Rodrigo Rato, the former head of the International Monetary Fund and deputy prime minister of Spain, was detained by customs agents in Madrid on Thursday night as the tide of corruption allegations swamping the country’s political establishment reached a fresh high.
Rato, 66, is being investigated for possible money laundering after he took advantage of a 2012 tax amnesty to repatriate previously undeclared offshore funds, Justice Minister Rafael Catala said on Thursday.
After a court ordered a search of his home in the exclusive neighborhood of Salamanca in downtown Madrid, Rato was led to a car wearing a dark blazer and driven away by agents shortly after 8 p.m. Rato told El Pais newspaper that he is at home with his family after having been released shortly after midnight on Friday and that he had collaborated with investigators.
“This will be the image the people remember from the crisis,” Jose Carlos Diez, an economics professor at the University of Alcala, said in a telephone interview. “This is the iconic moment that marks the end of a cycle.”
Rato’s lawyer Ignacio Ayala wasn’t immediately available for comment when contacted by phone at his offices in Madrid and nor was a spokesman for the customs agency.
Once the face of Spain’s economic resurgence after guiding the country into the euro, Rato became the most senior international policy maker in his country’s history when he took over the IMF in 2004. He cut short his term in Washington to return home and was handed the chairmanship of Bankia SA, which collapsed on his watch in 2012 forcing Spain into a bailout.
Rato is already an official suspect in the National Court’s criminal investigation into Bankia. He told parliament he is innocent of any wrongdoing.
In 2013 the former treasurer of the governing People’s Party Luis Barcenas said that he’d run a secret slush fund for senior officials including Rato and Prime Minister Mariano Rajoy for over a decade. Rajoy denied receiving the payments and Rato’s lawyer Ayala declined to comment through an assistant when contacted at the time.
With Socialist officials in Andalusia being investigated over the embezzlement of benefit funds, voters have turned against the country’s traditional parties and two new groups, the pro-market Ciudadanos and anti-austerity Podemos, have soared in polls.
Rato’s detention “is bad news for Rajoy,” said Antonio Roldan, a London-based political analyst at Eurasia Group. “But it’s not so bad, because Rato is part of that elite that was already dead politically.”
A court in Madrid ordered the search of Rato’s apartment under an investigation started by the Madrid prosecutor, which filed a complaint against Rato and other persons, the Madrid High Court said in an e-mailed statement.
Rato, who served as finance minister as well as deputy prime minister in Jose Maria Aznar’s government, said he had no knowledge of any investigation in an interview with Cadena Ser radio station early on Thursday. He declined to comment on the tax amnesty.
“What’s being investigated by the anti-money laundering service is whether the origin of those repatriated earnings was legal or illegal,” Catala, the justice minister, said in a video on Efe’s website.