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Prompted by Monty Munford’s highlighting of how things could go wrong in Portugal in episode 4 of Drive at Five, I took a look at what’s going on and how the labor-intensive legal system and one judge in particular could be driving investors and the seepage that they feed is a little uneasy.
For quite a few years, Portugal has bent over backwards to welcome the world to its doorstep. From UK residents sorely missing their EU status, to the crypto community enjoying tax-free status, to the erstwhile Web Summit in Dublin ditching DUB for LIS, the crowds and most of all their money is constantly making its way to Lisbon and beyond.
However, bubbling just below the surface and perhaps unknown to the new locals, it seems that the relatively new and modern Portugal we’ve all been fascinated by (the dictatorship established by Antonio de Oliveira Salazar in 1933 was put down by the end of 25 April 1974, via a left-wing coup) is subject to power struggles, not the least of which include a legal system so complex it looks ready to collapse under its own weight, and a media-hungry Central Court magistrate of Portugal Criminal Investigation Court.
“Here’s to the crazy ones. The inappropriate ones. The rebels. The rioters. The round pegs in the square holes. Those who see things differently. They don’t like rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. The only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as crazy, we see geniuses. Because the people who are crazy enough to think they can change the world are the ones who do.” – Rob Siltanen
Now, as much as we have been sustained by these iconic words for the past 25 years, except for the rare few, “… the crazy ones. The inappropriate ones. The rebels. Troublemakers.” and money and profit rarely go together.
So with all the promises of prosperity in Portugal and the masses on the way (a golden visa costs just €280,000 and after five years you too can become a Portuguese citizen by only having to ‘reside’ in the country seven days a year), why according to the Lisbon Institute of Social Sciences, “on average, respondents believe that more than two-thirds of politicians and 51 percent of business executives are corrupt.”?
While the answer to this question will certainly be different for each individual polled, the overarching theme seems to be the alleged relationship between Portugal’s executive branch and the judiciary, with much of the posturing coming from the latter, particularly from one judge, Carlos Manuel López Alexander.
Judge Alexander is a magistrate at the Central Court of Criminal Investigation of Portugal (TCIC), a specialized Portuguese court located in Lisbon, which focuses on the criminal investigation of cases of serious or highly organized criminal activity, i.e. large-scale economic or financial crimes.
Until January 4 of this year, for a period of 10 years, Alexander and only one other judge, Ivo Rosa, pronounced judgments in cases held in this court. Following the merger with the Lisbon Court of Criminal Investigation, seven new judges were added to the overburdened TCIC court, leading to Alexander’s media grab.
Described as a serious and intelligent judge with integrity by some, Alexander has also been criticized for having a “Robin Hood complex” and “behavior that befits a prosecutor, not an investigating judge,” according to lawyer Joao Medeiros.
While his intentions may be good, a review of Alexander’s track record shows that he has a tendency to over-involve himself in an investigation, particularly in assisting the prosecutor, at a stage when most, if not all, judges should retain their neutrality, often signing the charges brought by the prosecutor and using the media as a tool to pass judgment on the public before the case has even seen a courtroom. Such actions led to questions about the separation of powers under Alexander.
As one of the few judges known to give personal interviews to television outlets, lawyer Daniel Proenza de Carvalho, a former representative of Ricardo Salgado of Banco Espírito Santo, called him “the superjudge of the tabloids.”
Whether Portuguese residents consciously or subconsciously know it or want to admit it, the country’s Operation Marquês, a huge court case that “involved tangled financial scandals such as BES/GES and PT Telecom” and involved former Prime Minister José Sócrates, who was accused of 31 crimes in 2017 that shook the country to its core is a ubiquitous factor in the view that “more than two-thirds of politicians and 51 percent of business leaders have been corrupt.”
The presiding judge for most of Operation Marquês? You guessed it, Carlos Manuel Lopez Alexander. When the case was handed over to fellow judge Ivo Rosa, Socrates was acquitted of 25 of 31 crimes.
Since then, however, Rosa has been the subject of disciplinary proceedings for possible illegal interference with Carlos Alexander’s judicial activities. Alexander was initially accused of abuse of power in the handling of the case, as it was alleged that his selection as a judge in the case did not go through the standard randomized trial process. Rosa was acquitted of those charges in May 2022. Prosecutors supported Alexander in that case.
And while the former chairman of Banco Espirito Santo (BES), Ricardo Salgado, was sentenced to six years in prison, as Mr. Munford noted, Alexander has not stopped expanding his Robin Hood cause, now continuing his crusade against the entrepreneur and owner of Sporting Lisbon football club, Alvaro Sobrinho. Sobrinho, the former president of the executive commission of BES Angola (yes, the Angolan branch of BES) has been accused of disappearing with a “missing” €500 million, charges that Sobrinho’s lawyer Artur Marquez successfully argued lacked evidence of any crimes.
However… just a few months ago, after 11 years of representation in which Marquez won appeal after appeal, Sorinho severed ties with his now former legal representative, all stemming from a disagreement involving Sobrinho’s request for additional notes added to the already texts written by Marquez.
Speaking on condition of anonymity, one person involved in the matter told me: “Sobrinho represents the internal tension facing Portugal – the struggle for global investment in new areas, including technology, against a sheltered old boys’ club that still largely controls the media and justice system from their mansions in Cascais.”
If all of this is enough to make your head spin, you’re not alone. For all that warm weather and delicious food, signing my name on the dotted line and putting my hard-earned money into a legal and political system like that would give me cause for concern.
“Lisbon has earned its label as the best tech and crypto-friendly place in Europe, but it won’t stay that way unless the creaky, slow and outdated infrastructure underneath changes to keep up. The tech community is moving fast and won’t hang around if things don’t improve,” commented Lisbon-based Ephraim Austin, production editor at P2E Analytics.
Doubling down on the fact that one of Portugal’s biggest draws to date, the tax-free status of cryptocurrency earnings, is now coming to an end, it looks like Lisbon’s sunny days and its irritating tones for investors’ ears may be coming in tandem.
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