Bloomberg News

Spain’s Rajoy Says Allegations of Graft Against Him are ‘False’

February 02, 2013

Spanish Prime Minister Mariano Rajoy said reports in El Pais newspaper that he or members of his party received illegal payments are wrong and stem from allegations made by unknown persons trying to damage his party.

“It’s false, I have never received or shared out illegal payments within the party or anywhere else,” the premier said during a press conference in Madrid today. “These allegations come from unknown people who have something to gain and I repeat the party hasn’t, nor has ever had, accounts abroad.”

El Pais, Spain’s best-selling newspaper, reproduced on Jan. 31 what it said were extracts from handwritten ledgers by the former People’s Party Treasurer Luis Barcenas, showing payments to party officials including Rajoy, Maria Dolores de Cospedal, general secretary of the party, and the former managing director of the International Monetary Fund, Rodrigo Rato. The records show Rajoy received 25,200 euros ($34,100) a year for 11 years from a secret fund set up by Barcenas, El Pais said.

The allegations come as Rajoy grapples to implement the harshest austerity measures in Spain’s democratic history to contain a deficit and rein in borrowing costs which hit a euro- era high of 7.75 percent in July. The prime minister vowed today to stay on, saying he never became a politician with the aim to make money and that he’s undeterred by the allegations.

Alleged Contributions

Barcenas said in a statement published on the website of the newspaper ABC earlier this week that he never made illegal payments to officials and never kept secret financial records. Rato’s lawyer, Ignacio Ayala, declined to comment through his assistant when contacted twice by Bloomberg News. Cospedal said the allegations were false in a press conference on Jan. 31.

The accounts show a series of contributions from construction executives and only a portion of the revenue they show was deposited in the party’s official account for donations, El Pais said. Obrascon Huarte (OHL) Lain SA Chairman Jose Miguel Villar Mir paid 530,000 euros between 2004 and 2008 and former Sacyr Vallehermoso SA (SYV) Chairman Luis del Rivero donated 380,000 euros, the newspaper said.

A spokesman for OHL said Villar Mir never made any contributions, either legal or illegal, to the party. A spokeswoman for Sacyr declined to comment.

“If Rajoy has done something illegal, he cannot continue as president of the government,” Oscar Lopez, secretary of the opposition Socialist Party, said in a press conference yesterday televised today by Spain’s 24 channel, “First, the whole truth must be known, and second responsibilities should be assumed.”

Requesting Resignations

A social media website called Change.org has collected 640,850 online signatures from the Spanish public requesting that all members of the People’s Party implicated resign immediately. The petition, which was put up on the site on Jan. 31, is targeting one million signatures.

“If someone believes that because of this harassment that I’ll lose spirit or abandon the task given to me by the Spanish people, then they are wrong,” Rajoy told reporters today, “This government has set itself a task and I assure you it won’t be sidetracked.

Rajoy ordered the party treasurer, Carmen Navarro, on Jan. 21 to conduct an internal investigation of party finances after El Mundo newspaper reported that Barcenas, her predecessor, handed out monthly envelopes containing as much as 15,000 euros in cash to senior party officials. Barcenas’s lawyer, Alfonso Trallero, declined to comment through an assistant when contacted by Bloomberg on Jan 31.

Rajoy also commissioned an external audit of the party’s official finances following the allegations that Barcenas channeled donations from construction companies into a secret cash fund for party officials.

Today, he pledged to make his tax declaration and list of personal wealth accessible to the public by publishing them on the government’s website next week so that they can be scrutinized by all.

‘‘I have worked outside politics and earned more in my private profession than as a politician,” Rajoy said. “But I didn’t become a politician to earn money.”

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net;


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