Major Corruption Probe Rocks TAP and Barraqueiro: Government Reacts to Police Raids

Police Raids Target TAP and Barraqueiro in Corruption Investigation

A major police operation was launched this Tuesday targeting TAP Air Portugal and the Barraqueiro transport group. The investigation, led by Portugal's Central Department of Investigation and Penal Action (DCIAP), focuses on suspected crimes of fraud, qualified swindling, and money laundering.

Operation "Flight TP789" Details

In a statement sent to newsrooms, the Public Prosecutor's Office confirmed that searches are underway at 25 locations including corporate offices, law firms, and accounting societies as part of "Operation Flight TP789." No arrests are expected during this phase.

Focus on 2015 Privatization Deal

The investigation centers on the 2015 privatization of TAP during the final days of Pedro Passos Coelho's government. Specifically, authorities are examining the acquisition of 61% of TAP's capital by the ATLANTIC GATEWAY consortium from state holding company PARPÚBLICA.

Key elements under investigation include:

• Contractual decisions between Airbus and DGN Corporation (an ATLANTIC GATEWAY shareholder)
• TAP's acquisition of 53 new aircraft and cancellation of previous orders
• Suspicion that these contractual choices enabled the consortium's acquisition using external financing ultimately paid by TAP itself
• Costs borne by TAP with entities linked to ATLANTIC GATEWAY prior to the sale

Suspected Crimes and Investigation Team

The Public Prosecutor's Office is investigating potential crimes of harmful administration, economic participation in business, passive corruption in the private sector, qualified tax fraud, and qualified Social Security fraud.

A mixed team is handling the investigation, including two public prosecutors, two PJ inspectors, one tax authority inspector, one Social Security inspector, and two technical specialists from the Attorney General's Office.

Company Responses

TAP guarantees it is cooperating with authorities in all investigations, though the airline states it "does not comment on judicial processes."

Barraqueiro Group confirms searches at its Lisbon headquarters and expresses "total confidence and tranquility" regarding its involvement in the TAP privatization process. The group claims it had voluntarily submitted a dossier to the Public Prosecutor's Office with all relevant information about the privatization.

Government Reaction

The Ministry of Infrastructure and Housing stated it views the police operations "with normality." Minister Miguel Pinto Luz's office emphasized that "all cooperation with competent authorities will be guaranteed" and that the state will ensure the process proceeds with integrity.

Presidential Statement

President Marcelo Rebelo de Sousa expressed hope that the investigation would be thorough but rapid, stating that "when we talk about TAP, what matters is Portugal's position." He noted that clarity about past events would benefit the current privatization process.

Background: The 2015 Privatization

The investigation concerns the 2015 privatization where TAP was sold to a consortium led by entrepreneurs David Neeleman and Humberto Pedrosa. The inquiry originated from a complaint filed in 2023 by then-ministers Pedro Nuno Santos and Fernando Medina.

Central allegations include suspicions that David Neeleman used TAP's own funds, together with Barraqueiro owner Humberto Pedrosa, to purchase the airline. The General Finance Inspectorate flagged coincidences between capital payments the businessmen were required to make to TAP and existing contracts between TAP and Airbus.

Parliamentary Investigation Findings

The Parliamentary Committee of Inquiry (CPI) into TAP's political management found strong evidence that payments for DGN's TAP acquisition expenses were covered by the Portuguese airline itself. These included:

• 15 million euros in consulting fees
• Administrator salaries paid through service provisions, avoiding Social Security payments
• Improper use of company vehicles

Airbus Funds Controversy

A major focus of the parliamentary inquiry was the so-called "Airbus funds" - a deal between DGN and the aircraft manufacturer that involved canceling a previous contract for 12 A350 aircraft and implementing a new agreement for 53 aircraft of different models.

As part of this deal, Airbus provided capital credits to DGN worth $226.75 million, which were channeled to TAP through Atlantic Gateway. Investigators noted this amount coincides with penalty values TAP would owe for non-compliance with the 53-aircraft acquisition agreements.

The Atlantic Gateway consortium - composed of shareholders David Neeleman and Portuguese businessman Humberto Pedrosa - won the TAP privatization during the final days of the PSD/CDS-PP government, a operation that was partially reversed in 2015 by António Costa's PS government.