Portugal PM denies allegations of past financial impropriety

LISBON (Reuters) - Portugal's Prime Minister Pedro Passos Coelho categorically denied on Friday allegations that he received improper payments more than a decade ago after the opposition argued the accusations were serious enough to threaten his job.

Speaking to parliament in a regular debate which focussed squarely on the case, Passos Coelho dismissed as insinuations the accusations of his "phantom incomes" in the 1990s allegedly received from a company while he was a member of parliament.

The prosecutor general's office said on Thursday in a statement it had shelved an investigation into alleged undeclared payments because the statute of limitations had passed. Deputies are not allowed to accept outside income when they get parliament subsidies and benefits.

Passos Coelho said he had received a more detailed report from the prosecutor general that cited accounting data from the company, Tecnoforma, showing no illegal or improper payments were ever made to him.

"I never received any payment from Tecnoforma when I was deputy," Passos Coelho said, to applause form the centre-right ruling coalition deputies. "I never received any payment for work done for any other organisation... My assets and my life cannot be more transparent," he said.

He acknowledged he had claimed unspecified representation expenses, including for domestic and international travel, while working for a non-government organisation linked to Tecnoforma but said he never had any outside income.

Challenged by the leader of the main opposition Socialists, Antonio Jose Seguro, to disclose his banking history, Passos Coelho said it is his right not do so and he refuses "to do a banking accounts striptease for the delight of newspaper readers".

Seguro, in his turn, vowed to use all constitutional means to lift bank secrecy on Passos Coelho's accounts, as only that would prove his innocence.

The prosecutor general said on Thursday it had received an anonymous accusation in June about the prime minister's links with the company Tecnoforma between 1997 and 2001. It opened an investigation into the accusation but subsequently shelved it.

The daily Publico reported on Thursday that Passos Coelho may have violated parliamentary rules against outside income by taking payments from Tecnoforma to head a non-governmental organisation.

Social Democrat leader Passos Coelho has governed Portugal since 2011, navigating harsh austerity measures introduced under the country's 78-billion-euro bailout from the European Union and IMF. Lisbon exited the bailout in May.

He has nurtured a clean political image, including choosing at the start of his premiership to live in his own modest apartment rather than the official residence.

The allegations come in the same week that the opposition centre-left Socialists are due to hold a primary to decide who will lead the party in a general election nine months away. The primary takes place on Sunday between Seguro and Lisbon's popular mayor Antonio Costa.

(Reporting By Andrei Khalip)

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