Francesc Badia i Dalmases – Portugal’s Complacency Towards Corruption

When German imposed austerity damns euro member nations to immiseration, they turn to crime, and that seems to be endemic these days.

Francesc Badia i Dalmases is editor of DemocraciaAbierta. A political analyst, an author and a publisher

Cross-posted from Open Democracy

The notion of a corrupt nation often conjures up images of a poor or developing country. But corruption can be equally rife in developed countries and it is.

Corruption is widespread and is deeply embedded in the economic and political system worldwide. But the mechanisms of combating corruption, beyond having a sound and independent judiciary, depend very much on the strength or weaknesses of the institutions as well as on the existence of political will.

One would immediately have thought about Brazil, with its huge Lava Jato (Car Wash) scheme and the Odebrecht scandal, with tentacles affecting most Latin American countries and reaching out as far as Angola in Africa. Yet, a country that illustrates how corruption also affects the developed world is Portugal.

The complacency at the heart of the Portuguese system as well as its prejudiced attitude towards people of colour, have combined to make the former colonial power a hub for financial crimes. Crimes that are depriving some of the world’s poorest people of their wealth.

Nowhere in Portugal’s sphere of influence is this more obvious than in its tortured relationship with the African nation of Angola. Lisbon’s greedy demand for riches has allowed Luanda to wreak havoc. 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. On top, it can be argued that there is a clear link between Portugal’s permissiveness of corruption and its racism.

Corruption at home

A 2015 Ernst & Young survey found that 83% of Portuguese believed that corruption and bribery were widespread in the country. In 2019, Portugal ranked below the European Union (EU) average in Transparency International’s Corruption Perception Index.

Former Angolan Prime Minister Jose Socrates, who held the post from 2005 to 2011, 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 to be a massive scandal.

Portugal’s ‘Golden Visa’ scheme, which gives fast-tracked residency permits in exchange for a one-time investment, fared no better. The scheme, which exists in many countries of the EU, has been lately the object of scrutiny by the European Parliament as is has become a magnet for kleptocrats the world over to use the EU as a safe haven and launder their money.

The most common path to residency has been investing in property. Portuguese officials in charge, however, inflated the price of real estate, allowing quicker access for rich foreigners. They also shared cuts themselves, all the way from government ministers to local officials. As a consequence, it can be argued that corruption in Portugal is institutional.

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. In 2013 alone, Portuguese expats in Angola sent back over €304 million to their struggling families back home.

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 sucked €29 billion out of Portugal’s economy, and Lisbon was happy to plug the gap with other countries’ shady money.

So came the unspoken sweetheart deal between Portugal, its media, and Angola’s elite.

The narrative went as follows: Angolans came to Portugal for higher education and tourism, and Portuguese nationals went to Angola for higher salaries and to escape from the European malaise to a new El Dorado. At the height of this reversal of fortunes, a Portuguese comedian in black face ran in and out of Lisbon’s most elite stores shouting “I’ll buy it all!”

Less comic, however, were Portuguese politicians taking 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 the scale of this trend, 2013, the OECD released a censorious statement saying: “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.”

Corruption abroad

The lengths to which Portugal has gone to protect its international racket are as sensational as the scale of corruption itself. Take former Angolan Vice President Manuel Vicente, for example. Vicente was VP from 2012 to 2017 and, before this, head of state-owned oil company Sonangol. He is a close advisor to current President Joao Lourenco. While in charge of Sonangol, Vicente bought a luxury apartment in Portugal using USD 245,000 of suspected Sonangol funds. He then paid another USD 850,000 to prosecutor Orlando Figueira to drop the case. He also offered Figueira a comfortable position in an Angolan-owned bank. The scheme was exposed, and an investigation was opened in 2013.

Transparency International hailed the start of Portugal’s anti-corruption investigation into Vicente as an “historic date.” Lourenco was outraged, calling Portuguese attempts to try Vicente in Lisbon “an offense” and “neo-colonialism.” Luanda threatened to end the financial flux to Lisbon.

To Portugal’s humiliation, Transparency International was ahead of the game. The NGO noted: “Regrettably, such pressure has proved effective with Portuguese politicians in the past. When the first news of investigations into Vicente broke in Portugal back in 2013, then Portuguese Foreign Minister Rui Machete apologised for the judicial inquiry in an interview on Angolan national radio, trying to reassure the then vice-president that nothing would come of it.”

Transparency International 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.”

Within a few months, Portuguese courts allowed Vicente to be tried in Luanda, despite him having immunity in Angola. Transparency International said that Portugal’s capitulation “has disappointed hopes for a triumph of legal due process over politics and impunity. It also has worrying implications for the independence of Portugal’s judiciary… the outcome is disappointingly familiar.”

Lisbon’s decision came after a meeting between Portuguese Prime Minister Antonio Costa and President Lourenco at Davos. Portuguese President Marcelo Rebelo de Souza later said the decision “removes an irritant” in the bilateral ties. Vicente has yet to see the inside of a court in Angola – and at the height of bilateral tensions, his relatives were taking advantage of Portugal’s Golden Visa scheme.

Portugal undermined 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 scandal did Portugal think of the impact that its actions were having on the people of Angola. A look at how it treats people of colour inside its own borders explains why.

Race and corruption

One year ago, in January 2019, Portugal’s attention was seized by a viral video showing police beating residents from Bairro da Jamaica, a neighbourhood on the outskirts of greater Lisbon with a large concentration of inhabitants of African descent.

Chants of “Stop racist police brutality” were met by police firing rubber bullets. At least 10 people have been killed, including a 14-year-old, in such suburbs over the past 15 years. No police officers have been held to account. The BBC reported that residents in these suburbs complain of the police calling them monkeys, destroying their ID cards, and meting out beatings. “They hate black people,” one resident said.

The plight of black Africans at home and abroad is completely invisible to Portugal. Through its actions, Portugal has proved that it could not care less that the money corroding its internal institutions and international reputation should instead be spent in countries with which it has historical ties, to further their development.

In view of this, it can be said that Lisbon’s insatiability is fundamentally racist: it has placed its own corrupt desires above other countries’ legitimate needs. One Member of Parliament of African descent said: “This is very specific of Portuguese racism – the absolute denial that there is racism in Portugal.”

As it is with racism, so it is with corruption. Portugal’s politicians and media deny there is anything institutionally wrong with the country. No one is prepared to admit that there may or may not be a rotten apple or two.

The reality is that corruption is widespread, and the first step to fixing the problem is admitting the problem exists. Otherwise, most probably corruption will only spread. This is something the world, and the world’s poorest, can little afford.

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