Home News How institutional complacency in Portugal’s establishment has made it the fifth most corrupt country in Europe

How institutional complacency in Portugal’s establishment has made it the fifth most corrupt country in Europe

Published on 06/02/2020

When one conjures up an image a corrupt nation what often comes to mind are images of a poor or developing country. However, Portuguese authorities have proven time and time again how corruption can be equally rife in developed countries, and it is.

One might immediately have thought about Brazil, with its huge Lava Jato corruption investigation, or the dubious relationship of drug cartels with the government in Mexico, with tentacles reaching across most Latin American countries and reaching out as far as Africa. Yet, a country that illustrates how corruption survives in the developed world is Portugal.

The complacency at the heart of the Portuguese system has resulted in making the EU member a hub for financial crimes. Nowhere in Portugal’s sphere of influence is this more obvious than in its tortured relationship with the former African colony of Angola.

The Lisbon elite’s hungry desire for wealth has opened the gateway for the wealthy in Luanda to wreak havoc for decades. Having embezzled Angola as a colony for 400 years (1575 to 1975), Portugal today aids and abets the country’s best efforts to plunder itself.

An Ernst & Young survey found that 83% of Portuguese people believe that corruption and bribery were widespread in the country, the fifth highest in Europe according to the study. In 2019, Portugal ranked below the European Union (EU) average in Transparency International’s Corruption Perception Index.

Former Portuguese Prime Minister Jose Socrates, who held the post from 2005 to 2011, acts as a poster boy for the trend, he was arrested for corruption, money laundering and tax evasion after leaving office. He was found to have €20 million in a Swiss bank account, and to have brought this money back into the country via a law called “Extraordinary procedure of reliant regularisation.” This law was in effect a tax evasion pardon – a law Socrates personally passed in 2009. Even by dire global standards, this was considered a representation of Portugal’s internal conflict with its corrupt self.

Moreover, the “Golden Visa” scheme, which gives fast-tracked residency permits in exchange for a one-time investment has fared no better. The scheme, which has a handful of similar counterparts in other EU countries, has lately been the object of scrutiny by the European Parliament as is has become a magnet for suspicious individuals the world over to use the EU as a safe haven to launder their money.

Returning to the focus on the Luso-Angolan relationship, following the 2008 financial crash, Portugal set about attracting foreign cash. Figures from the Bank of Portugal showed, for instance, that Angolan investments in Portugal increased from €645 million to €1.53 billion between 2010 and 2014. Sectors at the highest risk of corruption were the first to be targeted. The real estate sector, the banking industry, and the media all saw huge investments. Austerity had eaten €29 billion from Portugal’s economy, and Lisbon was happy to plug the gap with other countries’ shady money.

So came the unspoken sweetheart deal between Portugal and Angola’s elite. The narrative went as follows: Angolans came to Portugal for higher education and tourism, and Portuguese nationals went to Angola chasing higher salaries and to escape from the European restrictions to a new El Dorado.

A number of Portuguese politicians took every chance they could to cash in on the gold rush. Between 2007 and 2014, 27 former Portuguese ministers happened to find themselves in comfortable positions on the boards of Angolan or Angolan-dominated companies. Over 100 others found their way to profitable positions within the Portuguese economy, backed by Angolan capital.

In view of this trend, in 2013 the OECD released a statement revealing that: “Portugal’s enforcement of its foreign bribery laws has been extremely low. Not a single prosecution has resulted from 15 allegations of Portuguese companies bribing foreign officials in high-risk countries. Several investigations have been closed prematurely. Some allegations were not investigated at all.” Despite this and numerous other warnings over the years, the corruption has not been stopped from spreading.

Transparency International, an NGO, added: “The real obstacle that needs to be overcome in order to improve relations between Angola and Portugal is the corruption and complicity that has allowed Angolan officials to bring shady money into the Portuguese economy – including at-risk sectors such as the banking system and real estate.”

By continuing to allow corruption within the state, and also in international relationships, Portugal is undermining its own institutions, as well as its international reputation, to protect not only its own corrupt politicians, but also another country’s corrupt politicians. At no point in this long-running saga of scandals has Portugal thought of the impact that its actions are having on its own people, as money trumps empathy in this scenario.