In Spain, Governing Party Denies Illicit Payouts

http://www.nytimes.com/2013/07/10/world/europe/in-spain-governing-party-denies-illicit-payouts.html

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MADRID — Spain’s governing Popular Party on Tuesday denied a report alleging that Prime Minister Mariano Rajoy and other senior party leaders had received payments from a party slush fund.

The report, published in the newspaper El Mundo, mirrors allegations made in late January by another Spanish paper, El País, which published ledgers that it claimed were the party’s parallel financial accounts. They were allegedly managed over two decades by former party treasurers, including Luis Bárcenas, who is now in prison, and involved regular payments to Mr. Rajoy and others above their official salaries.

At the time, Mr. Rajoy categorically denied receiving any illegal payment as well as the existence of such a party fund, describing the ledgers published by El País as “apocryphal.” In response to El Mundo’s latest documents, which it claims to have received directly from Mr. Bárcenas, the Popular Party once more denied any wrongdoing.

“All payments to officials and staff of the party have always been made in accordance with the law and in respect of the corresponding tax obligations,” the Popular Party said in a statement.

Mr. Bárcenas was sent to prison last month, pending a trial, after the judge investigating possible tax fraud and other financial crimes decided that Mr. Bárcenas presented a flight risk.

Mr. Bárcenas has been at the heart of a widening fraud investigation since January, after he was found to have amassed millions of euros in secret Swiss bank accounts.

Despite the party’s forceful denial of wrongdoing, it has so far been unable to distance itself from a spreading graft scandal on which the judiciary is yet to rule. And at a time of recession and economic hardship, the scandal has also helped sink Mr. Rajoy’s popularity to record lows in opinion polls.