Major Corruption Scandal In Spain's Ruling Party

[Murazor]

Conveniently enough, for once I have many sources in English to pick from, such as the CNBC.

Spain’s Ruling Party Hit by Major Corruption Scandal
Pierre-Philippe Marcou | AFP | Getty Images
Prime Minister of Spain, Mariano Rajoy.
Spain's governing Popular Party was drawn deeper into a web of corruption scandals this past week, after the Swiss authorities informed the Spanish judiciary that the party’s former treasurer had amassed as much as 22 million euros, or $29 million, in Swiss bank accounts.

The treasurer, Luis Bárcenas, resigned from his job in 2009, after being indicted in the early stages of an investigation, which is still ongoing, into a scheme of kickbacks and illegal payments allegedly involving other conservative party politicians.

Mr. Bárcenas has said that he is innocent and that the Swiss accounts were held on behalf of investors. The Popular Party, too, denied any link to the money. Alfonso Alonso, the party’s parliamentary spokesman, said at a news conference this past week that he and other party members were “outraged” by the discovery and called on the prosecuting judge to pursue the case “to the end.”

Nonetheless, the revelations have brought a fast-growing list of corruption investigations, which have unspooled across Spain, to the doorstep of the conservative government of Prime Minister Mariano Rajoy, who has so far remained silent. About 300 Spanish politicians from across the party spectrum have been indicted or charged in corruption investigations since the start of the financial crisis. Few have been sentenced so far.

Many of the investigations focus on real estate or infrastructure deals made during a decade-long construction boom that was brought to an abrupt end in 2008 by the world financial crisis, in which transactions were masterminded by property entrepreneurs, facilitated by local politicians and recklessly financed by regional banks.

However, some of the cases have involved bribes, embezzlement and tax evasion unrelated to the construction frenzy. Instead, they have tainted the upper echelons of Spanish society as well as the country’s institutional fabric, from the monarchy to the Supreme Court.

Iñaki Urdangarin, the son-in-law of King Juan Carlos, became the first member of the royal family to appear in court last year, as part of an ongoing investigation into whether he and some business associates siphoned off millions of euros from tourism and sports events. Meanwhile, Chief Justice Carlos Dívar resigned last June after being accused by a fellow judge of claiming several vacations as business expenses.

“I believe that the level of corruption that we’re now uncovering is well beyond anything that we had, at least in living memory,” said Alfonso Osorio, the president of BDO Spain, an auditing firm. “This corruption is sending the message that anything goes in the country, which could also really hurt Spain’s image around the world.”

The Swiss money held by Mr. Bárcenas gave fresh ammunition to the main opposition Socialist Party, whose leader, Alfredo Pérez Rubalcaba, called on Mr. Rajoy “to come out and give a public explanation” in response to the “huge social alarm” that news of the secret Swiss funds had sparked.

Mr. Rajoy has not responded so far. He has also steered clear of commenting on fraud charges against other politicians in his native region of Galicia. Ángel Currás, the conservative mayor of Galicia’s capital city, Santiago de Compostela, was charged this month as part of a widening investigation into illegal public works contracts awarded across the region. Mr. Currás denies wrongdoing and has refused to step down.

The Socialists, however, have also been embroiled in several scandals, particularly in their stronghold of Andalusia, Spain’s largest region, where prosecutors have accused some local officials of paying fictitious early retirement benefits to relatives and friends.

Meanwhile, in the independent-minded Catalonia, corruption and money-laundering investigations have also recently put the spotlight on some prominent politicians from the region’s governing Convergència i Unió party.

The pile of fraud-related cases has added strains on a Spanish judiciary long criticized for its inefficiency. Even so, prosecuting judges have recently extended their investigations into how politicians and others built up their wealth during the boom years while earning relatively modest salaries.

On Wednesday, amid another property investigation, the president of Madrid’s regional government, Ignacio González, revealed that he and his wife purchased a penthouse last month in the holiday resort of Marbella for 770,000 euros, or more than $1 million. Mr. González, who earns 4,800 euros a month, about $6,380, is denying any wrongdoing, as well as any link between his acquisition and the property investigation undertaken by a local judge.

At a time when recession-hit Spaniards have been forced to tighten their belts, corruption has shot up their list of concerns, according to the latest surveys from Spain’s Center for Sociological Investigations. Joblessness remains the main preoccupation.

Rising corruption was one of the concerns that ignited a youth-led protest movement in May 2011 that took over Puerta del Sol, in central Madrid, as well as squares in other Spanish cities.

One of the demands of the protesters, who called themselves "the indignants," was that politicians entangled in a fraud case step down or be barred from running for office. Instead, established parties included more than 100 politicians under judicial investigation for fraud and other offenses as candidates for regional elections in 2011.

Last March, four months after taking office, Mr. Rajoy introduced a government transparency law designed to put bureaucrats and politicians under more scrutiny, notably by giving citizens greater access to official documents and records. The proposal has since been bogged down in Parliament.

One of the pending changes on Mr. Rajoy's agenda has been an overhaul of public administration. However, "no government has so far managed to reform the public administration, in large part because almost all our politicians come from within the public administration," said Juan Luis Cebrin, chief executive of Prisa, the media group whose assets include El Pas newspaper.

As for Spain's judiciary, Mr. Cebrin said, "It is probably the only part of our system that hasn't yet gone through the democratization process."

Unfortunate as all this is, seeing that Spain is now in an inescapable lose/lose position where it will remain for years, I get at least the bitter satisfaction of saying "told you so" to the people who helped the PP get an absolute majority.

[K. A. Pital]

A lose-lose position? I'd say Spain is one of the few nations which could learn something instead of singing "lalala, business as usual". If the people would only get angry enough... *wishes*

[Murazor]

A lose-lose position? I'd say Spain is one of the few nations which could learn something instead of singing "lalala, business as usual". If the people would only get angry enough... *wishes*

The ruling party has an absolute majority and their vote discipline is a thing of legend, the Courts are swamped with work and there is frankly no decent alternative currently.

We are stuck with these jokers for three more years (lose scenario), unless there is a veritable social uprising that causes a total breakdown of the current political scenario (and the requirements for such pretty much is a lose scenario in its own worse, albeit one that has both potential for improvement and for worsening).

[Murazor]

Doubt anyone is particularly interested about it, but there have been relevant developments.

It would seem that one of the large national newspapers got their hands in the books. It being false seems doubtful, since printing this kind of thing commits them heavily.

Top PP officials shown to have taken payments on the side
Ledgers reveal that PM Rajoy was apportioned annual sum of 25,200 euros for 11 years
Documents include donations from construction firms and businessmen implicated in Gürtel
J. M. ROMERO / F. MERCADO / M. JIMÉNEZ / C. E. CUÉ Madrid 31 ENE 2013 - 13:47 CET6

The ruling Popular Party’s internal accounting between 1990 and 2008, to which EL PAÍS has had access, shows that the conservative grouping’s leading members were paid regular sums of money aside from their official salaries. The files, kept by former PP treasurers Álvaro Lapuerta and Luis Bárcenas, comprise a series of incoming items in the form of donations from companies, especially construction firms, and outgoing expenses, which include the payments to party leaders.

Among those who received payments on the side, according to the accounts kept by Bárcenas, is Prime Minister Mariano Rajoy. The PP president first appears listed in 1997, with sums of money next to his name that consistently add up to 25,200 euros a year, divided either in quarterly or six-monthly payments, and continuing up to 2008.

The party’s current secretary general, Dolores de Cospedal, also figures in the papers, with two entries of 7,500 euros next to her name in the second half of 2008, immediately after she had been ratified in her post by the PP convention in June of that year. De Cospedal has publicly denied knowledge that these payments were made by Bárcenas to party officials.

Mariano Rajoy, who was asked by this newspaper to comment on this story, declined to do so via a spokesperson. The prime minister said that he will not make any comment until he has seen the results of internal and external audits, ordered by him into the party’s finances in the light of the revelation earlier this year that Bárcenas had kept millions of euros in a Swiss bank account.

The secret ledgers also include regular payments of similar quantities to those noted down next to Rajoy’s name for previous PP secretary generals (Ángel Acebes, Javier Arenas and Francisco Álvarez-Cascos), leading figures Rodrigo Rato and Jaime Mayor Oreja, and the party’s deputy leaders.

The accounts, which also include other kinds of expenses, such as training courses, show final balance figures for each year. The books corresponding to the years 1993 to 1996 inclusive were not included in the documents seen by EL PAÍS.

The periodical payments to leading party members are first registered in 1997, a year after then-party leader José María Aznar had led the PP into government for the first time in its history. Among the notes for the first months in the 1990 ledger and during two months in 1997, payments to “J. M.” are present. All of the outgoing payments recorded in 1990 are listed next to the same initials.

Among the donors listed as having given money to the party are businessmen implicated in the Gürtel kickbacks-for-contracts scandal, which has seen several PP officials resign from their posts in regional and municipal administrations. One of those noted as having made donations is Pablo Crespo, the number-two man in Francisco Correa’s PP-linked corruption network, who has since become a target of the ongoing judicial probe into Gürtel. Alfonso García Pozuelo, the owner of the building company Constructora Hispánica, and Valencian assembly speaker Juan Cotino, are also shown to have given money to the party treasurers. Like Crespo, both were later accused of wrongdoing in the Gürtel case.

According to Bárcenas’ bookkeeping, every year part of the total quantity of donations received was set aside and paid into a bank account at Banco de Vitoria (absorbed by Banesto in 2003). The fact that only part of the money received ended up being transferred to this bank account under the heading “donations” could imply that the Popular Party was engaged in illegal financing in as far as it was not declaring all of its income.

[K. A. Pital]

I am interested, actually. Construction kickbacks are always a fascinating thing, especially considering just how much the construction boom was responsible for the fake prosperity of the 2000s.

[Murazor]

Meanwhile, in Spain, ex-treasurer has been just jailed and the government has collectively requested clean undergarments. They are really rather terrified of the possibility of this dude speaking.

From BBC News.

Luis Barcenas: Spain Popular Party's ex-treasurer in jail

A judge has ordered that Luis Barcenas, the ex-treasurer of Spain's governing Popular Party (PP), be held without bail until his corruption trial starts.

The ruling came after Switzerland informed the court that Mr Barcenas had transferred money from Swiss accounts to banks in the US and Uruguay.

In light of the revelations, prosecutors argued that the politician was a flight risk.

Mr Barcenas and his wife deny charges of tax evasion.

The couple are suspected of falsifying documents on their tax statements between 2002 and 2006.

Mr Barcenas is also accused of keeping up to 48m euros (£41m) in secret Swiss bank accounts. Prosecutors allege that some of the funds stem from illegal party donations or kickbacks.

But the ex-treasurer has denied this, saying that all of the money was made through overseas investments, real estate and art dealings.

High Court Judge Pablo Ruz handed down his decision after Mr Barcenas and his wife had been called in to testify on Thursday.

Dozens of people heckled the couple outside the court, the Spanish newspaper El Pais reports.

In March, prosecutors discovered what they described as unusual transactions of more than 600,000 euros over a five-year period relating to bank accounts held by Mr Barcena's wife, Rosalia Iglesias.

She has admitted that she was neither working nor receiving a steady income during that period.

The case is part of a broader investigation into claims of alleged illegal financing of the PP. The party, which is led by Prime Minister Mariano Rajoy, has rejected the allegations.

Mr Barcenas resigned as party treasurer in 2009 after being implicated in the slush fund case, which has become known as the Gurtel scandal.

[PeZook]

Murazor, are you kidding me? This is a massive scandal and Spain is a potential European flashpoint. Of course I am interested!

[Murazor]

Murazor, are you kidding me?

Nope.

This is a massive scandal and Spain is a potential European flashpoint. Of course I am interested!

Meh.

There is no nation in the world that is not experiencing issues with political corruption at this point in time.

This one is special only because of the parties involved and their mind boggling incompetence in its handling.

[PeZook]

This is one is special because it comes at a really inopportune time. Shit rarely happens because of one thing.

[Ziggy Stardust]

The ruling party has an absolute majority and their vote discipline is a thing of legend, the Courts are swamped with work and there is frankly no decent alternative currently.

We are stuck with these jokers for three more years (lose scenario), unless there is a veritable social uprising that causes a total breakdown of the current political scenario (and the requirements for such pretty much is a lose scenario in its own worse, albeit one that has both potential for improvement and for worsening).

What about the autonomous states like Catalonia? I seem to recall there have always been vague rumblings of independence (or just greater degrees of autonomy) concerning those areas; are those overblown or is this real? If it is real, theoretically a corrupt ruling party with a firm mandate (combined with the terrible economic outlook) seem like they could have the potential to really stir things up.

[Murazor]

What about the autonomous states like Catalonia?

Pretty much all the autonomous regions are controlled by the governing party, either directly or through close political organizations.

The Basque Country has been mostly quiet, in part because they have so far been spared the very worst of the crisis.

Catalonia, meanwhile, is having to deal with corruption issues of its own in the traditional regionalist party that are in their own scale every bit as serious as those of the governing party in Madrid.

[Murazor]

BBC News

A Spanish newspaper has published what it alleges are documents showing Prime Minister Mariano Rajoy and other top politicians received illicit payments.

El Mundo said it had original ledger entries handwritten by the former treasurer of the governing Popular Party (PP), Luis Barcenas.

It said it had delivered the documents to the High Court.

Mr Rajoy and other PP members have repeatedly denied that they received illegal payments.

Another Spanish paper, El Pais, published similar documents earlier this year.

It is claimed that Mr Barcenas ran a PP slush fund that took donations from construction magnates and distributed them to party leaders in cash.

Mr Barcenas is in custody facing trial for corruption and tax fraud. He denies the allegations.

However, in an interview published in El Mundo on Sunday, Mr Barcenas for the first time admitted that the handwriting in the ledger was his.

He added that the photocopies originally published by El Pais were a fraction of the documents he had in his possession.

El Mundo said the documents it had seen showed that Mr Rajoy received payments in 1997, 1998 and 1999 when he was a minister in the government of Jose Maria Aznar.

They included, it said, two payments to Mr Rajoy of 2.1m pesetas (12,600 euros; £11,000) in 1998.
Luis Barcenas arrives for questioning in Madrid, 6 February Luis Barcenas has been denied bail pending his trial

The alleged payments are said to have been undeclared and untaxed.

Spanish opposition leader Alfredo Perez Rubalcaba in February called on Mariano Rajoy to resign over the allegations.

"The Luis Barcenas originals published by El Mundo today pulverise the alibi used until now by the PP to deny the authenticity of its ex-treasurer's papers," El Mundo said.

The PP responded with a statement saying: "The Popular Party reiterates that it does not know of the notes nor their content, and it does not in any way recognise them as the accounts of this political organisation."

This is another twist in possibly the most important corruption scandal to hit modern Spanish politics, says the BBC's Tom Burridge in Madrid.

The allegations have caused anger among Spaniards already suffering a deep and long recession and biting austerity cuts.

The gift keeps giving.

[madd0ct0r]

so, assuming they end up jailed, then what?

[Murazor]

so, assuming they end up jailed, then what?

Government possibly collapses, Rajoy possibly ends replaced by Esperanza Aguirre (leader of the PP's neo-con equivalent brigade), indults possibly follow in short order.

[Murazor]

Reuters by way of Yahoo News

MADRID (Reuters) - Spanish Prime Minister Mariano Rajoy sent supportive text messages to his party's disgraced ex-treasurer for two months after the eruption of a corruption scandal involving People's Party (PP) leaders, El Mundo newspaper said on Sunday.

Luis Barcenas, jailed last month as a flight risk and due to testify in court on Monday, has become a thorn in the side for Rajoy as the premier tries to change recession-hit Spain's image and convince investors a recovery is under way.

His government denies its members received illegal payments from a slush fund run by Barcenas, who says photocopies of the payments are shown in a ledger published by El Pais in January.

Barcenas gave an interview to El Mundo last week and handed over what he said was the original ledger detailing payments to party officials, including Rajoy.

The head of the opposition Socialist party urged Rajoy on Sunday to resign, increasing pressure on the premier. Despite the scandal, however, fewer Spaniards would back the opposition than the PP in elections, according to a poll.

"There have been lies, resounding silence in terms of explanations and collusion, as shown by these text messages," Socialist leader Alfredo Perez Rubalcaba told a news conference.

Rajoy's text messages place him uncomfortably close to Barcenas, who is charged with tax fraud, bribery and other crimes. Rajoy has avoided even saying Barcenas' name in public and used his parliamentary majority to avoid appearing before opposition politicians to address graft allegations last week.

"Luis, nothing is easy but we'll do what we can. Cheer up," said one message from 2012.

In January this year, when the slush fund allegations broke, Rajoy sent Barcenas a message saying, "Luis, I understand. Stay strong. I'll call you tomorrow. A hug."

A spokeswoman for Rajoy declined to comment on the report.

The scandal has angered Spaniards and, although analysts doubt it will topple Rajoy, support for the PP has plummeted since the November 2011 general election.

A March 14 text showed Barcenas was ready to break away from the party. "Mariano, the behavior of the two party lawyers this afternoon was shameful," he wrote, according to El Mundo. The "behavior" of the lawyers was not explained.

"You must know what you're all playing at but I am now freed from any commitment to you and the party," the message said.

A corruption scandal in the province of Andalusia has dogged the Socialist opposition and, along with the slowness of Spain's legal system, has helped the PP ride out the allegations so far.

(Reporting by Clare Kane; Editing by Julien Toyer and Mark Heinrich)

Game over, man. Game over.

Well, actually not, but I'm pretty sure that Rajoy is not a happy camper right now.

[madd0ct0r]

is it common for spanish politicians to hug each other?

[Murazor]

is it common for spanish politicians to hug each other?

Very.

"Un abrazo" which can be literally translated as "A hug" is perhaps the most common friendly way (and not friendly-with-benefits, before you ask) of saying goodbye in a letter in European Spanish (not sure about South-American Spanish).