Former Portuguese PM remanded in custody in fraud case

Former Portuguese prime minister Jose Socrates was remanded in custody on suspicion of tax evasion and money laundering, in a case that has stunned Portugal.

Socrates, a 57-year-old Socialist, has been held since his shock arrest on Friday at Lisbon airport after arriving on a flight from Paris.

After lengthy questioning on Monday in connection with the corruption probe, a judge decided the ex-premier should remain in detention.

Socrates, who was prime minister from 2005 to 2011, was placed under formal investigation "for tax evasion, corruption and money laundering", according to the judge's statement read out to reporters.

His attorney Joao Araujo called the decision "deeply unjust and unjustified" and vowed to appeal.

Businessman Carlos Santos Silva and Socrates' chauffeur Joao Perna were also held in custody.

A lawyer, Goncalo Trindade Ferreira, was released on bail.

Searches have been carried out in recent days at Socrates' home and at business premises in connection with the investigation.

Luis Montenegro, parliamentary leader of the ruling Social Democrats (PSD), said Portugal's image had been tarnished "both internally and abroad by what has gone on in recent days."

The centre-right government has said little about the case.

Prime Minister Pedro Passos Coelho said Sunday it "pertains to the law and not politics" and that Portugal "has strong institutions that work."

Socrates' arrest is the latest bombshell in Portuguese politics, coming hard on the heels of a scandal that cost interior minister Miguel Macedo his job last week.

According to Portuguese media reports, it was information from state-owned bank Caixa Geral de Depositos that sparked the probe.

Investigators have been looking into transfers involving the former Socialist leader's account in comparison with earnings he has reported to tax authorities.

Particular attention is said to have been given to an apartment in Paris estimated at nearly three million euros (3.7 million). Socrates lived there in 2012 while studying philosophy in the French capital.

"I have no money or accounts abroad. I have always lived off the income from my own job," Socrates said in July, when he was questioned by the press over another money laundering case.

Socrates is a colourful character, even down to his name. Opponents say his choice to shorten his full name to Socrates, like the ancient Greek philosopher, was no more than political marketing.

The timing of the case is awkward for Lisbon mayor Antonio Costa, a former interior minister under Socrates and the Socialist party's new secretary general.

So far Costa has refused to distance himself from Socrates, saying that the Socialist party "does not adopt Stalinist practices of getting rid of photos" of former leaders.

Socrates' tenure as prime minister was marked by the financial crisis that badly hit the country.

He announced his resignation as prime minister in March 2011 after parliament rejected an austerity budget.

Shortly afterwards the country received a 78 billion euro bailout package from the European Union and the International Monetary Fund in exchange for a rigorous programme of fiscal discipline which came to an end in May. - AFP