Popular Party paid for HQ remodeling using €500,000 of unknown origin

Internal audit office says ruling party used €1.5m in off-the-books money to pay for work

Ex-PP treasurer Luis Bárcenas.
Ex-PP treasurer Luis Bárcenas.Uly Martín

The remodeling of the main Madrid headquarters of Spain’s ruling Popular Party was paid for using nearly €500,000 from an unknown source, according to a report sent by the state’s IGAE internal audit office to the judge investigating the secret ledgers kept by the organization’s disgraced former treasurer, Luis Bárcenas.

Between 2006 and 2008 the PP paid €1,584,000 toward refurbishing its headquarters on Genova street, an amount that did not show up on its official accounts, the IGAE concluded.

Of the total, it said that €1,072,000 was paid in cash from the alleged slush fund controlled by Bárcenas and the rest, €480,000, comprised the advance paid to architect Gonzalo Urquijo for the work.

But this latter sum fails to show up in the PP’s official accounts, in those of the architect, or in the secret ledgers that Bárcenas kept detailing the party slush fund.

The report concludes by pointing to a new infraction on top of those already identified

First published by EL PAÍS in January 2013, the ledgers purportedly recorded all cash contributions and donations to the PP that went unreported and also reflect bonus payments to high-ranking PP officials, including Prime Minister Mariano Rajoy and secretary general María Dolores de Cospedal, on top of their regular salaries. Bárcenas has confirmed their authenticity.

The IGAE based its investigation on the official accounts kept by both the PP and architect, as well as the documents they kept hidden from investigating High Court Judge Pablo Ruz, which were discovered during police searches of their offices.

The report states that Gonzalo Urquijo applied to Madrid City Hall for permits to carry out the work using unrealistically low budgets. In addition, it stated that “the examination of the recorded invoices shows the existence of numerous changes to the amounts and items invoiced that were carried out via bills and cancelled invoices that were not recorded; and in some cases the billing was made in different tax years from the delivery of the work, which may have fiscal effects.”

More information
“PP has no reason to fear me,” says former treasurer as he leaves prison
PP and architect’s books to be cross-checked for illegal payments
Police search Popular Party national headquarters in Madrid
Making sense of the Gürtel investigation

The IGAE concludes its report by pointing to a new infraction on top of those already identified: Gonzalo Urquijo paid less than what was owed for the building permits processed by Madrid City Hall. The body recommends that Judge Ruz also investigates these facts.

The IGAE report on the remodeling work at PP headquarters is the final document Ruz has been waiting for to complete his summary of one part of his investigation into the Bárcenas papers. According to the Spanish Tax Agency, this section of the case involves several tax crimes, which are in principle attributable to architect Gonzalo Urquijo.

Bárcenas was released last month on bail after 19 months in preventive prison. He is also facing trial in relation to the far-reaching Gürtel kickbacks-for-contracts case, which involves 170 people, including 60 former PP officials.

Recomendaciones EL PAÍS
Recomendaciones EL PAÍS