Manuel Pinho and Ricardo Salgado face corruption charges
A former minister of the Economy and an ex-banker who was once one of the most powerful businessmen in Portugal will know within the next few hours if they will face major corruption charges.
Manuel Pinho, who was the Minister of the Economy under the José Sócrates government is suspected of crimes of active and passive corruption for the illicit act of paying bribes of over €5 million to the banker who ran the Banco Espírito Santo empire until its collapse in 2014, between 2005 and 2009.
The allegation is that he received these amounts via offshore companies when he was a minister for the PS government which fell in 2011 resulting in a Troika of international lenders bailing out Portugal to the tune of €78Bn.
The case is regarding the electricity giant EDP’s Contractual Equilibrium Maintenance Costs (CEMCs). This was a compensation scheme which was introduced with the phasing out of Power Purchase Agreements (PPAs) created to attract investments for the power plants the country needed, but which the State could not or did not want to finance.
The PPAs had established that producers who invested in these plants would receive a compensation for their investment and availability and would be compensated for all the costs they would incur during production.
In 2003 specific steps were taken to phase out the PPAs with the community directive that establishes the rules for the operation of the liberalised electricity market.
The early termination of the PPAs was decided, which forced the adoption of a compensation mechanism that ensured financial neutrality and which was approved by the European Commission and the Portuguese Parliament – the Costs of Maintenance of Contractual Equilibrium (CMCE).
In the EDP CMEC case the then presidents of EDP and EDP Renováveis, António Mexia and João Manso Neto were suspected of corruption and economic participation in a business to maintain an excessive rents contract which according to the Public Ministry had corrupted Manuel Pinho and the former Secretary of State for Energy, Artur Trindade, whereby BES ended up as the beneficiary because it was an EDP shareholder.
The EDP Case enquiry has two aspects: one is to do with the alleged corruption of the former minister in order to favour EDP; the other regarding under-the-table cash payments paid by BES which had been managed at the time by Ricardo Salgado.
Manuel Pinho is currently under house arrest but he must be charged or released today (14 December).
The accusation also involves the wife of Manuel Pinho for money laundering and for having allegedly helped her husband cover up his ill-gotten gains.
In May this year, the Supreme Court of Justice rejected a request of ‘habeas corpus’ presented by the defence of the former minister which wanted the end of the period domiciled imprisonment that he has been subjected to since December.
According to the decision by the judge, the Supreme Court turned down the “the request for habeas corpus because there were no grounds”.
The corruption case also involves other key suspects such has a former administrator of electricity grid operator REN, João Conceição, the ex-Secretary of State of Energy, Artur Trindade, and Pedro Furtado, who was in charge of regulation in the company managing electricity networks (REN), and the former BES president, Ricardo Salgado.