Making sense of the Gürtel investigation
The judge handling the huge corruption case involving the ruling PP is struggling to close his inquiry The biggest pre-trial probe undertaken by the criminal court, it involves 200 suspects in six regions From Bárcenas' ledgers to refurbishments at PP HQ, EL PAÍS takes you through its multiple strands
After an investigation that has lasted over five years, High Court Judge Pablo Ruz finds himself mired in the labyrinthine Gürtel case, a massive bribes-for-contracts scheme involving six regional governments and nearly 200 official suspects. It is the largest pre-trial probe in the history of Spain’s central criminal court, and will very likely soon be broken up into smaller, easier-to-handle sections.
Francisco Correa, the mastermind behind the Gürtel network, is alleged to have cultivated personal relationships with Popular Party (PP) officials and offered them gifts in exchange for hefty public contracts for his companies. The ongoing investigation into the corruption scheme has already affected dozens of PP officials at the local, regional and national levels.
Many of the worst abuses took place in the Madrid and Valencia regions, according to the investigation. Documents seized from a suspect show that the ring handled as much as €25 million.
Besides the bribery, the Gürtel probe uncovered the existence of secret ledgers kept by the PP’s former treasurer, Luis Bárcenas, which suggest there had also been illegal party donations and under-the-table cash payments to party officials.
The Valencia connection
The operation that Gürtel deployed in Madrid between 2004 and 2008 extended to the Valencia region during those same years. In this case, there was one company that conducted most of the dubious dealings with local and regional authorities: Orange Market. The fact that several deputies – who enjoy immunity from the regular courts – are involved in this part of the investigation meant that part of the case was transferred to the Valencia regional High Court, which is overseeing six separate sections of the case.
» Illegal party financing. Investigators have shown that several businesspeople covered part of the debt that the PP owed Gürtel for organizing several events during the 2007 campaign.
» Electoral crime. Illegal financing during the 2008 campaign could mean that the PP committed an electoral crime.
» Fitur. Between 2005 and 2009, Gürtel won the bids to set up the Valencia pavilions at Fitur, a major tourism trade fair. The ring pocketed €5 million through highly irregular contracts. Thirteen people will be put in the dock to answer charges of influence peddling and accepting gifts from Francisco Correa's people.
» The pope's visit. Valencia's regional public television network awarded a Gürtel company the broadcasting rights to Pope Benedict XVI's visit in 2006. The ring made over €3 million in profit.
» Contracts. Between 2004 and 2009, several departments of the Valencia government arbitrarily handed out contracts benefiting Gürtel firms.
» Tax crimes. The Gürtel branch in Valencia, Orange Market, failed to declare some of the profits it obtained from its business dealings with the PP.
Ruz is overseeing the large part of the investigation, including the strands involving the central branch of the Popular Party (PP), the heads of the corruption network, their illegal business in the Madrid region, money laundering and tax fraud.
But he is also in charge of smaller corruption cases relating to Gürtel in Toledo, Jerez, Pontevedra and La Rioja. The first two cities are on Ruz’s list because of the business dealings that local authorities had with Correa – the surname means “belt” in Spanish, as does Gürtel in German, hence the code name for the police operation. The latter two are under investigation in relation to the use of money from illegal party donations to the PP.
For now, only the part of the case affecting the Valencia region has been broken off into a separate investigation, because of its sheer scope (see sidebar, left).
Ruz is trying to bring the investigation to an end, but every time he requests new information about financial transactions abroad made by some of the targets of the probe, new questions arise regarding the origin of the money.
» Aena. The airport authority is the only state agency affected by Gürtel. The investigation has confirmed that two of its executives received commissions and gifts after awarding contracts to the corrupt business network.
» Madrid region. The State Comptroller detected cost overruns, tender fixing, over 100 invoices for unjustified services and other irregularities in connection with 686 events that Gürtel organized in the region. The network made an alleged €6.5 million as a result. The former sports commissioner, Alberto López Viejo, now a target of the investigation, was Gürtel’s main contact.
» Arganda. One of the ring’s greatest quick-buck operations took place in the town of Arganda, in the Madrid region, where the sale of a plot of land resulted in illegal commissions. Mayor Ginés López and one of his councilors, Benjamín Martín Vasco, received payment for their mediation work in €500 notes, according to the police investigation.
» Boadilla del Monte. Just one of the commissions involving business dealings in the Madrid satellite town of Boadilla is worth €1.8 million, which the police believe “can only involve a very significant business volume.”
» Majadahonda. El permutazo (loosely translated as The great swap) was the name given to one of the real estate schemes in which local authorities and Gürtel cooperated. It essentially meant taking land meant for subsidized housing and switching its status to allow market-price homes to go up there instead. At the height of the property boom, the sale price could be up to five times higher that way. Officials who helped the ring get a piece of the pie received trips, suits, watches, season tickets for soccer and tennis matches, and hard cash. One of these officials was the mayor, Guillermo Ortega.
» Bárcenas and his papers. EL PAÍS’s publication of the secret handwritten ledgers kept by former PP treasurer Luis Bárcenas opened up new avenues of investigation. The veracity of many of the listed items has been confirmed, seemingly supporting the existence of illegal party financing between 1990 and 2008. The PP may also have committed a crime by failing to pay taxes on the illegal donations. The alleged donors deny having paid the amounts noted in Bárcenas’ accounts, and some of the individuals who are listed as having received extra cash payments reject the claim.
» Swiss accounts. The probe into the origin and destination of money transfers by some of the people under scrutiny has led to endless requests for information from foreign sources. Ruz has asked Switzerland as many as 33 times for documents certifying the use of accounts there for money-laundering purposes.
» Álvaro Lapuerta. Bárcenas’ predecessor as party treasurer stamped his signature on these secret ledgers. An expert has certified that it is indeed his handwriting, but Lapuerta’s delicate state of health has kept him from testifying before the judge.
» Sanchis family. Former treasurer Ángel Sanchis and his son are being investigated for allegedly concealing €3 million that Bárcenas transferred from Switzerland to HSBC bank in New York in early 2009.
» Rebollo. Armando Mayo Rebollo is a partner in various investments made by several Gürtel suspects. An investigation into the destination of a €100,000 transfer from one of his Swiss accounts has revealed the existence of another account in which transactions of over €460 million were recorded between 2006 and 2010. The holders of the account have yet to be identified.
» Refurbishing PP headquarters. Party accounts and documents seized from the office of Gonzalo Urquijo, the architect who refurbished the PP’s headquarters on Génova street in Madrid, suggest that part of the project was paid for with undeclared money.
» Pontevedra. The corrupt network handled the seizure of €160,000 as a result of debt allegedly owed by the local PP branch, but which Galician party leaders did not acknowledge. The amount came out of the national party’s coffers.
» La Rioja. The PP allegedly laundered €200,000 contributed by La Rioja to purchase new headquarters.
» Toledo. The Castilla-La Mancha branch of the PP received €200,000 from Bárcenas for its 2007 campaign run. This amount does not show up in the official party accounts, and the former treasurer says it was a commission paid by the winner of a bid to contract out Toledo’s cleaning services.
» Jerez. The police has found irregularities in three contracts that were awarded by the city to Gürtel businesses. The local mayor is involved.