Saturday, February 02, 2013

Spain: Spain's corruption eruption

Published on Feb 1, 2013 In austerity-struck Spain, street protesters are screaming for the government to resign over the latest corruption scandal. At the head of the conservative People's Party (PP), Prime Minister Mariano Rajoy has said he will speak publicly on the matter on Saturday. It concerns allegations that members benefited from a slush fund fed by private companies for years.

Spain's main rival newspapers, the liberal El Pais and conservative El Mundo flushed the story into the open two weeks ago, revealing excerpts of almost two decades of handwritten accounts that it said were maintained by People's Party treasurers.

The papers said the accounts showed more than a decade of payments to Rajoy of more than 25,000 euros per year. This has undermined his reputation for honesty.

Former PP treasurer Luis Barcenas stepped down in 2009 when judges began to investigate his possible involvement in alleged illegal payments from builders and other businesses which won government contracts.

A PP source said the allegations, if confirmed, raise serious ethical questions especially because politicians granted large numbers of development contracts during Spain's building boom.

The party and its leader and Barcenas deny the corruption allegations.

Rajoy has said: "There were people who are no longer members. I can only say that if I find there was irregular or inappropriate conduct, I will not waiver."

The party said its payments to its leaders and staff were always legal.

Until recently, according to a PP source, Spanish political parties were allowed to receive anonymous donations, but they had to appear in the official accounts.

The alleged payments may therefore not necessarily be illegal, but the income would have had to be declared in tax statements.

Rajoy has been in office as prime minister for just over a year.

Deputy Prime Minister Soraya Saenz de Santamaria said his conduct had always been exemplary.