THE PP'S HIDDEN FINANCES

Reconstructing PP ex-treasurer’s five hours of revelations to judge

Bárcenas provides names, dates and figures relating to alleged illegal party financing

Luis Bárcenas wanted to tell his version of events, and he wanted to do it in one go. That is why he did not take a single break during the five-and-a-half hours that he spent inside the High Court, testifying before Judge Pablo Ruz on the inner workings of the Popular Party (PP), whose finances he handled for years.

"I would rather be done as soon as possible and return to Soto del Real," he said, in reference to the penitentiary where he is now residing in preventive custody on charges of tax fraud, bribery of public officials, document forgery and money laundering.

His statements, according to sources who were present, were filled with compromising revelations about the individuals who have run Spain's center-right party for the last two decades. These same sources felt that Bárcenas did not speak out of contrition for his alleged crimes, nor out of any soul-searching he may have done during the two weeks he has spent in jail. Rather, he seemed to be motivated by a mixed desire for revenge and self-defense. There were major revelations that could easily top the political agenda for weeks to come, but also selective silences and fits of amnesia.

Aware of the potential damage that an angry Bárcenas could inflict on his former political allies, the government last week sought to convey a sense of confidence and stated that Prime Minister Mariano Rajoy's honesty was beyond doubt. In the meantime, the PP used its absolute majority to stonewall the opposition's attempts to force Rajoy to enlighten Congress about these allegations of cash bonuses.

Before beginning his statement, Bárcenas asked for permission to wear a tie

Before beginning his statement, Bárcenas asked for permission to wear a tie as he has in his nine previous court appearances. After having his request granted, the once-powerful PP official began by dropping a bombshell: "It is not true that there are no B [undeclared] accounts."

With these words, Bárcenas went back on what he had been claiming for the last five months: that the 14 pages published by EL PAÍS on January 31 showing handwritten notes that reflected illegal donations to the PP from construction firms, as well as cash outlays to top party officials between 1990 and 2008, were not his. Their publication led to the present court investigation — though there are other parallel proceedings against Bárcenas for his alleged involvement in the Gürtel kickbacks-for-contracts scheme, as well as tax fraud after he was found to have 47 million euros stashed away in foreign accounts.

"That is my handwriting [...] EL PAÍS' papers are authentic," he said. The secret ledgers reflect illegal payments to the party worth 7.5 million euros between 1990 and 2008 and the use of this money to pay campaign cost overruns and cash bonuses to top party leaders, including Prime Minister Mariano Rajoy and María Dolores de Cospedal, the party secretary general.

Bárcenas arrived at court with reams of documents to support his claims, which he kept in nine folders and on a pen drive. But he added that there were still several important documents in his possession that he would give the court at a later date.

Bárcenas arrived at court with reams of documents to support his claims

One of the elements of the "Bárcenas papers" that the PP has most hotly denied is the payment of nearly 3.6 million euros in cash bonuses to top leaders. According to these accounts, campaign strategy adviser Pedro Arriola took home the largest amount: a total of 778,012 euros from 1990 to 1993 and from 2002 to 2003. "Yes, there were bonuses," said Bárcenas. "The money was always handed out in the presence of [previous PP treasurer [Álvaro] Lapuerta." The money was always paid "in cash and on a monthly basis depending on liquidity," and its beneficiaries were the party president, secretary general and deputy secretaries.

"There are only notes to 2008 but there were payments up to 2010," he said, mentioning that Rajoy and De Cospedal received their bonuses in brown envelopes with their names on them and 500-euro bills inside.

Luis Bárcenas had prepared his statements carefully, and despite his volubility on most points, took care not to admit too much guilt. "The donations did not have any compensation," he said about the money that developers paid the PP. To say the contrary would have made him an accessory to the crime of accepting money in exchange for public contracts. At one point, however, Bárcenas did state that "we were violating party financing legislation." A police report found that the larger donations were broken down so as not to surpass the legal limit of 60,000 euros.

We were violating party financing legislation,” the former treasurer said

Additionally, Bárcenas stated that both the party president and the secretaries general were aware of these illegal donations. "Lapuerta would inform them periodically about it," he said. When donors showed up with a wad of bills, the money was never counted in front of them "because that would have been tactless. What donors really wanted was to be seen."

The man who handled the party's finances in one capacity or another for two decades also talked about transactions that nobody had heard of until now. One was an alleged cash payment in 1993 to Severo Moto, the main opposition figure in Equatorial Guinea, "to help with his campaign run." Another was a call the PP received from Alberto Recarte, CEO of the online right-wing newspaper Libertad Digital, asking for help raising new capital. "Lapuerta made certain people in the party subscribe for shares bought with party money."

Bárcenas also mentioned payments to Elvira Rodríguez, the PP's environment minister between 2003 and 2004 and now president of the market watchdog Comisión Nacional del Mercado de Valores, and to Ana Palacio, foreign minister between 2002 and 2004, who has denied accepting any money.

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