Madrid premier’s wife named in tax-fraud and money-laundering case

The premier of the Madrid region, Ignacio González, on Wednesday defended his own innocence and that of his wife, Lourdes Cavero, after a judge named her as an official suspect in an investigation into possible money laundering and tax fraud in connection with a luxury penthouse the couple owns in the area of Estepona, on the Costa de Sol.

The couple had been renting the 500-square-meter property in question since 2008 for 2,000 euros a month but bought it at the end of last year for 770,000 euros. Similar properties in the upmarket Alhambra del Golf residential area are being let for 6,000 euros a month.

The apartment was purchased for a million euros in 2008 by a trustee named Rudy Valner, a Mexican businessman, on behalf of a company called Coast Investor LLC, which is registered in Delaware, a US state that is attractive to businesses thanks to its low tax rates.

The title deeds of the property, which has a solarium, its own swimming pool and a Jacuzzi, indicate that 80 percent of it is owned by Cavero and 20 percent by González. Sources close to the couple said Cavero paid for the property using a severance payment of 700,000 euros she received from Unesa, the association that groups together Spain’s electricity companies, after 26 years of service. González’s gross salary as premier is 103,000 euros a year.

Judge Marian Peregrina in Estepona also implicated Valner in the case, which she passed on to the High Court in Madrid since González has parliamentary immunity as an elected official. Only the High Court can decide to lift a politician’s parliamentary immunity. The judge also handed the case over to the High Court since the alleged offenses were carried out outside of Spain.

Peregrina asked for an investigation into Coast Investors for the possible “fraudulent purchase of the property in Spain through a trust company.”

The case was opened following a complaint filed by the SUP police union in October 2012. At the start of this year, Peregrina accepted a 141-page report on the ownership of the apartment carried out by the anti-corruption prosecutor's office.

González’s expressed his “astonishment” at the judge’s ruling, which he said was “riddled with assumptions.”

“Over the course of more than a year no crime or criminal responsibility has been established because there is none,” González said on Wednesday. “A situation of insecurity and defenselessness has been created. When someone is named as a suspect you have to specify the reasons for doing so.”

“If there is evidence of some action against the law, then it should be put on the table as soon as possible, and if there isn’t the case should be shelved,” said the premier.

González, of the ruling conservative Popular Party, said he had already explained to the media the circumstances behind the couple’s purchase of the property. “More than a year ago I appeared before you and told you where this property came from, and all the rental payments we made, and last year I showed you the title deeds and the loans involved,” González said. “Given all of this, I am very surprised by the ruling.”

In response, the chairman of the Madrid branch of the main opposition Socialist Party, Tomás Gómez, called on González to resign. “Mr Ignacio González knows that there is more, a lot more than what we know to date and that disqualifies him from continuing to be the premier of the region of Madrid,” Gómez said. He should leave his position as head of the government, and if he doesn’t do so [Prime Minister Mariano] Rajoy needs to ask him to.”

González took over as premier in September 2012 after Esperanza Aguirre unexpectedly stepped down. Since then he has faced a barrage of protest and strikes against healthcare cuts and the government’s decision to privatize hospitals in the region. Last week, US casino tycoon Sheldon Adelson abandoned plans to set up a mega-resort in the region after the Rajoy administration rejected his demands. González had lobbied the central government on Adelson’s behalf to relax, among other things, the anti-smoking ban in public places at the planned gambling resort.

The PP also has been plagued by a series of corruption scandals involving elected officials in the Madrid regional government, among others. Aguirre on Tuesday answered a series of questions from High Court Judge Pablo Ruz, who is heading the investigation into the Gürtel kickbacks-for-contracts scandal.