Coffee House

Cheat sheet: the new Spanish corruption scandal

1 February 2013

An unemployment rate of 26 per cent (and 56 per cent for young people); an economy that contracted by 0.7 per cent last quarter; tumbling approval ratings. Spanish Prime Minister Mariano Rajoy had enough problems, even before claims that he received about €280,000 (£240,000) in payments from ‘secret’ accounts managed by the treasurers of his People’s Party (the PP). Protestors took to the streets of Madrid last night calling for his resignation.

El País (Spain’s biggest newspaper) published hand-written accounts that it claims were kept by PP treasurers Luis Bárcenas and Álvaro Lapuerta between 1990 and 2009. They show donations to the party from businesses (mostly in the construction sector) and regular payments to various party leaders, on top of their normal salaries. According to the paper, Rajoy received €25,200 (£22,000) a year for 11 years from 1997 to 2008. Other alleged beneficiaries include Rodrigo Rato, who served as Spain’s finance minister from 1996 to 2004 and Managing Director of the IMF from 2004 to 2007; and María Dolores Cospedal, current Secretary General of the PP.

This is the latest chapter in an ongoing corruption scandal surrounding the PP’s accounting. Bárcenas resigned as party treasurer in 2009 after he became the focus of allegations, and a fortnight ago Swiss authorities told the Spanish investigators that he had deposited €22 million (£19 million) in Swiss bank accounts.


Both Bárcenas and the PP have denied all the allegations against them. The party put out a statement saying that it ‘has no knowledge of the handwritten notes that were published and of their content, and it cannot be recognised, in any case, as this political party’s books.’ Cospedol told a press conference: ‘The People’s Party only has one set of accounts and it is clean, transparent and submitted to the official accounting authority. We have absolutely nothing to hide.’

Still, the country’s public prosecutor Eduardo Torres-Dulce has suggested he might haul the politicians concerned in for questioning. He told a Spanish TV station last night that a decision on any investigation into the claims would be made in the next few days. Rajoy has announced that he will speak about the allegations against him tomorrow.

What long-term effect — if any — this will have on Rajoy and his government isn’t clear yet. As Reuters points out, ‘The alleged payments may not necessarily be illegal if the party leaders declared the income in tax statements. Until recently, Spanish political parties were allowed to receive anonymous donations. However, it would have been illegal not to book those donations in the party’s official, regulated accounts, a People’s Party source told Reuters.’

But the source did say that ‘It looks like bribes’ and so could be very damaging to the party’s standing. And such accusations carry an extra sting when levelled against a government that is cutting public services and raising taxes. On the other hand, the New York Times has reported that ‘About 300 Spanish politicians from across the party spectrum have been indicted or charged in corruption investigations since the start of the financial crisis.’ So this may not have the impact it would if it were an isolated incident.

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  • HFC

    And while we are on the subject of corrupt politicians just why are we not allowed by the blessed Spectator editor to comment upon the corrupt and corrupting behaviour of Chris Huhne who has at last today admitted guilt?

  • CharlieleChump

    The situation in Spain is repeated across the EU and in fact the whole of Continental Europe including Russia.
    The faults of the UK political classes are many, and many are deep, but at least we have up to now avoided this. Up to now.
    Is corruption an inevitable consequence of coalition government? Discuss.

    • Gary Wintle

      All governments are corrupt, you ninny. A politician is a whore by definition.

  • Tom Tom

    ……..just to add insult to injury 89% Spanish Pension Funds are now invested in Spanish Government Debt……………….

  • Framer

    Anyone else find the statistic of 56% youth unemployment in Spain hard to believe?

    • Daniel Maris

      Yep. There are so many family establishments in Spain (hotels, bars and so on) that I imagine it’s always a temptation to get your son or daughter to sign on when in reality they are helping out in the hotel, bar etc.

  • Daniel Maris

    The Spanish people have been at the centre of international affairs.

    Perhaps they will be again.

    Perhaps they will realise that the wind turbines across Spain are still turning…despite the economic crisis and just as strongly as before.

    Perhaps the Spanish people will realise that in the modern age they have huge,huge resources, to build a real economy: sunshine, land, and mountains.

    • Tom Tom

      and lots of empty real estate worthless propping up billions of Debt……

    • Malcolm Kyle

      Perhaps you’re talking out of your culo :-)

    • Fergus Pickering

      Sounds like Egypt. They’ve got sunshine, land and mountains.

  • Earlshill

    spot on from Tom Tom below – Italy is going to blow first (i.e. be engulfed by political crisis caused by DP corruption) leading to sovereign default crisis……Portugal and Spain will follow.

  • Russell

    Compared to the fraudulent taking of taxpayers money and giving it to your friends or relatives for ‘non-existent services’ that MP’ s in the UK government were found guilty of and even now still participate in, Italy is no worse than the UK.
    Half of our current MP’s should be in jail for the theft of taxpayers cash in previos Labour years in office and even continuing today.

    Politicians – corrupt & untrustworthy

    Journalists – corrupt & untrustworthy
    BBC – rotten to the core and totally biased in favour of their blessed Labour Party
    Judges & Lawyers – Incompetent and untrustworthy
    Police – Dishonest & untrustworthy

    All in all the characters in these positions have brought this country down to that of a dodgy 3rd world country.

    • Fergus Pickering

      What do you do, Russell? Do tell. Then we will know what it is that is not corrupt and untrustworthy.

      • Russell

        I am not an MP or a Judge or a Lawyer or Journalist or a policeman…….Just an honest PAYE engineer who says what he means, doesn’t promise things he cannot do and believes in honesty..

        • Fergus Pickering

          You can’t believe in honesty, Russell. It’s not a religion. But surely you must have seen all this was so years ago. It’s always been like that. It’s life. There wasn’t a perfect past, not ever.

  • Tom Tom

    ITALIAN PROSECUTORS INVESTIGATING MONTE PASCHI, BNL, UNICREDIT, INTESA SAN PAOLO AND CREDEM………… maybe Draghi can stand trial ? Looks like Spain and Italy may blow before Greece………….EVENT RISK is a factor than Bond Markets should think about….Black Swan time

  • Tom Tom

    Try Italy with their busted Bank having bribed Monti and his affiliates and how their dodgy Derivatives deals were covered up by Mario Draghi as Governor of the Bank of Italy and subsidiary of Goldman Sachs

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