Catalonia’s ‘3% case’ brings political and business leaders close to trial

A court in Spain has completed a years-long investigation into alleged illegal party financing by Democratic Convergence of Catalonia (CDC), a party that governed the northeastern region for decades as part of the Convergence and Union (CiU) coalition. Spain’s High Court, Audiencia Nacional, has found evidence of rigged contract awards that brought the regional government into “serious disrepute” and caused “millions of euros in damage to the public coffers.”

Although the precise extent of the financial damage is not specified, the investigation shows that between 2009 and 2015, individuals working in the regional administration and in local governments controlled by CDC awarded 31 public works contracts worth €227 million in an irregular manner.

A total of 32 individuals, including ex-public officials, businesspeople and four former CDC officials, are close to standing trial for corruption crimes such as embezzlement of public funds and influence peddling. One individual, former party treasurer Daniel Osàcar, was already convicted in an earlier trial involving illegal party financing known as the Palau case.

Another leading suspect is Germà Gordó, who served as secretary in the first administration of Catalan premier Artur Mas in 2010. The latter tasked Gordó with “supervising and coordinating” public works in Catalonia. Mas himself has not been named a suspect, although judicial sources said that the former regional leader is “exposed” because one or more of the people now facing trial could decide to make revelations in exchange for a more lenient sentence. Some entrepreneurs have already confessed to paying commissions.

The Catalan Republican Left (ERC) has been pressuring for the Catalan government – of which it is a partner – to join the criminal proceedings against the alleged corrupt network. Catalan premier Quim Torra, of Together for Catalonia (JxCat) has not ruled out this option but said that the executive will only do so if “economic damage” is detected.

“A problem called 3%”

The system was known informally for years as “the 3% network,” a reference to the percentage of the contract that was presumably paid in bribes by companies. The term was first mentioned in public in 2005, when then-Catalan premier Pasqual Maragall, of the Catalan Socialist Party, said inside the regional parliament that CiU had “a problem called 3%.”

The current inquiry builds on an earlier investigation that began in 2005 but was later shelved, then reopened again in 2015. In a related case that went to trial and caused a public scandal, in 2017 the Provincial Court of Barcelona ruled that CDC used Palau de la Música, a landmark concert hall in the Catalan capital, as a cover to channel opaque corporate donations. The construction giant Ferrovial was found to have paid €6.6 million to CDC in exchange for public works contracts.

The contract awards under investigation involve dozens of local and regional institutions and span a period between 2009 and 2015. This coincides with a period of political success for CDC, which was returned to power in 2010 following a seven-year parenthesis.

The contract awards under investigation involve dozens of local and regional institutions

At that point, CDC also recovered control over the agencies that award public contracts, particularly the giant Infraestructures.cat. Both of its leaders during the period under investigation, Josep Antoni Rosell and Joan Lluís Quer, are now facing trial. So is Antoni Vives, a former Barcelona councilor who headed Bimsa, the local equivalent of Infraestructures.cat.

The public works under investigation include the reform of Les Glòries square in the Catalan capital (worth €65 million), the access roads to the southern enlargement of the Port of Barcelona (€10 million), the new high-speed AVE train station in Girona, a health center in Mataró, road projects and public building reforms.

According to the investigation, CDC officials “sold their influence” over the award process to companies wishing to win the bid. The companies made donations to foundations with ties to the party. CDC treasurers then allegedly pressured mayors and agency chiefs.

The judge has found 31 contracts that were allegedly awarded not to the best or most economical bidders, but to the ones who paid, by creating bidding rules that favored technical aspects that were easier to manipulate. Sometimes the corporate payments coincided in time with the awards, others it was more of a way to maintain “a privileged relationship” with party officials who had the power to influence the process.

In 2015 an internal crisis over the independence drive fractured the CiU coalition, and in July 2016, amid party financing scandals, CDC was refounded as the Catalan European Democratic Party (PdeCAT), although CDC retained legal personality.

English version by Susana Urra.