Spain’s expenses scandal unfolds

1 Feb

Over on the Iberian peninsula, the Spanish government is facing embarrassing questions over its account-keeping. This time the discrepancy was found, not at a national level, but in the expenses roster of the ruling political party, the Partido Popular (PP). The episode evokes memories of the UK’s ‘expenses scandal,’ with MPs making claims for non-essential items like second homes, housing renovations, TV licences, and one multimillionaire member having a septic tank cleaned. Twice.

El Pais has obtained several secret accounts ledgers of the Lapuerta and Barcena, Treasurers of Spain’s ruling political party, Partido Popular (PP). The notebooks contain records of donations by various entrepreneurs, a number of whom have publicly denied contributing to the party; and of salaries and payments to PP members, some of which diverged substantially from officially disclosed accounts. Sources close to the Treasurers say the alternative ‘dome’ payment system was used in order to avoid taxation at the Treasury.

Inflated paychecks?

Among those in receipt of salaries by this payment method were the current PP Secretary General Dolores de Cospedal, and previous Secretary Generals Arenes and Aharez Cascos. They claim that everything the party had claimed was declared to the Treasury, a phraseology which leaves scope for many separate undeclared expenses within this net total. They also maintain they never cashed these payments; sources say that de Cospedal has privately claimed responsibility for putting an end to the practice.

Cross-analysis showed a paycheck, more than that officially declared, was awarded to one of the PP’s main political advisers, who oversaw opinion polls. Pedro Arriola received numerous payments of between €100,000 and €161,000. Miscellaneous party expenses included substantial payments to the head of its legal counsel, which are believed to have been used legitimately, to pay for external legal advice. Less easily explained is the €36,100 contribution to the owner of Internet Portal Libertad Digital, Federico Jimenez.

Shopping trips

Smaller items the notebook lists include bills for clothing: June 2006, €667 for “ties president”; December 2006, €9,100 for “Suits Mariano”; April 2008, €11,020 for an unnamed recipient, “MR Suits”. Because the figure believed to have been defrauded is relatively small, those involved will not be prosecuted for tax fraud, but may be accused of tax evasion. Investigators are still awaiting results of the external and internal audits commissioned on the public accounts.

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The businessmen and entrepreneurs who have been revealed to have made undeclared donations to the PP include an ‘Income’ entry for Pablo Crespo, who was high in the chain of command in a previous scandal, a kickback payment scheme to secure public contracts from the government. He and his co-conspirators Francisco Correa, construction director Alfonso Garcia Pozuelo, and head of Valencia-based Sedesa Service Juan Cotino, have already been successfully prosecuted.

Other donors who wished to remain anonymous were also predominantly from the construction industry. They run as follows: Luis del Rivero (known as R.L.), €120,000 in 2004, while Vice President of Sacyr Vallehermoso, and €260,000 in 2006 when President; ‘JM (Juan Miguel) Villar Mir, €100,000 in 2004, €180,000 in 2006, and €250,000 in 2008, as President of OHL; José Mayor Oreja, brother of the former Interior Minister, €90,000 and €70,000 in 2008 as President of FCC Construcción; ‘Mercadora,’ whose identity is unknown, €90,000 and €150,000.

So… make of that what you will. Let us hope there are no more holes in Spain’s treasury reserves, and that those responsible for the trick, if it is one, are made to pay for it.

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