Portugal’s Prime Minister in shock resignation over lithium and green hydrogen scandal

Portugal’s Prime Minister António Costa has handed in his resignation to Portugal’s Head of State, President Marcelo Rebelo de Sousa, as the PS socialist government he has led since 2015 has been engulfed in a major corruption scandal – the second this year – that has plunged the country into a political crisis.

The president has accepted the Prime Minister’s resignation. António Costa says he will not stand again as leader of the PS Socialist Party. Parliament will be dissolved by the President and elections will be held next year. In the meantime the current government will continue on in a caretaking capacity. “I’m here to fully collaborate, to investigate the whole truth and everything that the Supreme Court of Justice deems it should investigate on a matter that, in fact, I don’t know what it is” he said. The Public Ministry announced on Tuesday that António Costa will help the Supreme Court of Justice (the only court in Portugal that can hear a prime minister or head of State) in their investigations in a fast-ballooning scandal over alleged crooked green hydrogen and lithium deals. He says his conscious is clear of any wrongdoing. Duarte Cordeiro (the minister of environment and energetic transition) whose name was circulated on Tuesday as official suspects were being named, but who does not appear to have been officially cited as an ‘arguido’ (official suspect) so far.
The Portuguese judicial authorities made the Minister of Infrastructures, João Galamba a formal suspect or “arguido” in their investigation into possible crimes of “corruption, malfeasance, and trafficking of influence by holders of public office”. Five arrested had been arrested for questioning on Tuesday – the PM’s former chief of staff Vítor Escária, his ‘best friend’ and lawyer Diogo Lacerda Machado, the mayor of Sines Nuno Mascarenhas, the CEO of Start Campus Afonso Salema, and Start Campus director Rui Oliveira Neves.
The Prime Minister is under investigation because he may have used his personal influence to smooth the path of several opaque business deals in an unorthodox way; deals considered key for Portugal’s long-term economic plans, and including plans for a green hydrogen production plants in Sines, and a lithium refinement plant in the same town from lithium ores mined in the north of Portugal. Portugal plans to capitalise on its lithium ore deposits to supply processed lithium for use in batteries in Europe’s soon-to-be lucrative electric car industry.
All told, 43 police raids were made, including at the prime minister’s official residence and two ministries; Infrastructure and Environment; seizing documents. Two have been taken in for questioning.
According to the news source Público, Prime Minister António Costa’s Head of Cabinet, Vítor Escária and a consultant who is the prime minister’s best friend, Diogo Lacerda Machado were also detained, as are the Mayor of Sines, Nuno Mascarenhas, and two company directors of a data centre in the same town.
Other figures taken in for a police grilling include the Minister of the Environment, Duarte Cordeiro, the Minister of Infrastructures, João Galamba (made a suspect), and a former minister, João Pedro Matos Fernandes.
The Ministry of the Environment and Climate Action has confirmed the police searches at its premises although a inside source said they didn’t know why.
Following the searches and detentions, António Costa went to the official residence of the Portuguese President to have talks, but ended up by tendering his resignation.
In January, the Procurator-General of the Republic confirmed that an investigation into lithium and green hydrogen deals was underway, but stated at the time that no charges had been brought.
Now prosecutors say that during their investigations suspects had invoked the name and authority of the prime minister and alleged using his influence to “unblock procedures”.
This is the second major scandal to affect António Costa’s premiership this year. The first was an irregular €500,000 golden handshake paid out to a former director of Portugal’s State-owned airline TAP, and led to the departure of the then Infrastructure minister, Pedro Nuno Santos and the French TAP CEO, Christine Ourmières-Widener; the latter is suing the Portuguese government for multi-million euro compensation payout for unfair dismissal and damages to her reputation.

Photo: Lusa. José Sena Goulão