PP alleged to have used ghost firms to funnel donations in 1980s

Two decades before the Gürtel kickbacks-for-contracts scandal broke, Popular Party (PP) officials and employees created a series of ghost companies to issue fake invoices to major contributors in an effort to circumvent the country’s party financing laws, according to documents seen by EL PAÍS.

This alleged scheme occurred before the PP’s finances were under the control of its past treasurers Ángel Sanchís, Álvaro Lapuerta and Luis Bárcenas — all of whom are currently under investigation in an ongoing inquiry into party financing. Bárcenas had documents in his possession that explained the alleged inter-workings of the ghost company scheme, which was in place before Sanchís was appointed treasurer in 1982.

According to the allegations, at the end of 1979 the Popular Alliance (AP) — the PP’s predecessor grouping — had no money and was losing support. The AP was led by Manuel Fraga while Jorge Verstrynge was the secretary general. It was decided to set up companies into which businessmen could “pay,” and the money would be funneled to the AP, five former PP officials have confirmed to EL PAÍS. “At the end of 1979 and the beginning of the 1980s, the national committee told us that we needed to create some companies so that businesses could give us money. And that is what we did,” said one source.

The firms were liquidated by Sanchís when he came aboard.

Another former PP official said that the party collected between 30,000 and 35,000 euros in each transaction.