Portuguese authorities are conducting large-scale raids across the country as part of an examination into alleged fraud and corruption surrounding the 2015 privatization of TAP Air Portugal. Dubbed “Operation Flight TP789,” the inquiry focuses on potential misuse of funds during the sale of the airline to the Atlantic Gateway consortium and its subsequent recapitalization. The probe, involving searches at businesses, law firms, and accounting firms, raises fresh questions about the openness of state asset sales and follows a 2023 complaint from former government ministers, prompting a renewed look at the deal’s complex financial dealings.
Portuguese authorities are investigating potential fraud, corruption, and money laundering related to the 2015 privatization of TAP Air Portugal, the country’s flag carrier. The investigation, launched Tuesday, centers on allegations that funds were improperly used during the sale and subsequent recapitalization of the airline.
According to a statement released by the Public Prosecutor’s Office, searches are underway at 25 locations, including businesses, law firms, and accounting firms, as part of “Operation Flight TP789.” No arrests are currently planned. The investigation focuses on the 2015 acquisition of a 61% stake in TAP by the Atlantic Gateway consortium, and the subsequent capital injection into the airline.
The Public Prosecutor’s Office stated that the investigation also extends to contractual decisions made between Airbus and DGN Corporation prior to the sale, concerning the purchase of 53 new aircraft and the cancellation of orders placed in 2005. Authorities are examining whether these contracts facilitated the acquisition of TAP by the Atlantic Gateway consortium and its subsequent recapitalization, potentially using external funding that would ultimately be repaid by the airline itself, causing it financial harm.
Investigators are also looking into costs incurred by TAP with entities linked to Atlantic Gateway before the sale, as well as the financial dealings of individuals and companies associated with the airline’s private management during that period. The Public Prosecutor’s Office indicated that the alleged actions could constitute offenses including detrimental administration, economic participation in business, passive corruption in the private sector, aggravated tax fraud, and aggravated social security fraud.
The investigation is being conducted by a joint team comprising two prosecutors, two Judicial Police inspectors, an inspector from the Tax and Customs Authority, a Social Security inspector, and two specialists from the Attorney General’s Office’s Technical Advisory Unit. The operation is being supported by the National Corruption Combat Unit of the Judicial Police, the Tax and Customs Authority, the Social Security Institute, and the Technical Advisory Unit. Ten prosecutors and seven judges are overseeing the searches at various locations.
TAP Air Portugal stated it is fully cooperating with authorities in all investigations, but declined to comment on ongoing legal proceedings.
The Barraqueiro Group also confirmed the searches at its Lisbon headquarters and expressed “full confidence and tranquility” in its involvement in the TAP privatization process. The company, managed by Humberto Pedrosa, added that it had voluntarily provided the Public Prosecutor’s Office with a dossier containing all relevant information regarding the privatization, including evidence of no wrongdoing.
Government Response
The Ministry of Infrastructure and Housing issued a statement saying it views the searches “with normality.” “It is not our responsibility to comment on legal proceedings or investigations, but rather to view them with normality,” a spokesperson for Minister Miguel Pinto Luz said, adding that “full collaboration with the competent authorities will be guaranteed and the Portuguese state will continue to ensure that the process proceeds with integrity.” The ministry also noted that the 2015 privatization process was scrutinized by the Court of Auditors and the Assembly of the Republic through a parliamentary inquiry commission.
President Marcelo Rebelo de Sousa expressed hope that the investigation would be thorough and swift. “It is advantageous for the privatization of TAP in general that everything that needs to be investigated is investigated thoroughly but also quickly,” he said, adding that “the less doubt there is about what happened, especially a long time ago, the better for Portugal’s position.” “When we talk about TAP, what matters is Portugal’s position,” he stated.
Allegations of Misused Funds
The investigation centers on allegations that businessman David Neeleman used TAP funds, along with Humberto Pedrosa, to acquire the airline. The claims originated from a 2023 complaint filed by then-Ministers of Transport and Finance, Pedro Nuno Santos and Fernando Medina, respectively.
The General Inspection of Finance raised concerns about a coincidence between the amount of supplementary capital contributions required from Neeleman and Pedrosa and a pre-existing contract between TAP and Airbus. A parliamentary inquiry commission previously investigated the matter and sent its findings to the Public Prosecutor’s Office. The commission reportedly found strong evidence that a series of payments made by TAP were used to fund the purchase of the airline by DGN, Neeleman’s company. These payments included consultancy fees, salaries paid through service agreements to avoid social security contributions, and improper use of company vehicles.
The inquiry also focused on so-called “Airbus funds,” a deal made by DGN with the aircraft manufacturer that involved canceling a previous lease agreement for 12 A350 aircraft and securing a new contract for the purchase of 53 aircraft of a different type. As part of this deal, Airbus provided credit to DGN, totaling $226.75 million, which was then channeled to TAP through Atlantic Gateway.
The Atlantic Gateway consortium – comprised of shareholders David Neeleman and Humberto Pedrosa – won the privatization of TAP during the final stretch of the PSD/CDS-PP government, a process that was partially reversed in 2015 by the António Costa (PS) executive.
The Attorney General’s Office confirmed in September of last year that it had received the report from the General Inspection of Finance regarding the 2015 TAP privatization and forwarded the document to the Department of Central Investigation and Penal Action.
The case highlights ongoing concerns about transparency and accountability in the privatization of state-owned assets.
c/ Lusa
