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Spain’s Slow-Moving Scandal Edges Closer to the Top Spain’s Real Crisis Is a Leadership Void, Analysts Say
(about 3 hours later)
MADRID — The sense of scandal surrounding Prime Minister Mariano Rajoy has crested yet again, after another week of allegations and denials in which the former treasurer of his Popular Party continued to drip-feed the news media glimpses of ledgers that appear to show that Spain’s leadership enriched itself for years from a secret slush fund.MADRID — The sense of scandal surrounding Prime Minister Mariano Rajoy has crested yet again, after another week of allegations and denials in which the former treasurer of his Popular Party continued to drip-feed the news media glimpses of ledgers that appear to show that Spain’s leadership enriched itself for years from a secret slush fund.
But while the accusation may be simple enough, the case is not. The former treasurer, Luis Bárcenas, seems less than fully credible: he has been jailed as a flight risk, having previously withheld information from the courts about secret Swiss accounts. Mr. Rajoy may well stonewall, seeking to string out the case beyond the end of his scheduled mandate in 2015 and the next election. The overburdened courts appear incapable of digging to the bottom on the matter with real speed.But while the accusation may be simple enough, the case is not. The former treasurer, Luis Bárcenas, seems less than fully credible: he has been jailed as a flight risk, having previously withheld information from the courts about secret Swiss accounts. Mr. Rajoy may well stonewall, seeking to string out the case beyond the end of his scheduled mandate in 2015 and the next election. The overburdened courts appear incapable of digging to the bottom on the matter with real speed.
For the moment, the result is less a crisis for Mr. Rajoy — though he is certainly damaged — than one for Spain, its national morale and the credibility of its institutions, carrying the risk that the steady drumbeat of allegations will deny recession-hit Spain strong leadership and distract the government from pressing economic concerns as the scandal unspools, analysts say, possibly for years.For the moment, the result is less a crisis for Mr. Rajoy — though he is certainly damaged — than one for Spain, its national morale and the credibility of its institutions, carrying the risk that the steady drumbeat of allegations will deny recession-hit Spain strong leadership and distract the government from pressing economic concerns as the scandal unspools, analysts say, possibly for years.
However, the stakes in the case are rising, and some senior party officials have begun seeking to isolate and disparage Mr. Bárcenas — raising the possibility that he might retaliate by sharing more of his knowledge of the party’s inner workings.However, the stakes in the case are rising, and some senior party officials have begun seeking to isolate and disparage Mr. Bárcenas — raising the possibility that he might retaliate by sharing more of his knowledge of the party’s inner workings.
Mr. Bárcenas, who is being investigated on suspicion of tax fraud and other financial crimes, has been held in custody outside Madrid since June. With each court appearance — his next is Monday — speculation mounts that he will turn on his former party colleagues. After visiting Mr. Bárcenas last week, Miguel Duran, a lawyer and a friend, told RAC1 radio that Mr. Bárcenas had told him “interesting things.”Mr. Bárcenas, who is being investigated on suspicion of tax fraud and other financial crimes, has been held in custody outside Madrid since June. With each court appearance — his next is Monday — speculation mounts that he will turn on his former party colleagues. After visiting Mr. Bárcenas last week, Miguel Duran, a lawyer and a friend, told RAC1 radio that Mr. Bárcenas had told him “interesting things.”
“He has enough information to make the government fall,” Mr. Duran said.“He has enough information to make the government fall,” Mr. Duran said.
By Thursday, Mr. Bárcenas was being called “a delinquent” by Alfonso Alonso, the party’s parliamentary spokesman, who also described him as one “for whom lying has become a way of life.” But Mr. Alonso acknowledged that “there has been a corruption ring, which is what we want the judiciary to clarify.”By Thursday, Mr. Bárcenas was being called “a delinquent” by Alfonso Alonso, the party’s parliamentary spokesman, who also described him as one “for whom lying has become a way of life.” But Mr. Alonso acknowledged that “there has been a corruption ring, which is what we want the judiciary to clarify.”
In February, in contrast, when Mr. Rajoy made a weekend television address to deny the existence of a slush fund, he made no mention of Mr. Bárcenas and the Swiss money, instead defending the fiscal rectitude of all his party colleagues. “All our tax contributions have been made within the strictest legality over all these years,” Mr. Rajoy said then.In February, in contrast, when Mr. Rajoy made a weekend television address to deny the existence of a slush fund, he made no mention of Mr. Bárcenas and the Swiss money, instead defending the fiscal rectitude of all his party colleagues. “All our tax contributions have been made within the strictest legality over all these years,” Mr. Rajoy said then.
Mr. Alonso’s portrayal of Mr. Bárcenas was “a major change in the party discourse and some form of reality check,” said José María de Areilza, a law professor at the Esade business school.Mr. Alonso’s portrayal of Mr. Bárcenas was “a major change in the party discourse and some form of reality check,” said José María de Areilza, a law professor at the Esade business school.
Mr. Bárcenas left his post in 2009, reportedly with a trove of documents, after being drawn into what appeared to be a mundane graft investigation. The issue was whether mayors and other regional politicians from the Popular Party had taken bribes from a conglomerate led by an entrepreneur and developer, Francisco Correa, in exchange for no-bid contracts. Mr. Bárcenas at the time denied ever having had money in Switzerland.Mr. Bárcenas left his post in 2009, reportedly with a trove of documents, after being drawn into what appeared to be a mundane graft investigation. The issue was whether mayors and other regional politicians from the Popular Party had taken bribes from a conglomerate led by an entrepreneur and developer, Francisco Correa, in exchange for no-bid contracts. Mr. Bárcenas at the time denied ever having had money in Switzerland.
However, since January, investigators have unearthed at least 47 million euros, or $61.4 million, that they say he stashed offshore, in Switzerland but also possibly in other countries.However, since January, investigators have unearthed at least 47 million euros, or $61.4 million, that they say he stashed offshore, in Switzerland but also possibly in other countries.
The financial crimes unit of the Spanish police released a report in May in which it said that it had identified 19 of the fund’s corporate donors, which had received public contracts worth more than $15 billion from conservative politicians over a decade.The financial crimes unit of the Spanish police released a report in May in which it said that it had identified 19 of the fund’s corporate donors, which had received public contracts worth more than $15 billion from conservative politicians over a decade.
Last week, the newspaper El Mundo published ledgers it said were parallel financial accounts kept by the Popular Party. The information mirrored allegations made in late January by another Spanish paper, El País, which reported that the ledgers showed secret payments to Mr. Rajoy and other party members for nearly 20 years, ending in 2008, when Spain’s construction boom ended.Last week, the newspaper El Mundo published ledgers it said were parallel financial accounts kept by the Popular Party. The information mirrored allegations made in late January by another Spanish paper, El País, which reported that the ledgers showed secret payments to Mr. Rajoy and other party members for nearly 20 years, ending in 2008, when Spain’s construction boom ended.
Mr. Rajoy and other party officials have denied wrongdoing, as has Mr. Bárcenas.Mr. Rajoy and other party officials have denied wrongdoing, as has Mr. Bárcenas.
With a bulletproof majority in Parliament and elections not due until 2015, Mr. Rajoy is in little immediate danger of being nudged from power. But the persistent questions about the fund have pushed him and his inner circle toward blanket denials that leave them little room to maneuver if Mr. Bárcenas divulges more damning information or the investigation otherwise deepens.With a bulletproof majority in Parliament and elections not due until 2015, Mr. Rajoy is in little immediate danger of being nudged from power. But the persistent questions about the fund have pushed him and his inner circle toward blanket denials that leave them little room to maneuver if Mr. Bárcenas divulges more damning information or the investigation otherwise deepens.
Proving any illegal party funding is likely to be an uphill struggle, given the murkiness of rules governing the financing of Spanish parties — something that Mr. Rajoy’s government is in the process of tightening. But the questions have already helped sink Mr. Rajoy’s popularity to record lows. His government has also faced mass demonstrations, as citizens blame its austerity push for their worsening conditions and a record unemployment rate of 27 percent.Proving any illegal party funding is likely to be an uphill struggle, given the murkiness of rules governing the financing of Spanish parties — something that Mr. Rajoy’s government is in the process of tightening. But the questions have already helped sink Mr. Rajoy’s popularity to record lows. His government has also faced mass demonstrations, as citizens blame its austerity push for their worsening conditions and a record unemployment rate of 27 percent.
Only 23 percent of respondents would now vote for the Popular Party, according to a telephone survey by Metroscopia, a pollster, and published by El País this month. That is near the lowest level since Mr. Rajoy came to power in November 2011. Meanwhile, 86 percent of those surveyed said that they did not trust Mr. Rajoy. The survey was based on interviews with 1,000 adults and has a margin of sampling error of plus or minus 3 percentage points.Only 23 percent of respondents would now vote for the Popular Party, according to a telephone survey by Metroscopia, a pollster, and published by El País this month. That is near the lowest level since Mr. Rajoy came to power in November 2011. Meanwhile, 86 percent of those surveyed said that they did not trust Mr. Rajoy. The survey was based on interviews with 1,000 adults and has a margin of sampling error of plus or minus 3 percentage points.
Still, the Socialists and other parties continue to trail the Popular Party, according to Metroscopia’s latest poll, showing the extent and depth of the discontent and mistrust in Spain, as politicians, the monarchy and almost every other institution have become entangled in the web of fraud investigations, many related to building contracts awarded before the bursting of the country’s construction bubble.Still, the Socialists and other parties continue to trail the Popular Party, according to Metroscopia’s latest poll, showing the extent and depth of the discontent and mistrust in Spain, as politicians, the monarchy and almost every other institution have become entangled in the web of fraud investigations, many related to building contracts awarded before the bursting of the country’s construction bubble.
On Sunday, the Socialist party urged Mr. Rajoy to resign, after El Mundo released copies of text messages it said were exchanged by Mr. Rajoy and Mr. Bárcenas, suggesting the prime minister had shown solidarity with his ex-treasurer even after the discovery of the Swiss account.On Sunday, the Socialist party urged Mr. Rajoy to resign, after El Mundo released copies of text messages it said were exchanged by Mr. Rajoy and Mr. Bárcenas, suggesting the prime minister had shown solidarity with his ex-treasurer even after the discovery of the Swiss account.
Last week, the Popular Party rejected a call from opposition parties for Mr. Rajoy to appear in Parliament and explain exactly how the party’s finances had been managed. Meanwhile, prosecutors started naming senior party officials they want to appear as witnesses.Last week, the Popular Party rejected a call from opposition parties for Mr. Rajoy to appear in Parliament and explain exactly how the party’s finances had been managed. Meanwhile, prosecutors started naming senior party officials they want to appear as witnesses.
“Rajoy is the ultimate resistance fighter, and he has clearly decided that time will play in his government’s favor,” said José Ignacio Torreblanca, a political columnist and head of the Spanish office of the European Council on Foreign Relations, a research group. But he said stalling could be “a big mistake.”“Rajoy is the ultimate resistance fighter, and he has clearly decided that time will play in his government’s favor,” said José Ignacio Torreblanca, a political columnist and head of the Spanish office of the European Council on Foreign Relations, a research group. But he said stalling could be “a big mistake.”
“A prime minister should not only ask people to trust him,” Mr. Torreblanca said, “but instead present a credible story about exactly what happened when faced with such accusations.”“A prime minister should not only ask people to trust him,” Mr. Torreblanca said, “but instead present a credible story about exactly what happened when faced with such accusations.”