Rajoy’s Former Allies on Trial in Spain Over 15 Years’ Kickbacks

  • Defendants accused of channeling funds to Swiss accounts
  • Plaintiffs asked court to call Rajoy to witness stand

The focus of Spain’s political class will shift away from the gridlocked parliament on Tuesday to the National Court, where a network of businessmen and former officials tied to caretaker Prime Minister Mariano Rajoy’s People’s Party face trial for fraud.

Thirty-seven people including former PP treasurer Luis Barcenas are accused of running a bribery ring over at least 15 years. The 300-odd witnesses called will include most of the leading PP figures of Rajoy’s generation, such as former International Monetary Fund managing director Rodrigo Rato.

Luis Barcenas

Photographer: Gonzalo Arroyo Moreno/Getty Images

The trial centers on Francisco Correa, an events’ organizer, who allegedly created a network of companies to channel kickbacks from firms bidding for public contracts awarded by PP officials. Codenamed Gurtel, the case will cover the period between 1999 and 2005, leading up to and immediately following Rajoy’s appointment as party leader in 2004. Barcenas denies any wrongdoing and Correa’s lawyer, Juan Antonio Gragera, said his client plans to plead innocent.

The hearing follows an eight-year investigation that has provided the backbeat to Rajoy’s time in office and became a symbol of the corruption of the Spanish political class. As the trial begins, Rajoy is aiming to take office for a second term. His main rival, Socialist leader Pedro Sanchez, was ousted by an internal revolt at the weekend raising the chances of a deal to end the country’s nine-month political gridlock.

“This will remind Spaniards that the political crisis is still with us,” Lluis Orriols, a political scientist at Madrid’s Carlos III University, said in a telephone interview.

Swiss Accounts

Rajoy lost his majority in December’s election when voters enraged by the consequences of the economic crisis and a wave of corruption allegations against the PP in particular turned to new parties like the anti-austerity group Podemos. Though Rajoy won the most seats in December and a repeat vote in June, he’s failed to recruit enough support to win a confidence, with opponents saying his ties to party graft make him unfit to govern. Rajoy denies any wrongdoing.

The Gurtel case is the most comprehensive of more than two dozen involving actual or former PP officials moving through the Spanish courts and will last at least three months. Another case, which may examine the acting prime minister’s possible ties to a secret party slush fund, is due to come to trial after the Gurtel case.

Correa and his associates are accused of misusing public money from at least six different authorities including the regional governments of Castilla y Leon and Madrid, two PP strongholds, and setting up a network of offshore accounts to keep the funds out of reach of Spanish authorities. Investigators sent out 183 information requests to 21 countries including Switzerland and the U.K. as they traced the group’s funds.

The PP itself and Rajoy’s former Health Minister Ana Mato both face civil liabilities for benefiting from the scheme, though neither faces criminal charges. The judges denied a request from one of the plaintiffs to call Rajoy as a witness, though they could still reverse that decision later in the proceedings. As well as Rato, Senator and PP executive committee member Javier Arenas and Former Interior Ministers Jaime Mayor and Angel Acebes will also be called.

“It will be a source of permanent irritation for Rajoy and his party,” Pablo Simon, a political science professor at Carlos III University in Madrid, said in a telephone interview. “Still, once there is a government, they will have more chance to distance themselves from the officials or former officials who appear to be most toxic.”

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