Corruption in Spain

Corruption in Spain describes the prevention and occurrence of corruption in Spain. That (in the early 21st century) there are many political corruption legal processes in the post Franco years of democratic Spain indicates both a social intolerance of the Ancien Régime and a willingness to investigate allegations by a largely young and independent judiciary, despite its senior judges being appointees of parliamentary committees

Transparency International rated Spain between 2001 and 2012. The average value for Spain during that period was 66.67 points with a maximum of 70 points in 2001 and minimum of 61 points in 2009 and (100 being no corruption). In 2011 it was rated 30th least corrupt country in the world

Political corruption is a large concern in Spain. Political corruption is defined as the action or inaction of one or more real persons managing public resources for their own or a third party's benefit to the detriment of all the citizens they should serve and benefit. Transparency International Global Corruption Barometer 2013 shows that the surveyed households consider political parties, Parliament and the judiciary the most corrupt institutions. However, the occurrence of petty corruption is rare in Spain, according to the Barometer 2013. Several other sources, including World Economic Forum Global Competitiveness Report 2013-2014 and Ernst & Young Fraud Survey 2013, show that bribery and corrupt practises are widespread in businesses in Spain. As suggested in Business Anti-Corruption Portal, anti-corruption strategies should be significantly strengthened at all levels of the government. One example could be to strengthen investigative and prosecution efforts in foreign bribery cases and enforcing existing laws.

A comprehensive list of Spanish political corruption cases is available on the Spanish Wikipedia.

Purposes of this article

Firstly, this article simply seeks to summarize some of the notable major cases and link existing articles about Spanish political corruption trials. It also seeks to provide a historical perspective to the detection and denouncement (mostly by Investigative journalism), the courage of examining magistrates in extracting evidence and of prosecuting 'fiscals' who present the case for trial, and the use of front organizations by both defendants and particular litigants who may be admitted as legitimate participants and who may then seek to help or hinder the official prosecution process.

More important this article is intended to address the cultural heritage implicit in the long tradition of Anglo-Spanish rivalries. Over several centuries ancient propaganda such as the "Black legend" may have become embedded Hispanophobia for many past and some contemporary native speakers of the English language

English cultural suspicion of Spanish probity

The English expression Spanish practices arises from a long history of perceived 'Spanish duplicity', but crystallized in the mid 16th century after the failed Spanish Armada of Philip II of Spain, who tried to regain the English crown by relying first on his jure uxoris title and then on the Spanish practice of legitimacy of succession arising from the death of his wife, Mary I of England. The jure uxoris rule seemed disingenuous and probably fraudulent according to the tradition of the Kingdom of England and not least to English Protestant opinion. Conversely, the activities of celebrated British seamen such as Francis Drake were considered brave heroes at home but outright criminal piracy by the Spanish.

Main article: Pope Alexander VI

About a century before the Spanish Armada, the Italianized Valencian surname Borgia of the Pope Alexander VI had become a byword for libertinism and nepotism.

Main article: Habsburg Spain

About half a century before the Spanish Armada Ferdinand II of Aragon had enlarged Spain's sphere of influence in Italy, strengthening it against France. Yet in the War of the League of Cambrai against Venice, Spanish soldiers fought alongside their French allies at the Battle of Agnadello (1509). However, only a year later, Ferdinand joined the Holy League against France, seeing a chance at taking both Naples — to which he held a dynastic claim — and Navarre, which was claimed through his marriage to Germaine of Foix.

Reign of Philip III of Spain

The period 1598 to 1617 in which Francisco Gómez de Sandoval, 1st Duke of Lerma held the government on behalf of Philip III was one of the most notoriously corrupt of Spanish regimes. It was infamous because of the self-enrichment activities of his crony bureaucrat, Pedro Franqueza, his secretary, Rodrigo Calderón, Count of Oliva and of course the Duke of Lerma himself.

19th Century

The Queen Regent Maria Christina of the Two Sicilies became famous for her involvement in shady deals that divided the people from powerful elite. Speculation in the production of salt, construction of railways and even the illegal slave trade, which also involved Ramón María Narváez, 1st Duke of Valencia. It was said that there was no industrial project in which the Queen Mother had no interest. Her fortune was estimated at 300 million Spanish reals.

Spanish dictatorship

The Generalísimo Francisco Franco won power in Spain by a brutal military rebellion against the democratically elected Frente Popular. Both Britain and the United States supported the rebel army and military junta of Franco in various ways and at various times, but never supported the elected Second Spanish Republic. During his time, Spanish people started at last to create a middle class an economic prosperity as never before in Spanish history, he created the first social security system, pension retirement and security was totally assured to the Spanish population.

The Accession of Juan Carlos I to the Spanish throne saw the advent of a democratic state built on the foundations of the Spanish Constitution of 1978 operated by largely the same institutions that had formerly served the Falange administrations. After some three decades the younger 'democracy generation' of jurists began to investigate issues that had been 'overlooked' by the early reformers in pursuit of creating a peaceful and lasting state which would adopt fully European values at some later time.

Corruption cases in the post-Franco era

GAL

In 1987 a judge in his early thirties, Baltasar Garzón led an investigation which led to the conviction of a former (Socialist) Interior minister, who had adopted a clandestine policy of State terrorism via operations of the Grupos Antiterroristas de Liberación (GAL), - a collection of criminal gangs who (formerly on the covert behalf of the Falange) were still fighting Franco's dirty war against the Basque separatist ETA movement. The case was vigorously defended and appealed, to the Constitutional Court of Spain where sentence confirmed by four votes to three, and later endorsed by the European Court of Human Rights

Rumasa and Nueva Rumasa

Rumasa (Ruiz Mateos SA) was founded in 1961 by the family of José María Ruiz Mateos. It originally exported wine to England. In 1983 it had become very large (allegedly because it was linked to Opus Dei) and so debt-ridden that it was nationalized by the socialist PSOE government of Felipe González "in the public interest".

At the time it consisted of more than 700 companies, with a staff that reached 60,000 people, with an annual turnover of about 350,000 million pesetas (more than 2,000 million euros) Eventually parts of the empire were re-privatized.

The group, was originally rooted primarily in the wine sector, and diversified into banking. Its gradual but massive growth occurred through the acquisition of companies with financial problems so that it became a group of companies that (supposedly) supported each other. RUMASA was present in the following sectors:

• Wine production: Bodegas (Wineries) included Paternina, Garvey, Bodegas Franco-Españolas, René Barbier, Segura Viudas, Conde de Caral
• Banking: including the Banks Atlantic, Jerez, Banking Masaveu, Exbank, AVA, Eurobank, Banfisa
• Hospitality:The hotel chain "Hotasa"
• Retail: 22 Department Stores "Galerías Preciados" (since integrated into El Corte Inglés) and Spanish luxury goods "Loewe". (now part of the Louis Vuitton, Moët Hennessy LVMH group)

Following the nationalization of his empire Ruiz-Mateos fled to London and started a series of legal cases to recover some of his seized assets. In 1985 he was arrested at Frankfurt airport and extradited to Spain.

The Francoist-leaning Alianza Popular political party (now integrated into the Popular Party) failed to persuade the constitutional court to reverse the sequestration. The High court eventually received a total of 165 claims from Ruiz-Mateos, and eventually resolved a "fair price" settlement (although the family got nothing)

Twelve years later in 1997 (shortly after the People's Party government of José María Aznar took power) the High court absolved Ruiz-Mateos from the criminal charges, and in 1999 also the civil actions, so that his bail bonds were returned.

The family started a new company (Nueva Rumasa) with a "Busy Bee" logo that eventually comprised major brands, including: The Dhul Food Group, which include brands Cacaolat, Carcesa (which owns Apis conserved tomato products as well as Fruco tomatoes and tomato juice), Clesa dairy products, Royne ice cream, Chocolates Trapa. Wine and beverages include Los Conejos & Gabín Garres liquers, rum, rum-punch, sherry, brandy, and other related products.

The company claimed a total of 10,000 employees (the Trade union estimate was 6000) and net worth of almost six billions. It started a huge advertising campaign to attract private investors, and was reprimanded several times by the regulatory authorities, who also issued warnings to existing and potential investors.

In 2011 the firm collapsed with a debt of 700 million Euros spread across some 23 banking institutions, private creditors and government agencies. Most of the debt arose from Dhul an Clesa, which together lost 434 million euros.

In 2012 the founding father José María Ruiz-Mateos was arrested and has again spent time in prison on remand. He is essentially accused of operating a vast pyramid scheme (paying dividends to shareholders from fresh investments). Two of his sons who ran hotels in Andalucia are formal suspects in the ERE trial process.

Naseiro case

The so-called Naseiro case was a corruption investigation within the People's Party shortly after the arrival of José María Aznar to the party presidency in 1989. A magistrate in the Valencian Community issued an indictment against several members of the People's Party including the party treasurer Rosendo Naseiro and Angel Perales Sanchis, a representative for Valencia. Because of the prominence of the accused, the case was heard by the Supreme Court of Spain but shelved for lack of evidence. Nevertheless, the defendants were still strongly suspected of misconduct and expelled from the Popular Party.

Privatisations

In 1997 the People's Party government of José María Aznar announced the sale of the nation's remaining minority stake (golden shares) in the Telefónica telecommunications company and the petroleum group Repsol YPF. as well as in Endesa, Argentaria and Tabacalera, all major enterprises managed by people close to Aznar, and since been declared illegal by the European Union.

This marked the beginning of a period of privatizations which has continued vigorously under PP administrations. A contested case being the Madrid region's public health service, in which the bidders are suspected of very close ties with the governing party, and in one case, run by a former regional health minister, Manuel Lamela.

In 2012 privatized or 'externalized' health services contracted by the Madrid public health service (by some estimates) cost the region 345 millions of euros more than previously similar activities previously performed by that public sector organization itself.

Investigation on Francoist criminals

In October 2008 Judge Baltasar Garzón began to investigate criminal activities of Falange functionaries and ministers who served under Franco. In compliance with the amnesty law of 1977, he ensured each of the 33 accused were already dead. This was strongly resisted by the state prosecutor and the national court. In November that year he devolved the investigation to regional courts rather than become personally embroiled in a fight with right wing opponents intent on burying the past.

In May the following year (2009) the right-wing organization Manos Limpias sought (on similar grounds) to indict the 1930s Republican politician Santiago Carrillo. Garzón rejected the case.

Gürtel case

Main article: Gürtel case

Gürtel is a huge case with a cryptic name relating to one of the principal suspects, construction entrepreneur Francisco Correa, (whose surname means belt in English, or Gürtel in German). It relates to bribery, money laundering and tax evasion implicating a wide circle of powerful businessmen and high politicians belonging to the People's Party who gained an absolute majority in the national elections of Spain.

The affair was first uncovered by the Spanish newspaper El Pais, whose researchers were awarded prizes for investigative journalism. Initial investigations were conducted in Madrid, Valencia & la Costa del Sol by the notable Spanish National Court Judge Baltasar Garzón, an examining magistrate serving the Juzgado Central de Instrucción No. 5.

Although Manos Limpias was party to the initial process, but as the case focussed on wayward politicians they bought an action against Garzón for investigating Francoist atrocities, which caused delay and confusion for Gürtel as Garzón was suspended for three years pending his eventual acquittal in February 2012, whereupon he was charged and convicted of a completely different crime connected to Gürtel: that of ordering the interception of communications between powerful construction company directors accused of bribing high officials and their lawyers, who were suspected of money laundering. His suspension is pending appeal at the European Court of Human Rights which have previously annulled a similar conviction

Francisco Camps

A part of Gürtel detached in 2009, known as the case of Francisco's suits (caso de los trajes), involved the president of the Valencia region Francisco Camps who allegedly accepted very expensive bespoke tailoring paid by corrupt businessmen. He was tried by jury in early 2012, and acquitted by a majority verdict. Similar allegations against the high-fashion handbags of the Lady Mayor of Valencia, Rita Barberá Nolla were dismissed. Camps resigned his presidency to fight his case, but remained a deputy of the Valencia government. Rita Barberá remained in office, but took a beating at the following 2015 city elections. All council members from her list, but her, have been indicted for corruption in another case. She is a senator, and under Spanish law therefore only answerable to a higher court than the one which served those indictments.

Luis Bárcenas

The Gurtel case separated material relating to Luis Bárcenas, who was the treasurer of the conservative party. He subsequently accused his former employer of constructive dismissal Allegedly concessions for major public infrastructure works were obtained by major construction companies in exchange for secret corporate donations amounting to naked bribery during the period 1990 - which funds were kept or accounted-for in the so-called slush fund Barcenas then used this slush fund to pay extra salaries of between 5000 - 15,000 Euros to party leaders each month, including Spanish Government President Mr Mariano Rajoy and his deputy María Dolores de Cospedal.

Spanish law prohibits senior politicians from receiving any income from sources other than the state institutions by which they are employed for defined official duties, and severely restricts political party funding and Political campaign donations.

Large deposits of money amounting to some 38 millions of Euros were found in several foreign bank accounts operated by Barcenas or his agents, suggesting that he may have retained some bribery money for his personal gain.

A national newspaper, El País published the so-called 'Barcenas papers' outlining some of the transactions for some of the alleged financial fraud, and its tival El Mundo later published text messages of support allegedly sent by President Mariano Rajoy to Barcenas, indicating considerable personal friendship and moral support.

on 27 June 2013 High Court Judge Pablo Ruz ordered former Popular Party (PP) treasurer Luis Bárcenas held in custody without bail until his eventual trial The judge set bail at 45 millions of Euros to cover his civil obligations, although the state prosecutor assessed these at a mere 12 millions of Euros

External links to Bárcenas case evidence (in Spanish)

• Todos los papeles de Bárcenas, El Pais The secret 'Barcenas Papers' published by a leading newspaper
• Lo que decía el PP cuando los papeles de Bárcenas eran fotocopias,9/07/13 Authenticity of the 'Barcenas Papers
• Bárcenas abre en canal las tripas del PP ante el juez Ruz, 15/07/2013 Barcenas spills the guts of the party secrets
• El 'pendrive' de Bárcenas eleva a 8,3 millones el dinero negro de Génova, 17/07/2013 A USB flash drive reveals increases to the value of the fraud
• La contabilidad b del PP abierta y pública The PP publishes its (audited) accounts
• Excel colaborativo de los supuestos papeles de Bárcenas publicados por El País Spreadsheet of 'Barcenas papers?
• Excel colaborativo de los supuestos papeles de Bárcenas. Una tabla pública y accesibe que recoge todas las donaciones y los pagos a miembros del Partido Popular publicados primero por el diario El País y luego por El Mundo. Un ejercicio de transparencia que puso en marcha en la red en febrero el periodista Antonio Delgado (@adelgado) More investagitive journalism
• EL MUNDO: SUPLEMENTO ESPECIAL PUBLICADO EN LA VERSIÓN IMPRESA EL 17/07/2013 20 years of funds
• Boceto para entender las cuentas de Bárcenas #AdoptaUnaCorrupto Graph of funds flowing into PP

ERE in Andalusia

Main article: w:es:Caso ERE en Andalucía

(in Spanish Wikipedia)

Employment contract severance conditions in Spain are regulated by law, and usually abbreviated to 'ERE' (expediente de regulación de empleo).

In 2001 the (socialist dominated) regional government of Andalusia presided by Manuel Chaves González (later a Minister of State) gave support to a major commercial supplier of foodstuff (Mercavilla) which was considered to be both strategically important and financially failing. It provided grants for Severance packages and subsidised early retirement pensions as well as commissions for services related to such transactions.

In 2008 the conservative opposition alleged that payments were made irregularly, and the Civil Guard presented evidence of a 'Reptilian Fund' as well as unjustified payments to persons who were not actually employed and excessive commissions to trade-union officials and company directors who managed the transactions.

In consequence, there have been several resignations, probation and bail and even Remand (detention) orders, In August 2013 the long-serving regional president, Manuel Chaves resigned and handed power to his deputy in order to deal with the accusations.

On 19 March 2013, as a result of police Operación Heracles the examining magistrate, Mrs Mercedes Alaya ordered the arrest and detention of 20 people who had held significant positions in society

Palma Arena

Palma Arena is a velodrome in Palma, Majorca which was allegedly constructed to an inferior specification at an exorbitant cost and with much money diverted to politically connected operators. The former president of the Baleares region, Jaume Matas (Partido Popular), received a six years jail sentence, and other aspects of the case are still under investigation.

Nóos

The Nóos case is a spinoff of the Palma Arena case. Instituto Nóos was a Foundation (nonprofit) also known as Strategic Studies Association Sponsorship and Patronage and Noos Institute of Applied Research. Apparently it solicited and accepted huge payments from public bodies for major sports promotional activities which were either trivial or never started. Its directors were Diego Torres Pérez and former handball star Iñaki Urdangarin, Duke of Palma the son in law of the Spanish King, who also ran a consultancy with his wife, the princess Cristina de Borbón y Grecia.

Powerful officials made strenuous efforts to keep the princess out of the case. In 2013 she accepted a position in Vienna, where she moved with the children of the marriage whilst her husband remained in Barcelona to answer charges.

Millet or Palau de la Música Catalana

In 2009 the director of the Palau de la Música Catalana in Barcelona, Fèlix Millet Tusell was accused of systematically raiding the coffers of this public body and confessed to embezzling 3.3 millions of Euros. in 2012 he was placed on bail and the prosecutor sought six years imprisonment as well as massive fines.

Bankia

Bankia is a Spanish bank consisting of several failed financial institutions with largely conservative political direction. On 11 June 2012 the relatively young political party Union, Progress and Democracy (UPyD) filed a lawsuit against the directors of Bankia and its main subsidiary for alleged fraud, misappropriation, falsification of financial statements in connection with corporate crime, mismanagement and scheme to alter the price of assets. The Indignant Protesters (M-15) raised 15,000 euros by crowd funding, and filed another lawsuit for false accounting and commercial fraud

Judge Fernando Andreu agreed to hear both complaints which called 27 defendants which included: Rodrigo Rato (President and former conservative minister of Economy), José Luis Olivas (Deputy director and former conservative president of the Valencia region), Francisco Angel Acebes(director and former secretary general of the conservative party) and Francisco Verdú (an experienced banker and sometime consultant to the construction industry). Also called as witnesses were former Governor of the Bank of Spain, Miguel Angel Fernández Ordóñez, the president of the National Securities Market, Julio Segura, and the author of the Bankia audit conducted by Deloitte, Francisco Celma. However, the court dismissed the request to extend the complaint to four other directors who were not in the Bankia prospective but who took office after the company was listed on the stock exchange.

See also

• Crime in Spain
• Corruption in Navarre

External links

• Spain Corruption Profile from the Business Anti-Corruption Portal

A world map of the 2014 Corruption Perceptions Index by Transparency International