Fernando Medina
Fernando Medina was flanked by Infrastructures minister João Galamba when he gave last night's press briefing. Image: Nuno Fox/ Lusa

TAP CEO and chairman dismissed in (still choppy) wake of golden handshake row

Former director, ex-Secretary of State has to pay back bulk of €500,000 handshake

Following months of controversy, obfuscation and various versions of ‘the truth’, the Portuguese government has dismissed the CEO of flagship airline TAP, along with the chairman of the board.

The reason – hanging in plain sight since last year – was the €500,000 ‘golden handshake’ agreed with former TAP director Alexandra Reis as the way of relieving the company of her services.

That the handshake was agreed without any recourse to procedure, in a company that was surviving for the sole reason that taxpayers have been press-ganged into supporting it was one reason for the developing brouhaha. Another was the fact that Ms Reis went on to be offered not one but two plum postings in government – with all concerned professing to know nothing about her severance windfall.

When the IGF (general inspectorate of finances) was finally called in, the lurid, shameful details had already been splashed over national media.

Now, finally, after weeks of paper shuffling, it has become clear ‘none of this should have happened’; the people who sanctioned it at TAP (CEO Christine Ourmières-Widener, and chairman of the board Manuel Beja) are ‘out’; Ms Reis has to pay the bulk of her whopping severance deal back, and the government trusts that ‘this is an end to the matter’ (which of course it is not…)

For a start, in last night’s press briefing on this latest development, finance minister Fernando Medina said: “There will be no payment of compensation” to the outgoing managers. Subsequent reports suggest not only that there will definitely be ‘deals arranged’, but that certainly Ms Ourmières-Widener will be taking legal steps to assure what she believes to be her rights in this dismal affair.

Alexandra Reis, too, has said she does not agree with the IGF conclusion – while political ructions are already reverberating.

What exactly the government said:

According to Fernando Medina, last night’s sackings were “necessary decisions for the smooth running of TAP” and for a ‘turning point’ in the tortuous handshake case.

A new CEO has been named: Luís Silva Rodrigues (currently running Air Açores, SATA, which is in the process of being sold), and for the sake of convenience he has been given the title of both dismissed TAP bosses – CEO AND chairman of the board.

In the words of Mr Medina, it is “essential to recover that bond of trust between the country and the company. TAP is not just any company, it is a special company in our country, due to its size and economic importance. We felt that it was important to mark the turning of a new page in terms of stabilisation”.

But a little like most government pronouncements, very little of it appears to have washed.

Within a very short time opposition parties were reacting.

PSD vice-president Miguel Pinto Luz said there are still “many clarifications to be given”, thus the party will insist on hearing both Ms Ourmières-Widener and Manuel Beja in the parliamentary commission of inquiry already underway.

“This will be the stage par excellence to know the truth and the PSD wants to know the extent of this debacle. The PSD assumes all responsibility for the past but demands that the government, Fernando Medina and António Costa, assume theirs,” Pinto Luz told Lusa.

For the PSD, the illegality of the compensation paid to Alexandra Reis “cannot be considered just a problem of TAP’s internal affairs, it is a political matter and the direct responsibility of those in charge of the company”.

“We will have to fully clarify Fernando Medina’s reasons for (months later) choosing Alexandra Reis as his secretary of state for the treasury,” he added, considering that yesterday “was another unhappy day for TAP“.

PSD leader Luís Montenegro voiced what most people have already concluded: the government is using the two TAP bosses as scapegoats.

“The government has removed the chairman of the board of directors and the chief executive of TAP from office, and is trying to find scapegoats for a political responsibility that is namely that of the finance minister,” he told reporters late last night.

If he were prime minister, he would be sacking Fernando Medina, he said – stressing now IGF needs to “look deeper into the situation” of TAP to see if there are more “similar cases” to that of Alexandra Reis (which there may well be…).

“I think the finance minister is increasingly diminished in his political authority and his credibility to exercise the function, but evidently, it is up to the prime minister to make this assessment,” concluded Montenegro.

Mr Medina “cannot forget that he also signed the order appointing .. Alexandra Reis to NAV (the air traffic regulator, where she took over after TAP) and it was he who invited her to be secretary of State of the Treasury of his own ministry” a few months later.

And, “if Fernando Medina had not invited Alexandra Reis to be secretary of State for the Treasury, this situation, this whole plot, would perhaps not even be public knowledge…”

Other political voices, like Mariana Mortágua for Bloco de Esquerda, return to the niggles over how could Fernando Medina have decided to take on Alexandra Reis without being aware of her whopping golden handshake?

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