he had nothing to do with the case, Miguel Macedo (pictured) felt his “authority and credibility” had been “diminished”.
As the Golden Visa corruption scandal reveals more of the rot-at-the-top in Portugal, the real question, highlighted by Euro MP Ana Gomes, is how many non-European criminals are now freely circulating in Europe?
This is the hugely embarrassing issue at the root of the latest multi-million euro “vergonha” (shame) for the coalition government.
While repercussions cut a swathe through Portugal’s corridors of power, international observers are taking bets on how much more scandal this country can take.
Alarm bells began sounding eight months ago when a Chinese man wanted in his own country for fraud was found to be living the high life in Cascais on a newly-issued Golden Visa. With Interpol hot on his tail, the query on everyone’s lips was how could immigration scans have missed this vital piece of information? How could Portugal extend a prized ‘gateway to Europe’ to someone on the run from justice?
Last week, the answers began bobbing to the top of a veritable cesspool of high-level intrigue.
Immigration boss Manuel Jarmela Palos was among 11 people rounded up and taken in for interrogation in a nationwide series of early morning raids last Thursday (November 13).
By Tuesday (November 18), the 11 were all still being heard and waiting to hear the terms of their bail while Minister for Internal Administration Miguel Macedo had handed in his resignation (admittedly saying he had nothing to do with anything).
By then it was clear that Palos had ‘fast-tracked’ visas for Chinese, Angolans, Russians, Brazilians, Libyans and South Africans as “a favour to those above him”.
Central in the scandal is the notary institute boss António Figueiredo. Indeed Portuguese newspapers are saying Figueiredo is the key to the whole labyrinthine network of corruption.
But perhaps even more shocking are the comments made by Deputy Prime Minister Paulo Portas as the scandal broke. Portas has been the Golden Visa programme’s great ambassador – constantly stressing the significance of the investment the scheme has brought (to be fair, it has brought over a billion euros into the country and saved the property sector from the worst doldrums for years).
Talking to Expresso on Friday, Portas effectively said: “We need the money! If we didn’t issue these visas, other countries would.” His actual words were: “Portugal is competing against around 10 other European countries with policies for attracting investment related to the authorisation of visas… Therefore it is important to separate the wheat from the chaff: any investment we miss, others will capture, and the positive consequences for the economy will benefit other countries instead of Portugal.”
As Euro MP Ana Gomes has pointed out on numerous occasions, this is the problem. ‘Poortugal’ – like cash-strapped Greece, Spain, Latvia and Hungary, where similar incentive schemes operate – is so desperate to attract monied investors, it is not allowing itself to be choosy.
Talking to the BBC earlier this year, she said: “There might be all sorts of corrupt and even criminal organisations behind those who are benefiting … It might simply be another very dangerous avenue to import additional corruption and criminality into the EU.”
The arrest of the Cascais-based Chinese man by Interpol last March was proof of Gomes’ fears, and it was one of the key events that prompted the PJ-led investigation dubbed Operation Labyrinth.
As Labyrinth tapped into key suspects’ phones, the extent of the “Golden Web” began to emerge.
Figueiredo, backed by three others at the IRN (notary and registrations institute), is understood to have been helped not only by Palos, but by the secretary general of the Administration of Justice Maria Antónia Anes.
Anes’ daughter and Figueiredo’s son have also been taken in for questioning, both believed to have fronted businesses to attract clients – mainly from China.
And this is where the next key event that alerted investigators came in.
One of the ways backhanders were organised appears to have been with the setting up of ‘bogus’ promissory purchase contracts which ‘fell through’ after large sums of money had passed hands.
According to Correio da Manhã (which has run a series of exclusives on the scandal), “the authorities are studying these broken promissory contracts – and they have all been apprehended from the various estate agents where they were undertaken.
“They could be relevant to quantify the value of the bribes which are estimated to have come to millions.”
And they will no doubt implicate other third parties involved in this Ariadne’s thread of palm-greasing.
CM reported last week that bribes of 10% on each half-million euro transaction were commonplace. How many people received 10% is another question. Immigration boss Palos has said he did everything “as a favour” and received no money in return, but newspapers have already dubbed him “Mr 10%”.
As for Figueiredo, an investigation led by Jornal de Notícias points to “thousands of euros” snaffled away in a bank account opened for him by his cousin in his home town of Tabuaço.
Phone taps on Figueiredo have also implicated former security information service chief Antero Luís, caught trying to negotiate a property sale at a vastly inflated price. It is not certain whether this was another case of where a “bogus” promissory contract was exchanged. CM reports that the potential clients visited the property, but the deal later fell through.

Bottles of wine and football favours

As details continue to emerge, typically Portuguese favours involving bottles of wine and requests for football tickets have been highlighted – unfortunately implicating Miguel Macedo though he has denied any incorrect involvement over the issuing of Golden Visas.
It was because of certain friendships, however, that Macedo ‘fell on his sword’ on Sunday, tendering a resignation that Passos Coelho was reluctant to accept.
The Charlemagne blog in the Economist commented on Sunday: “The case is a deep embarrassment for Prime Minister Pedro Passos Coelho, whose government had trumpeted the golden visas as a resounding success. The scheme has now cost him a key minister less than a year before a general election… The investigation comes only months after the collapse of the Espírito Santo business empire in one of Europe’s biggest financial failures for years. Both cases are likely to prove severe tests of Portugal’s slow-moving justice system.” The comment continued that “the golden visa investigation shows, the aftershocks” of the euro crisis are “far from over”.

Estates agents retaliate

Illustrating what observers see as Portugal’s blinkered focus on investment at any cost, the country’s estate agents association APEMIP issued a statement on Tuesday lamenting the fact that “the course of a normal police investigation is being transformed into an unjustified and unjust attack on programmes to capture foreign investment … that have revitalised the Portuguese property sector”.
Contending that the sector should not be used as a “scapegoat for political battles”, APEMIP affirmed that the Golden Visa programme was not an “expedient facilitator for money laundering and other crimes”.
Using languages reminiscent of Portas’ “wheat from the chaff” analogy, APEMIP warned against “confusing a tree for a forest” and said it “trusted in the Portuguese justice”.

Government reshuffles

Needless to say, time may well be called on Portuguese Justice as political commentator Marcelo Rebelo de Sousa suggested in his TV slot on Sunday.
Suggesting this was a perfect moment for a government reshuffle, Rebelo de Sousa said Passos Coelho would be wise to use the occasion to “make changes” in Education and Justice.
Considering both ministers (Nuno Crato – Education and Paula Teixeira da Cruz – Justice) have been in the news for the worst possible reasons over the last few months, this latest political embarrassment may well see them shuffled well off the scene.
But as opposition MPs are calling for early elections – and demanding an end to the Golden Visa programme – the ramifications of this latest disgrace are being felt across Europe.
As the Economist columnist points out: “Besides casting suspicion on golden visas as a potential source of corruption, the detention of top immigration and border control officials raises the possibility of a serious breach in security.”


After five days of questioning, Judge Carlos Alexandre has ruled on the bail terms, or otherwise, of all those detained in the police swoops last Thursday. António Figueiredo and Chinese businessman Zhu Xiaodong remain behind bars, as does immigration services boss Manuel Jarmela Palos, former justice administration secretary Maria Antónia Anes and Portuguese businessman Jaime Couto Alves. These last three are expected to be released for house arrest very shortly. Two other Chinese defendants have been ordered not to leave the country and post bail (€250,000 and €500,000 respectively), while three IRN employees have been released without bail but are prohibited from returning to their duties.
By NATASHA DONN [email protected]
See comment by security expert David Thomas: