Member of Government steps down amid Land Law controversy
He set up two companies in the property sector last October, which could benefit from changes to the land law, which at the time he was drafting.
The first political casualty in Prime Minister Luís Montenegro’s Government has emerged, as Secretary of State for Local Administration and Land Use Planning, Hernâni Dias, resigned Tuesday amid a mounting scandal linked to the review of Portugal’s land law.
According to reports, Dias established two companies that could stand to profit from the government’s new Land Law—legislation he helped draft.
The law facilitates the conversion of rural land into urban areas, and the companies, created while he was in office, are suspected of being set up to benefit from these changes.
The resignation was promptly accepted by the PM, who highlighted the “selflessness underlying this personal decision.”
Hernâni Dias, a former mayor of Bragança, northeastern Portugal is also under investigation by the European Public Prosecutor’s Office (EPPO) over allegations of receiving benefits during his time as mayor.
Controversial Ties to Land Law
The RTP investigation that precipitated the scandal revealed that Dias, along with his family, founded the company MCRH Singular, LDA, on October 28, 2024 - just two months before the land law was published in the Diário da República.
Dias and his wife each hold a 35% stake in the company, while their two children hold 15% each.
MCRH, headquartered in Bragança, operates in real estate, civil construction, and property management - activities directly tied to areas impacted by the new legislation.
Moreover, RTP reported that Dias created another company, Prumo, Esquadria e Perspetiva, LDA, in partnership with a minor, with MCRH holding 50% of the shares. The second company, based in Maia, also focuses on business areas potentially benefiting from the new land law.
The timeline raises questions about whether Dias leveraged his governmental role to influence legislation for personal gain.
Dias Defends His Integrity
In his resignation letter, Hernâni Dias stressed that his decision was motivated by a desire to protect the government’s stability, Prime Minister Montenegro, and his family’s privacy, which he said had been compromised by falsehoods and unfounded allegations.
“I am absolutely at peace with my conscience,” he wrote, adding, “This resignation is not out of fear of clarifying the issues raised in the media but rather to ensure I can address these matters without casting a shadow over the government.”
Dias also announced he would suspend his parliamentary mandate to appear before parliament and provide full explanations.
He expressed frustration with what he described as a wave of "falsehoods, distortions, and unjustified insinuations" in the media but maintained his readiness to cooperate with authorities.
“Political life demands the courage to make decisions,” Dias wrote, explaining that his continued presence in office could be seen as a liability to the government’s work.
PM Accepted the resignation
Prime Minister Luís Montenegro, in a statement, acknowledged Dias’s contributions to the government’s agenda and praised the decision to step down. “The selflessness behind this personal decision is evident,” Montenegro’s office said, adding that Dias’s replacement would be announced soon.
While the resignation averts immediate political fallout, Montenegro’s government faces continued scrutiny over the alleged misuse of power in drafting the land law.
Meanwhile, the European Public Prosecutor’s Office is investigating Hernâni Dias for alleged improprieties during his tenure as Bragança mayor, including claims he accepted benefits in awarding contracts for the expansion of the city’s industrial zone.
Reports also linked an apartment occupied by Dias’s son in Porto to the family of a contractor involved in those projects.
Dias, however, has denied all wrongdoing. “I acted with complete transparency and requested that both the Public Prosecutor’s Office and the National Civil Engineering Laboratory (LNEC) investigate the industrial zone project in Bragança,” he said in a previous statement.
Dias’s resignation marks the first major challenge for Prime Minister Montenegro’s administration, which is already under pressure to deliver on key reforms amid growing public distrust.
Opposition parties have called for a thorough investigation into Dias’s actions and the drafting process of the land law.
Meanwhile, questions linger over whether similar conflicts of interest might exist elsewhere in the government’s ranks.