UNDERGROUND ECONOMY

Employer group number two accused of paying workers in cash

Fernández of the CEOE made regular cash payments in envelopes, radio station SER reports Businessman acknowledges there may have been “irregularities”

Arturo Fernández during an appearance on TVE state television.
Arturo Fernández during an appearance on TVE state television.EFE

Arturo Fernández, the number two at the Spanish Confederation of Business Organizations (CEOE), systematically paid his workers overtime hours at his catering business in black-market money, radio station SER reported on Monday, quoting employees of his Grupo Arturo Cantoblanco company.

SER said workers received white envelopes with their names on them and containing between 100 and 700 euros, up to half of their salary. The practice could constitute a form of defrauding both the tax agency and the Social Security system.

In a series of interviews with Cadena SER, waiters, chefs and supervisors confirmed the practice.

Fernández, who also heads the Madrid chapter of the CEOE (CEIM) and the Madrid Chamber of Commerce, told SER that extra hours worked by his employees were included within their monthly pay check. “This is done through a system, of which I am honestly not aware,” he told the radio station.

The CEOE said the issue was a “personal” one for Fernández

Fernández also spoke to the television station Antena 3. “Our lawyers are studying the information given by Cadena SER. If there are any irregularities, and there could be, that’s a matter for the labor inspection department. If there are, then they should say so [...] but the news is out of proportion,” he said. “I deny having paid salaries under the table.”

The CEOE said the issue was a “personal” one for Fernández. The former head of the CEOE, Gerardo Díaz Ferrán, is currently in jail following accusations of tax fraud and money laundering. Spain has been rocked by a series of financial scandals that have hit the king’s son-in-law, Iñaki Urdangarin and the ruling Popular Party, which allegedly paid its officials cash bonuses in envelopes.

Grupo Arturo Cantoblanco was founded over a century ago in Madrid by Fernández’s grandfather. It has 2,500 employees and has concessions to provide catering services to Congress, the Madrid regional assembly and a number of government ministries, among other clients.

According to documents unearthed as part of the ongoing Gürtel kickbacks-for–contracts scandal. Fernández donated 60,000 euros to Fundescam, an organization closely linked to the Madrid branch of the PP.

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