Monday, July 22, 2013

100 shades of scandal: Rajoy & Co.

AOG, Madrid

After doing their best to stop the inevitable, and then only after the opposition threatened to stage a vote-of-no-confidence in Parliament, Spain’s ruling Conservative Party, the Partido Popular, and its leader, Spain’s PM, Mariano Rajoy, have agreed that Mr. Rajoy will attend Spain’s Congress to give some sort of explanation about the current political situation in the country.

Although at first he and his party, given their majority in the chamber, ensured he would not, and could not, be forced to show up to be questioned, once the opposition, and more importantly, the foreign media, started to criticise him and began to acknowledge that Spain’s economic recovery might be affected by the PM’s absence, they have staged a U-turn, but one in which Mr. Rajoy ensures everyone that he goes because he wants to and not because he is being forced to go.

Mr. Rajoy, who has enraged the media by staging press conferences at party headquarters in Madrid in one room, and sitting the media in another, all facing an internal broadcast of the proceedings on a plasma screen, has also been in the difficult position of having to answer journalists only during the courtesy press conferences organised whenever a foreign politician visits Madrid.

Of course, whenever this happens, the Spanish media do their best to get the Prime Minister to say something about Spain’s current political scandals – and there are many. 

Surprisingly, during the visit of Romania’s president to Spain this week, it was a Romanian journalist who, in almost perfect Spanish, asked Mr. Rajoy about these, to Rajoy’s, and everyone else’s, surprise.

 It is expected that Mr. Rajoy will go to the Cortes, as Spain’s parliament is known, in August, to give some sort of explanation. 

Nevertherless, critics have already expressed their fear that the prime minister will talk mainly, or only, about Spain's economy and avoid any questions related to the Bárcenas scandal.

Given the latest batch of confessions from the Popular Party’s ex-treasurer, Mr. Bárcenas, statements which point at Mr. Rajoy directly, the level of expectation is very high.

There are many questions which he is expected to answer, although he has already made it clear that he will attend the Cortes to talk about Spain’s economy, and give his “version” of the events, to everyone's chagrin.

Surprisingly to all, Mr. Rajoy has done his best to avoid saying Mr. Bárcena’s name out loud in public, or referring to him in any way, yet nobody seems to know why this is.

And what are some of the most pressing questions in the air?

Well, here’s a few that should be considered.

1-Did Mr. Bárcenas pay him €45,000 in undeclared (black) money?

The ex-treasurer has told the judge that in 2009 and 2010 he paid both Mr. Rajoy, and the Conservative Party’s General Secretary, María Dolores de Cospedal,
€45,000 as undeclared ‘premiums’. 

Thus far the Prime Minister has denied having ever received illegal payments from him. 

Back in February he publicly declared that he had “never” received nor given out “black money in this party or anywhere else”. 

Months later, however, Mr. Bárcenas accused Mr. Rajoy of just this, going as far as explaining that he gave him the money in €500 bills in a brown envelope.

One of Spain’s top newspapers, El Mundo, has published a story whereby Mr. Rajoy may have been receiving illegal payments during his time as Government Minister, from 1996 to 2004. 

Accoring to Mr. Bárcenas, back then the money was given to him inside a cigar box by then treasurer, Mr. Álvaro Lapuerta.

2- Was the Partido Popular financed illegally?

After denying it over and over, Mr. Bárcenas told Judge Ruz, that he indeed was the author of what is known as the ‘Bárcenas papers’. 

A group of documents and ledgers which kept track of all payments within the party and which showed a “parallel” accounting system for the party’s finances. 

Hence, the party’s accounts guardian suggests that the party has been illegally financed for over 20 years. 

The PP has continuously denied that this has been the case and has had its “official” accounts audited by Spain’s Accounts Tribunal. 

Nevertheless, as the Spanish media have pointed, it is hard to audit what they call these ‘B’ accounts.

3- Will he resign?

All of Spain’s opposition parties are clear on this question, Mr. Rajoy should resign. According to the main opposition party, the PSOE, Spain’s Socialist Party, the Prime Minister cannot remain in power when facing the type of accusations his ex-treasurer is making. 

Nonetheless, Mr. Rajoy has said during a press conference that his intention was to see his Administration out and spoke about the need for stability and of his Party’s majority in the Cortes ensuring his presence there. 

However, many in Spain question this and his continued presence in Moncloa Palace, the official residence. 

There is even talk, although it is all very hush-hush, of who will succeed him. 

Among the names being mentioned is Spain’s current Vice-President, Soraya Sáez de Santamaría, and Spain’s Justice Minister, Mr. Gallardón, Madrid’s former Mayor. 

Soraya Sáenz de Santamaría and Alberto Gallardón

4- Will there be any political repercussions?

Thus far, none of the political VIPs mentioned by Mr. Bárcenas have resigned or even made any sort of move that suggests they would. 

The Conservative Party’s ruling body is ignoring all accusations and likes to flaunt its presumed innocence on the matter. The party’s Secretary General, Ms. Cospedal, has said she feels calm and is “looking forward” to collaborating with the legal process. 

In spite of the ‘Papers’ alluding to payments made to many of the party’s top dogs, none have thought it necessary to leave their positions, including Mr. Javier Arenas, the party’s Vice-Secretary General, or MEP, Mr. Jaime Mayor Oreja. According to the ‘Bárcenas Papers’, the main beneficiary of the undeclared ‘premium’ payments would have been their electoral consultant, Mr. Pedro Arriola, who is reputed to have received up to 1.5 million Euros cash, according to El Mundo newspaper.

5- Why did Mr. Rajoy deny that he had been in contact with Mr. Bárcenas?

Back in January, Mr. Rajoy said publicly that he could not remember “the last time” he had seen Bárcenas. In spite of his bad memory, he continued to be in contact with his ex-treasurer through the recently-revealed spat of SMS, one of the dated as far as last March.

Mr. Bárcenas
 Even though they were not seen together, they did keep messaging each other and Mr. Rajoy told him to "be strong". 

When he goes to Parliament, he will have to explain himself on this issue.

6- Why was Mr. Bárcenas made treasurer of the Conservative Party in the first place?

Although he won’t even say his name now, it was Mr. Rajoy who named Mr. Bárcenas party treasurer. He had been the all powerful power-behind-the-throne up until that point and he substituted Mr. Álvaro Lapuerta. 

Ms. Cospedal has called his appointment a “mistake”. He will be expected to explain why he was given that job in the first place.

7- Is Spain’s PM being blackmailed by Mr. Bárcenas?

After the SMS were made public, Mr. Rajoy declared -in a Louis XIV "L'état, c'est moi" moment- that the rule of law (the State) will not be blackmailed, prompting the opposition to declare that it, and the rest of the country, cannot be expected to keep track of a continuous daily stream of revelations. 

 Where once the PP supported its ex-treasurer, it now wants nothing to do with him and many are worried about what he may say against Spain’s Prime Minister.

8- Can the Government’s ‘Brand Spain’ be damaged by scandal?

The idea of Spain as a brand, what they call ‘Marca España’, has been one of Rajoy’s biggest projects, intended as it is to improve the country's image abroad, especially where international investors and money markets are concerned.

Thus far, the ‘Bárcenas Affair’ has been on more international media than any other Spain-related topic. 

Media as influential as The Economist and The Financial Times have warned of the risk to the PM that this scandal represents. 

Whilst Rajoy insists on his electoral majority (something he does as justification for all his party and ministers do) and on the country’s stability as his biggest pillars of support vis-à-vis the EU, the presence of Bárcenas has already gone beyond Spain’s borders and many people are starting to look at Spain differently with who knows what sort of economic and financial repercussions.

9- Did he know about the donations from major construction and other big business firms?

The relationship between Spain’s conservatives and big business is another case in point. For example –according to Bárcenas– Mr. Juan Villar Mir, president of OHL, a large multinational construction and civil engineering company, wanted to donate €300,000 in a very public manner before the 2011 elections and was very interested in Mr. Rajoy knowing this.

10- Were any documents destroyed at Conservative headquarters?

According to Mr. Bárcenas’ sworn declarations, he gave Mr. Rajoy a list of the people who had been in receipt of these ‘premium’ payments (and what these amounts had been) once he was asked to leave the party’s treasury. According to  him, the now PM put the list through the paper shredder.

11- Denial and proof?

Thus far, Spain’s Popular Party has denied just about everything Mr. Bárcenas has told Judge Ruz, even though Mr. Bárcenas has turned in several original documents. Mr. Rajoy should show his own proofs that these documents are not what they appear to be.