Corruption in Spain

Púnica corruption investigation extended to 12 city governments

Madrid and Valencia among municipalities under scrutiny as judge widens bid-rigging probe

Francisco Granados abandona su domicilio, tras ser detenido en octubre de 2014.
Francisco Granados abandona su domicilio, tras ser detenido en octubre de 2014.cLAUDIO ÁLVAREZ

The judge overseeing the Púnica inquiry, a nationwide corruption probe underway since October 2014, has opened a new line of investigation and is looking into 12 city halls, among them Valencia and Madrid, to establish their involvement in a bid-rigging scheme that awarded at least €250 million in public contracts.

Authorities want to know more about contracts that a businessman named Alejandro de Pedro, who is already an official target of the investigation, was awarded by the 12 city halls – all run by the Popular Party at the time of the allegations – through the companies Madiva and Eico.

Authorities want to know more about contracts that businessman Alejandro de Pedro was awarded by the 12 city halls

Civil Guard investigators have accused De Pedro of receiving money from these city halls in return for placing institutional advertising in a string of online publications he owned in Madrid and Valencia. “In reality,” says a Civil Guard report passed to the judge overseeing the case, “[the advertisements in De Pedro’s digital publications] were payment for work carried out to improve the profile of authorities and public officials.”

The 12 local governments involved – six of them in the Madrid region (Madrid, Valdemoro, Majadahonda, Alcobendas, Collado Villalba and Coslada), five in Valencia (Valencia, Castellón, Dénia, Gandia, Elche) and one in Murcia (Cartagena) – hired De Pedro for a range of services that included work to give favorable media coverage to elected officials, according to the investigators’ thesis.

Ninety-two people have now been targeted as part of Operation Púnica, at the center of which are former senior Madrid regional government official Francisco Granados and his friend, businessman David Marjaliza. Both men have been in preventive prison since October 2014.

More information
Púnica ringleaders hid €11 million in Switzerland and Singapore
Growing graft probe hampers PP’s bid for power in key Madrid region
Suspected Púnica ringleader laundered €4.4m via phony invoices

A report drawn up by the Spanish Tax Agency and sent to state prosecutors claims that Marjaliza’s numerous businesses received invoices from at least nine companies for services that never existed.

The report is part of the investigation headed by High Court Judge Eloy Velasco, who has lifted the seal on the case.

The origin of the Púnica case – the name is a reference to Granados, which means pomegranate tree in English, or Punica granatum in its Latin scientific name – is a tax investigation into Marjaliza and Granados’ Swiss bank accounts, whose existence came to light in December 2013.

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