Judge orders all former IMF chief Rato’s accounts to be blocked

Rodrigo Rato, a former International Monetary Fund (IMF) chief and senior government official who was briefly arrested on Thursday in connection with a financial crimes investigation, told EL PAÍS that he owns no companies in tax havens or in any country outside the European Union.

The Tax Agency is investigating Rato, once a top official with the ruling Popular Party (PP), for tax fraud, asset stripping and money laundering.

Rato refuted claims that he may have diverted funds to companies in the Virgin Islands

On Friday a Madrid judge took the significant step of blocking all bank accounts and financial products registered in Rato’s name, giving banking and financial firms a deadline of three days to report his financial position, according to industry sources.  

The move follows the searching of his Madrid house and office on Thursday afternoon for documentary evidence of wrongdoing in an operation that attracted significant media attention.

Rato also refuted the claim that he may have diverted funds to companies in the Virgin Islands.

“I have nothing there; my only relationship with this tax haven is that I work with a British lawyer who keeps an office there, but with this law firm I only have an office in Britain. Not in any Channel island, or in any other country, but within the United Kingdom itself,” he told EL PAÍS, adding that he has neither bought nor sold assets in the last 13 months.

Yet a day after the search, Tax Agency agents returned to his office looking for computer files to add to the investigation.

Rato, who headed the IMF between 2004 and 2007 and served as a senior official in the conservative government of José María Aznar in the late 1990s and early 2000s, was brought back to his office during the search, although he was not arrested a second time.

On Thursday afternoon, Rato was kept under arrest for seven hours while his home and office were inspected, then released. The search was requested by the Madrid Attorney’s Office after it received reports from the Tax Agency’s Sepblac money-laundering department alerting it of suspicious financial movements by Rato, who has traveled to Switzerland at least three times in the last six months.

The PP, which Rato was a leading member of for 34 years, has been seeking to distance itself from what looks like yet another case of wrongdoing affecting a party that is already struggling under the Gürtel, Púnica and other high-profile corruption cases.

On Friday, Deputy Prime Minister Soraya Sáenz de Santamaría stressed that the Rato investigation was “a private matter” that bears no relation to his work as a former economy minister and deputy prime minister.

The Tax Agency “works regardless of time and place, of whether there are elections or not, or whether it affects a politician from this or that party,” she said.

But the Anticorruption Attorney’s Office is already claiming the case for itself. According to official sources, on Friday the office filed a request with the Attorney General, Consuelo Madrigal, to have the case transferred from the Madrid Attorney’s Office. A decision is expected on Monday, the same sources said.

Treasury Minister Cristóbal Montoro said the probe into Rato’s affairs was the result of “an investigation that has been going on for quite some time,” and was not related to the 2012 tax amnesty he applied for. “The Tax Agency acts in a completely independent manner, and we should all celebrate that.”

If the PP does not place obstacles in the way of having an icon like Rato go through what he has gone through, then it should get some credit”

PP official Esteban González Pons

Montoro also denied knowing the names of the 705 individuals being investigated for money laundering after regularizing their tax situation in 2012. Rato is allegedly one of these people.

Meanwhile, Esteban González Pons, a PP veteran who is currently its secretary of studies and programs, said he believed the party should be congratulated for its handling of the case. “If a party like the PP does not place obstacles in the way of having an icon like Rodrigo Rato go through what he has gone through, then [that party] should get some credit,” The Huffington Post reported him as saying.

His statement quickly became a trending topic on Twitter.