A High Court judge on Friday sent Francisco Granados, a former senior official with the Madrid regional government, to prison on preliminary charges of money laundering, criminal association, influence peddling, bribery, misappropiation of funds, abuse of power and fraud.
Granados and his business partner David Marjaliza, a constructor and childhood friend of the former official, are considered the masterminds behind a bid-rigging scheme alleged to have been organized throughout Madrid, Valencia, Murcia and León.
Around 51 people were named as official suspects on Monday, with 30 or so arrested as part of Operation Púnica, a raid against the corrupt ring. Besides Granados and Margaliza, police arrested several Madrid region mayors and the head of the provincial authority of León, as well as various businesspeople and civil servants.
The Púnica ring is believed to have unlawfully awarded as much as €250 million in public contracts, whose beneficiaries had been predetermined by the ringleaders.
We’re doing all the ground work for Podemos”
Esperanza Aguirre, ex Madrid premier
In his writ confirming custody for Granados, Judge Eloy Velasco says that the ring made crime “a way of life” through the irregular awarding of contracts in exchange for commissions. One of the biggest corporate beneficiaries of the bid-rigging was the energy-efficiency firm Cofely, a unit of the French giant EDF Suez.
The genesis for Operation Púnica was the discovery of Swiss bank accounts held by Granados and Margaliza, who often conducted simultaneous transactions with them. Swiss authorities informed Spain about indications of “aggravated money laundering operations.” Both men held a joint €5.8 million in Switzerland at one point.
Regarding Marjaliza, the investigating judge writes that he is “at the center of a wide influence-peddling ring” and “head of a large business network that represents the core of the criminal organization.”
The fact that Púnica’s alleged mastermind, Granados, belongs to the Popular Party (PP) and held positions of responsibility within the Madrid branch poses a new headache for Spain’s ruling party.
The corrupt ring made crime “a way of life,” says the investigating judge
Púnica is just the latest in a series of corruption scandals affecting primarily the PP. It began with Gürtel, an even larger bribes-for-contracts scheme that continues to be investigated in the courts more than five years after it broke. It continued with the “Bárcenas papers,” revelations that the PP kept secret accounts allegedly reflecting illegal party financing and cash bonuses to top party officials.
More recently, the Caja Madrid credit card scandal brought down Rodrigo Rato, a former minister and ex-chief of the International Monetary Fund who served as the savings bank’s director when the expense abuse was taking place.
Several PP leaders said privately that the party and the government feel stuck in a hole and that there seems to be no way out, even as elections loom next year.
“We’re doing all the ground work for Podemos,” commented Esperanza Aguirre, a former premier of Madrid who personally appointed Granados to positions of responsibility, and whose head is being demanded by various party leaders as a way to purge the PP of figures tied to corruption.
Aguirre’s words were a reference to Podemos, the new Spanish political force to emerge from the European elections of May 25. Its leader, Pablo Iglesias, is promising to sweep Spain’s corrupt political “caste” off the map in next year’s elections.
But so far Prime Minister Mariano Rajoy seems disinclined to push Aguirre out of the picture, especially since she might be running for Madrid mayor next year.
“Esperanza Aguirre made a mistake, like myself and all those who are here today,” said Rajoy, who apologized earlier this week to Spaniards “for having given positions of responsibility to individuals who were not fit for it.”