Ricardo Espírito Santo Silva Salgado is known in Portugal as “Dono disto tudo,” or “Owner of everything.” 

The oligarch’s family has been calling the shots in Portugal for over a century. 

It’s the largest shareholder of the country’s biggest stock market-listed bank and controls a string of other financial companies, agricultural, energy, healthcare and property companies in Portugal and across the globe. 

But now it looks like the final chapters in the long history of the most renowned members of the country’s elite are about to be written. And perhaps with it a new chapter in Portugal’s and Europe’s financial and economic crisis.

Last month Ricardo Salgado, now aged 70, was arrested. He was detained — later released on bail for €3m — in connection with a long-running investigation into money laundering and tax evasion. 

Salgado’s arrest didn’t come out of nowhere. The Espírito Santo family has been under intense scrutiny since earlier this year when an audit ordered by the central bank discovered accounting irregularities at the Luxembourg-registered holding company ESI. 

With ESI and its 100 per cent-owned Rioforte now preparing for bankruptcy, the country’s President Anibal Cavaco Silva has admitted that the failure could be systemic. “We cannot ignore that there will be some impact on the real economy,” he said, providing a rather darker forecast than most of the experts quoted in the press with soothing words such as “contained” and “priced-in.” 

Predictably the central bank has come to the rescue, ejecting Mr Salgado and barring the family from further involvement in the management of Banco Espírito Santo, and injecting €4.9bn of public money to shore up the bank group. This is a huge sum in a country that has been through unprecedented austerity as part of a three-year EU and IMF bailout.

The repercussions of the crisis go much further than the Espírito Santo clan — different branches of which apparently descended into infighting as members used their influence to take out loans, even after regulators in Portugal and Luxembourg started their investigations. 

The Lisbon stock market has been in spasms since one of the companies controlled by the Espírito Santo family missed a rather large payment on its short-term debt — Banco Espírito Santo’s shares fell by 75 per cent before the state stepped in to bail out its shareholders and prevent a market meltdown. 

The country’s corporate world has been rocked too. Tied to the bank through cross shareholdings, Portugal Telecom has run into trouble with a planned merger with Oi, operator of one of Brazil’s biggest wireless networks, after the Espírito Santo family failed to repay more than $1bn it owed to the telecom company.

Elsewhere across the globe the ripple effect of the Espírito Santo group’s woes are being felt too — from Panama, where financial authorities have taken control of a teetering bank, to Angola where the central bank has warned of bad debt risks at one of the country’s most active lenders.

For Spanish financial journalist and economist Marco Antonio Moreno, the crisis of Portugual’s top bank is “just the tip of the iceberg.” He writes: “Banco Espírito Santo’s problems are longstanding and the financial gymnastics between holding companies is well known to investors. They wager that the European Central Bank will always step in and inject money, after which they start a run, leaving the bank in an even worse position. This is just the tip of the iceberg and there are more banks in [Europe in] a precarious situation: a financial tsunami could be unleashed...”

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his is not the first time the Espirito Santo family — Portugal’s answer to the Rothschilds — has faced a challenge to its financial grip on the country. In 1974 the Carnation Revolution that cast aside four decades of dictatorship also nationalised most of the Espírito Santo family’s assets. But following the abrupt end to the radical popular revolt and the country’s integration into the EU and Nato, the family empire was restored.

To be sure, reprivatising large parts of the economy and handing it to crony capitalists all those years ago seemed to work wonders for most Portuguese. Living standards rose and the economy did well after joining the western capitalist-military bloc, even if the 1 per cent and 0.01 per cent richest did far better than the rest. 

Today though, after Salgado and his banking mates in New York, Frankfurt, London and Paris sent the world economy plunging in 2008, and three years after the Troika marched in to impose a severe dose of cuts to welfare, services and jobs, the good times seem a distant memory. 

Last month Lisbon’s right-wing government reiterated its determination — despite a previous plan being thrown out by the Constitutional Court — to once again cut pensions and the wages of public sector workers to pay off international creditors under the Troika’s hated Memorandum.  

This after wages have already been slashed by 5 per cent between 2010 and 2013, and advances from the 1974 revolution, like universal free healthcare, have been drastically reversed, with swingeing cuts and creeping privatisation. 

PM Pedro Passos Coelho claims that there is life in Portugal’s corpse-like economy after undergoing prolonged austericide. 

Unemployment, though falling from a high of 16.3 per cent to 14.9 per cent by March 2014, remains well above the single-digit levels that were the pre-crisis norm. Rosy predictions of an economic rebound were dashed last month when figures showed GDP actually contracted 0.7 per cent in the first quarter. Government debt, meanwhile, is at a record 129 per cent of GDP.

So it’s tough for most Portuguese and Salgado’s clan is not helping, even if the Espírito Santos feel they are now falling on hard times. 

This isn’t Portugal’s first banking scandal, even if it turns out to be the biggest. The most recent examples are playing out in investigations and trials of top executives from the BCP and BPP banks on charges that included falsifying accounts, money laundering and fraud. 

All this occurred under the stewardship of socialist and right-wing ministers, top civil servants and the most senior officials of the Bank of Portugal, many of whom were at one time or other senior bankers themselves or were looking forward to a career in banking after quitting politics.

Banco Espírito Santo is yet another scandal that starts with officially sanctioned promiscuity between political, institutional and financial power that saw billions in state handouts to Portugal’s banks, vast dividend pay outs and double-digit pay rises for millionaire top execs who would be in jail now if justice existed. 

To date, though, few if any of Portugal’s banksters are behind bars. As is the rule in any country where big money is in charge, the law for white-collar crime is skewed to the wealthy who can easily afford the best lawyers, bail cash or damages to keep them out of jail. 

In the end Big Banking will come out of this mess just fine — propped up by mega bailouts and Mario Draghi’s free money, as well as his promise that whatever crap (eg dodgy Portuguese bonds) the banks buy the European Central Bank will happily buy it back off them. And the people will keep paying. Until they decide, collectively, they’ve had enough.