Deepening corruption scandals rock Spanish government, royal family

Friday, February 1, 2013 - 4:00am

Just one day after a tense debate in Spanish parliament on how to stop political corruption, a leading newspaper published Thursday what it said were handwritten documents detailing 19 years of secretive payments to leaders of the ruling conservative Popular Party.

El Pais newspaper said the alleged payments through 2009 -- off the party's normal books -- went to Mariano Rajoy, a longtime party leader and Spain's prime minister since December 2010, and to numerous other current or former top party officials.

The party quickly issued a statement Thursday morning, denying any "hidden accounts" and insisting that all payments to party leaders have been "legal and in compliance with tax obligations."

Thursday evening, hundreds of protesters reacting to the report gathered near the ruling party's headquarters. They were kept back a distance from the building itself by riot police on two ends of a long street.

The protesters called for the prime minister to resign and sarcastically chanted, "Our taxes are your envelopes," a reference to the secretive cash payments reported to have occurred.

The latest allegations -- making headlines across all Spanish media -- came as corruption scandals, affecting several political parties and even the royal household, have rocked the nation during its deep economic crisis, with a recession and an unemployment rate of 26%.

Corruption was seen as a key problem by 17% of Spaniards in the government's main "CIS" survey last December, nearly double the rate of the previous month and the highest rate by far since the term "corruption and fraud" was included in the poll 11 years ago.

El Pais reported that the money came into Popular Party coffers through secretive donations from construction firms and other businesses, and was used for various purposes, including tens of thousands of dollars in secretive payments to party officials.

El Pais reported that the individuals and companies cited in the alleged documents have denied giving or receiving party funds in an off-the-books manner.

A former Popular Party treasurer, Luis Barcenas, is under investigation for an alleged multimillion-dollar account in Switzerland. El Pais headlined its story Thursday: "The secret papers of Barcenas."

Another newspaper, ABC, headlined its story: "Luis Barcenas accuses the Popular Party leadership of having collected in B," the letter Spaniards typically mention when referring to secretive payments made in cash, with the aim of avoiding taxes.

Dolores de Cospedal, the Popular Party's secretary general, was critical of the reports on Rajoy. "The only aim of this alleged information is to hurt the Popular Party, its leaders, and certainly to hurt the prime minister," she said.

But opposition socialists said there is a quick way to clear up any doubts.

Said Alfredo Perez Rubalcaba of the Socialist Party: "I ask that the prime minister himself makes an appearance to answer two simple questions: Did he collect these payments or not; and if so, off the books or aboveboard?"

A separate scandal is affecting Spain's royal household, where King Juan Carlos' son-in-law has been a suspect in a fraud case since last year.

Inaki Urdangarin, who was granted the title of Duke of Palma when he married the king's youngest daughter, Princess Cristina, in 1997, is under investigation for allegedly diverting public funds that were earmarked for his foundation for private use.

A judge has ordered Urdangarin and a former business associate, Diego Torrres -- both of whom profess their innocence -- to deposit a joint bond of 8 million euros ($10.8 million) for potential civil damages. If not, the judge would move to embargo assets of the two men, a court spokeswoman said.

And this week, the secretary of Princess Cristina and her sister, Princess Elena, was named as a suspect in the same case. The secretary, Carlos Garcia Revenga, denies any wrongdoing and has been called to testify at a preliminary hearing in late February.

The Socialist Party in past years has been hit by corruption scandals involving large sums of money and top officials. Last week, the party forced out the director of a party foundation after allegations that he and his wife received payments for articles written under a pseudonym. The Socialists called on other parties to also come clean when hit by scandals.

The Catalan nationalist Convergence and Union coalition, or CiU, the ruling party in the northeastern region of Catalonia, also has seen recent allegations of corruption against current or former leaders, and some of their family members. All of these allegations have also been denied.

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