New secretary of State renounces directorship at TAP – to be rewarded with €500,000 lump sum ‘compensation’
Following a series of alleged ‘incompatibilities’ damaging the credibility of Portugal’s PS government, the run-up to Christmas saw new scandal – which even President Marcelo has admitted will leave ‘an impression on the Portuguese people’ (and he wasn’t meaning a good one).
The recently-nominated secretary of State to the Treasury, Alexandra Reis, renounced her position as an executive director of TAP earlier this year – going on to the top job at NAV, the national air navigation authority.
Both jobs are within public companies, but TAP is poised to be privatised.
It is not totally clear what led Ms Reis to quit her position at TAP. The company, in a note sent to the Securities and Markets Commission, referred to her “embracing new professional challenges” (presumably alluding to the presidency of NAV in the wings).
So far so good: except that the move ALSO involved TAP paying Ms Reis €500,000.
TAP is one of the State-owned companies that has caused everyday taxpayers enormous burden in recent years. They have been required to bail the company out to a tune of €3.2 billion – a sum that prime minister António Costa has admitted is unlikely ever to ‘come back’ with any subsequent sale.
Thus why should someone who is leaving on their own volition be paid so handsomely?
‘It’s in the small print, guv…’ is the answer. It is completely legal. Indeed, President Marcelo has said as much, then adding that nonetheless this latest episode “will leave an impression on the Portuguese” (read that as ‘a sour taste’).
According to reports in the tabloid press, Ms Reis could have requested up to €980,000. This because she did not complete the terms of her four-year contract, and therefore could have demanded ‘compensation’ for the entire mandate, not just the two years left to run.
None of the media reports explain why the contract was drawn up to give someone deciding to leave to ‘embrace new challenges’ compensation at all.
The other question is why financially-speaking did Ms Reis move from TAP? She was earning €17,500 a month at TAP, according to reports, and is apparently taking home about half this amount at NAV.
Could it have something to do with the fact that the government wants to sell TAP? That she might not have had a job at the end of the sale process?
The air is filled with indignation.
PSD’s Paulo Reis has said “on top of a series of less perceptible, less perceived, more hasty, even irresponsible, acts (by the PS government) we now have news from TAP – always TAP – of a director who was allowed to leave, and was compensated (…) This half million euros does not belong to the minister”, he told reporters. “It belongs to the Portuguese people (…) TAP is always the result of bad news. It is frightening how decisions are repeatedly rushed through…”
For Bloco de Esquerda, the situation is “an abuse” and in face of the dearth of reasonable explanations, “a scandal”.
In other words, the government “has to give explanations to the country about the payment” made to Alexandra Reis.
PAN too (a party albeit with only one sitting MP) is equally outraged. “It is incomprehensible that someone wants to leave a company with a public stakeholding and take with them half a million euros”, said party leader Inês Sousa Real. “We all wait for the government to break its silence and explain to the country how this has been allowed at TAP”.
Political journalist José Gomes Ferreira rarely minces his words. This latest controversy surrounding a member of government has “all the hallmarks of a scandal”, he told SIC television news. But, referring to the recent interview the prime minister gave Visão magazine: “As far as we can tell, for the head of government these cases and little cases (a play on Mr Costa’s description of ‘taxes and little taxes’) do not merit a second’s worth of attention”.
Adding to the sense of almost farcical impunity, the nomination of Ms Reis involves two ministers already embroiled in various less than transparent episodes, finance minister Fernando Medina, and infrastructures minister Pedro Nuno Santos – both, by coincidence, pretender’s to the PS ‘throne’, due to be vacated by António Costa in 2026.
Thus the country awaits the next installment in a government that is somehow reminicent of the fictional oil-rich Ewings of Southfork ranch in Texas.
Throwing in an impish twist, President Marcelo has mused that even though what has happened is completely legal “there are those who think it would be very nice if the minister dispensed with the TAP compensation” altogether.
A little lost in the developing brouhaha has been how this story ‘came to light’ in the first place. According to Correio da Manhã – which broke it just before Christmas – Ms Reis was not the source; and TAP told the paper’s journalists that the terms of the rescision agreement with Alexandra Reis were “confidential”. So who told Correio da Manhã about this ‘fat cat’ payment, and what was their purpose?