Former Popular Party (PP) treasurer Luis Bárcenas has provided an investigating judge with new details about illegal party financing that is alleged to have gone on for more than 20 years.
In his latest testimony before High Court Judge Pablo Ruz on April 10, Bárcenas claimed that every regional and provincial party seat ran their own parallel accounting system, reflecting unlawful donations and outgoing cash gifts to party leaders.
This system appears to mirror the secret ledgers that Bárcenas claims to have kept at the national level, which are the target of a criminal investigation.
This central slush fund, records of which were partly published by EL PAÍS in January 2013, suggest hefty donations by many of Spain’s construction companies, some of which were barred from gift-giving because they were government contractors. Bárcenas has also said that part of this money was used to fund renovation work at party headquarters in Madrid, and to pay informal cash bonuses to PP leaders, including Prime Minister Mariano Rajoy.
The PP rescued Libertad Digital
In his most recent court appearance, Luis Bárcenas explained to the judge how the PP participated in the capital expansion launched by conservative online newspaper Libertad Digital, whose one-time chief was Alberto Recarte, whom the PP made a member of the board of savings bank Caja Madrid.
“[Former treasurer] Álvaro Lapuerta told me that [former minister Ángel] Acebes had tasked him with finding business people ready to lend a hand by buying shares in Libertad Digital. Lapuerta got in touch with his regular network of entrepreneurs and some money began to flow in, but there came a point when the capital expansion was about to end, even though financial expectations had not been met. Álvaro Lapuerta spoke with the secretary general and suggested the possibility of using funds from the secret accounts to buy equity in Libertad Digital. And then Álvaro Lapuerta told me we had to find trusted individuals so the stakes could be placed in their names, even if the shares would be bought with party money.”
Bárcenas, who is himself being investigated for tax fraud, money laundering and other crimes, has been gradually leaking information about his former party’s inside operations since 2009, when the Gürtel kickbacks-for-contracts scandal broke and he fell from political grace. He has been in preventive custody since June 27, as the judge determined he was a high flight risk.
In his 12th court appearance, Bárcenas said that while national headquarters was aware of the provincial branches’ parallel accounts, no orders or guidelines were issued from Madrid, where leaders chose not to get involved.
“They didn’t even supervise?” the prosecutor asked.
“We neither supervised nor wanted to know anything about it,” he replied.
Bárcenas denied claims by high-ranking PP officials that responsibility over party finances fell exclusively to treasurers and party managers. “That is not true, they were aware of it,” he said. “The treasurer does not manage – that is, he does not talk to donors to secure money for the party, nor does he hand out cash-filled envelopes, which I recorded, without knowledge by his superiors. And in this case the superior is the secretary general.”
The disgraced treasurer also said the PP had operated these parallel accounts since 1989; that former minister Francisco Álvarez-Cascos gave him the key to the secret cash box; and that part of the renovation work on central headquarters was paid with cash from the fund. In exchange for the tax-free payment, the architect Gonzalo Urquijo gave the party a 10-percent discount on the final price.
In further revelations, Bárcenas said that several dress suits for party leader Rajoy were paid for in cash from this fund, although the PP leader was apparently unaware of this. “Álvaro Lapuerta [Bárcenas’ predecessor as PP treasurer] decided that it was better to pay for the suits with that money so the official party accounts would not show a tailor’s bill. So the bills were paid and the receipts shredded.”