The redundancy business

Public money earmarked for the unemployed and companies in financial difficulties should be used for those ends. This may be to state the obvious, but the judicial investigation into the ERE case in Andalusia shows increasingly clearly the free and easy way in which funds from the regional government’s labor department were spent over a 10-year period. These acts threaten the credibility of the Socialist Party (PSOE) in Andalusia, which has held power in the region for three decades.

In the layoff fund case, the investigation centers on so-called phantoms (people who received early retirement packages from companies where they had never worked), although it is true that most of the diverted money ended up in the hands of firms that set themselves up as intermediaries between the Andalusian administration and the people who were the intended receivers of funds for being laid off.

These bills for “external costs” were paid because the Junta considered them an essential part of the process, even though now they have been eliminated or reduced. The Civil Guard estimates that 50 million euros in public funds were diverted in this way, but it is likely that the final amount will be even higher as the investigation uncovers more instances of fraud.

It is to be hoped that the recent reactivation of the case — with the return of Judge Mercedes Alaya to her office after a six-month period of illness — proves decisive in bringing those responsible to trial because the investigation has already been ongoing for two-and-a-half years. The number of people now formally targeted in the investigation has reached 82, including the region’s ex-labor chief, Javier Guerrero, who allegedly benefited from the commissions that he himself had authorized. Guerrero left prison after five months by posting bail, but he has now been returned to custody by the investigating judge. Antonio Fernández, the region’s employment commissioner from 2004 to 2010, is currently out on bail, while his predecessor in that post and now a deputy in Congress, José Antonio Viera, has so far been left untouched by the investigation.

There is also another route by which the judge can proceed to investigate why the regional government ignored the warnings of the Comptroller’s Office, which raised the alarm on an opaque and ad hoc system of administrating the layoff fund. The judge’s written conclusions thus far allude to the fact that the head of the Economy and Finance Ministry (the overseer of the Comptroller’s Office) was at that time José Antonio Griñán, the current Andalusian regional premier, although she does not identify him by name.

The Andalusian government is assisting the investigation and has made assurances that it is working toward the recovery of the money that was misused within the labor department. But it is still cause for concern that the administration has yet to provide a proper explanation of how officials in that department were able to cream off public funds for an entire decade without any political authority taking the decision to stop the rot at any point.