Corruption ringleader admits paying bribes, passing funds to Popular Party

Businessman at center of Gürtel probe, Francisco Correa, gives details of how his companies operated

Francisco Correa at the High Court.
Francisco Correa at the High Court.J. C. H. (EFE)

The key figure in Spain’s most infamous case of party-related corruption has admitted to paying kickbacks in order to be granted government contracts, and to handing some of the money his companies earned through the shady deals to Spain’s conservative Popular Party (PP).

In a highly anticipated appearance at Madrid’s High Court, which was televised live on Spanish television, businessman Francisco Correa said he kept part of the money he was paid in bribes for himself and gave a portion to Luis Bárcenas, treasurer for the PP from 2008 to 2009.

Correa faces 125 years and one month in jail for charges including money laundering, tax fraud and bribery

“I spent more time in Genova [the PP headquarters] than in my own office,” he said during court proceedings on Thursday in the so-called Gürtel case, Gürtel being a rough translation into German of correa, meaning “belt.”

Correa, who allegedly liked to be known as “Don Vito” after the character played by Marlon Brando in The Godfather, also admitted to giving gifts to Jesús Sepúlveda, the former PP mayor of Madrid suburb Pozuelo and husband of former Health Minister Ana Mato.

Correa and his associates are thought to have hidden evidence of their existence via a web of shell companies and bank accounts in offshore tax havens. But on Thursday Correa worked hard to separate his business activities from his personal involvement in the kickbacks-for-contracts scheme.

He told the court all his companies had operated legally and he had never used offshore subsidiaries in an attempt to evade taxes in Spain. “I didn’t realize I was committing any crimes. I am paying and I apologize publicly to the court and to the ministry,” said Correa, who appeared to place little importance on the tax-fraud charges he faces.

The statements from Correa – who deflected blame away from most of his subordinates – come on the fifth day of a trial during which 37 people will give testimony related to a sprawling corruption case involving six regional governments and nearly 200 official suspects.

The scandal has already cost the jobs of dozens of PP mayors, regional deputies and councilors, as well as a senator and a member of Congress.

I spent more time in the PP headquarters than in my own office

Francisco Correa

The case is so complicated that it has been broken down into sections by investigators, with the current trial tackling illegal financial activities from 1999 to 2005.

Correa, who was held in prison from 2009 to 2012 before being released on bail, faces 125 years and one month in jail for charges including money laundering, tax fraud and bribery. Before his court appearance this week, he promised to cooperate with authorities, which was taken as meaning he would admit to some of the accusations leveled at him by prosecutors.

Former PP treasurer Luis Bárcenas, also a key figure in the case, was quick to deny the accusations of Correa, telling journalists on Thursday he had never taken money from him.

Set to appear in court this week, the one-time treasurer’s testimony is expected to include details of a parallel accounting system he allegedly operated on behalf of the PP, a slush fund he claims to have used to make illegal under-the-table payments. Anti-corruption investigators allege Bárcenas appropriated €299,650 from the party slush fund, as well as handing out cash payments to high-profile Spanish politicians, including acting Prime Minister Mariano Rajoy.

The case is seen as a major threat to the PP, with prosecutors saying the party benefited from funds derived from bribery and embezzlement.

But prosecutor Concepción Sabadell has ruled out calling in Prime Minister Mariano Rajoy as a witness after calls that she do so from the private prosecutions in representation of the Socialist Party (PSOE) and the Association of Democratic Lawyers for Europe.

Last week, the PP argued that the alleged profit of €250,000 it made from illegally obtained funds should be attributed exclusively to the party’s municipal groups in Pozuelo de Alarcón and Majadahonda, two wealthy suburbs of Madrid.

The Gürtel investigation began in the summer of 2008 after a former PP councilor, José Luis Peñas, filed a complaint with the anti-corruption attorney. For a year, Peñas had been recording conversations with Francisco Correa, in which the latter detailed his own corrupt business dealings and his ties to PP leaders.

For months, former High Court Judge Baltasar Garzón conducted a secret investigation into the allegations and ultimately ordered three ringleaders arrested in February 2009. He also obtained extensive documentary evidence of parallel accounts kept at Correa’s companies showing the payment of illegal commissions to PP politicians. However, he was thrown off the court bench and barred from serving as a judge in 2012 after being found to have breached his duties and violated the constitutional rights of several corruption defendants by ordering phone taps of their jailhouse conversations in 2009.

English version by George Mills.

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