What went wrong with the investigation that toppled Portugal’s PM?

The Portuguese political tsunami began a week ago, when two people close to the now ex-Prime Minister António Costa were arrested.

They were accused of irregularities in the concession of lithium deposits and green hydrogen projects.

Hours later, Costa himself hastily announced his resignation, triggering an early election – the second in two years.

“I leave office with a clear conscience,” the prime minister told the press, as Portuguese society looked on baffled, while European socialists mourned the loss of a politician tipped for higher EU office. 

This was just the beginning of ‘Operation Influencer’, an investigation that for the first time in Portugal’s history brought down a sitting prime minister.

Within days, however, the threads of the investigation began to unravel, after Portuguese prosecutors admitted they had confused the name of Prime Minister António Costa, with that of Economy Minister António Costa Silva, in the transcript of wiretaps.

But what other mistakes were made in the operation, which ended with the fall of the PM?

What is happening in Portugal?

The solid parliamentary majority enjoyed by António Costa’s Socialists was not enough to keep the government afloat.

Last Tuesday morning, a political shockwave shook the southern European country.

Prosecutors ordered the arrest of two members of Prime Minister António Costa’s inner circle, his chief of staff Vítor Escária and businessman Diogo Lacerda Machado.

Lacerda and Costa have been good friends since they studied law together in Lisbon. When Costa became prime minister in 2015, Lacerda Machado was able to stay by his friend’s side.

According to Portuguese media, investors were in the habit of hiring Lacerda Machado’s lawyer to learn more about the government’s inner machinations. 

Costa is under investigation for influence peddling, embezzlement and fraud. According to his own chief of staff, he is said to have unblocked concession files for mining operations.

In an institutional speech last weekend, the former prime minister explained that ‘whatever Lacerda Machado has done, he has never done it with my authorisation, a prime minister has no friends’.

“Throughout his administration, Costa stuck to the principle of not resigning when it came to members of his government,” says Paula Espírito Santo, Professor of Social and Political Sciences at the University of Lisbon. 

“He kept them until the last minute, until the pressure was too high. But when it came to himself, he resigned immediately, he didn’t follow this principle,” she told Euronews. 

In total, police carried out more than 42 searches, including Costa’s office in Sao Bento Palace and the ministries of infrastructure and the environment.

During the searches, envelopes containing more than € 75,000 in cash were found in the office of António Costa’s chief of staff, Vítor Escária, in the prime minister’s official residence.

The other three people arrested in the case are the mayor of Sines, Nuno Mascarenhas, and two administrators of the company Start Campus, whose project to produce green hydrogen and build a data centre in Sines is under investigation.

Portugal’s infrastructure minister, Joao Galamba, also resigned on Monday.

Why has the prosecution been deflated?

During the first days of the investigation, the Portuguese Public Prosecutor’s Office made a mistake that has since dogged their case.

They admitted that they had confused the Minister of Economy, António Costa Silva, with the country’s Prime Minister, António Costa, in a transcript of wiretaps in the corruption case.

“It was (Diogo) Lacerda Machado who informed the Public Prosecutor’s Office that there had indeed been a mistake, and the Public Prosecutor’s Office had to accept it,” Lacerda Machado’s lawyer told the press.

“Of course, these errors are not serious if they are unintentional. Whether it was intentional or not, I can’t slander the Public Prosecutor’s Office,” the lawyer added.

According to Professor Espírito Santo,  in the eyes of the public, these mistakes undermine the investigation, but at the end of the day it is the process itself that is important. 

“Nevertheless, it’s certainly not good for the image of the Portuguese public prosecutor’s office, which should be more careful in a case of this importance,” she adds.

Not only have the defendants contradicted the prosecution, but so has the judge in charge of the case.

Judge Nuno Dias Costa has released the five detainees, saying he does not believe they should be investigated for corruption or prevarication, as he only sees signs of influence peddling.

However, he ordered them to stay in the country and hand over their passports. Lacerda Machado must also pay a bail of € 150,000 within 15 days.

Dias Costa thus rejected the prosecution’s request to remand in custody the two main players in the case: the former chief of staff of the prime minister and Lacerda Machado.

The decision, which adds to the mistakes made by the public authorities, has provoked criticism from a part of society that wonders whether this political turmoil was necessary.

“The President of the Parliament also stressed that they should clarify what’s going on, because there’s a lot of talk that they’re tarnishing the public image of justice,” says the political scientist.

“There has been much criticism of the process, especially from the Socialist Party. The other parties are quieter because they now have a chance in the next elections,” she adds.

The end of Costa’s European dream?

Until this month’s scandal, Prime Minister Costa had been tipped for a senior leadership position with the EU in Brussels. 

Europe’s socialists, who have been losing strength on the old continent after each election, had applauded the parliamentary majority Costa had won in Portugal.

So they wanted the former prime minister to get a powerful EU job, where he could keep company with Josep Borrel, another socialist and head of European diplomacy.

“It’s not easy to know what will happen to Costa. Until this moment we thought he had lost all his expectations, but the more we know about the investigation, the more some people regret what has happened,” says Professor Espírito Santo.

“There are more and more voices saying that if there wasn’t enough evidence he shouldn’t have resigned. So they’re blaming him and asking why he rushed into this decision”.