Spanish PM Embroiled in Corruption Scandal
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Spanish Prime Minister Mariano Rajoy has been accused of hiding almost 250,000 euros ($340,000) from tax authorities after the El Pais daily published handwritten extracts from what it said were secret accounts for his ruling People’s Party.
El Pais said the documents showed payments were received from a number of well-known Spanish businessmen, which were then used to supplement incomes of senior party officials for more than a decade. The most recent payments were received in 2009.
Spanish Prime Minister Mariano Rajoy has been accused of hiding almost 250,000 euros ($340,000) from tax authorities after the El Pais daily published handwritten extracts from what it said were secret accounts for his ruling People’s Party.
El Pais said the documents showed payments were received from a number of well-known Spanish businessmen, which were then used to supplement incomes of senior party officials for more than a decade. The most recent payments were received in 2009.
The companies involved in the scandal allegedly handed payments to former party treasurer Luis Barcenas, who stepped down in 2009 and is currently under investigation for money laundering. Recent reports suggest he had a Swiss bank account which at one point held as much as 22 million euros.
The PP on Thursday denied the supposed handwritten ledgers and insisted that no party leader received payments outside of their regular salaries. The party’s Secretary General Maria Dolores de Cospedal told reporters all payments to its leaders were clean and legal. Speaking on behalf of the party and Rajoy, she said:
[quote] We have only one set of books and they are clean. We have absolutely nothing to hide. [/quote]
Cospedal, who denied getting payments attributed to her in the documents, threatened to sue El Pais and any media outlets that repeated the allegations. But all major Spanish broadcasters and news websites were carrying the story on Thursday.
Until 2007, Spanish political parties could legally receive anonymous donations, as long as records were made in their official regulated accounts, and beneficiaries declared any extra income in tax statements.
[quote]However, the allegations raise serious ethical questions about the PP’s operations as the bulk of payments were made by construction companies during Spain’s building boom, when politicians granted large numbers of development contracts. [/quote]
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A recent poll showed that 96 percent of Spaniards believe corruption is widespread in politics in Spain, as the country reels from a series of corruption scandals that have engulfed bankers, politicians, town councillors and even the royal family. Inaki Urdangarin, son-in-law of King Juan Carlos, is accused of embezzling millions of euros from charitable organisations.
The PP scandal is also seen as a form of betrayal for many in Spain, who have been asked by Rajoy’s government to accept painful austerity measures to avoid an international bailout.
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Antonio Argandona, professor of Business Ethics and Economics at IESE business school, told the Financial Times:
[quote] The level of trust in politicians in Spain is very, very low, and corruption is one of the main problems. Politicians must tackle this problem before any more damage is done. [/quote]
