Spain’s conservative Popular Party (PP) has been dealt a new legal blow in connection with the so-called Bárcenas Papers, a parallel bookkeeping system run for years by former party official Luis Bárcenas and first reported on by EL PAÍS in 2013.
On Thursday, Spain’s High Court, the Audiencia Nacional, found that the main opposition party used more than €1 million in undeclared funds to pay for extensive renovation work to PP headquarters on Madrid’s Génova Street in the late 2000s.
In its ruling, the court handed a two-year prison sentence to Bárcenas for paying €1,072,000 outside official accounting channels to an architecture firm named Unifica, whose owners have also been sentenced to prison and ordered to pay back taxes owed to the Spanish Tax Agency.
Judges also found the PP itself responsible in a subsidiary way for €123,669 in corporate taxes that Unifica should have paid in 2007. “There is no evidence that the PP, through its leadership bodies, adequately controlled the administrative work performed by the administrator Luis Bárcenas at the time of these events,” reads the ruling.
While the penalties are much lower than those seen at other high-profile corruption trials, this case is significant because it is the third ruling that grants credibility to the Bárcenas Papers as documentary proof that the PP ran parallel accounts using undeclared funds from donations. “The money, always in cash and outside all control by the accounting department, was kept in a safe inside Bárcenas’ office,” reads one passage of the 454-page ruling.
Similar assertions were contained in the 2018 High Court ruling on a major corruption case known as Gürtel, and in a related decision by the Supreme Court in 2020.
However, the High Court on Thursday said about the Bárcenas Papers that “it is not possible to validate the entirety of their content” without further proof. Instead, the judges only award credibility “to annotations that match real and accredited facts and events.” These accredited events include cash payments to five PP members who admitted as much at the trial.
Bárcenas, who worked in the PP’s accounting department in various capacities between 1990 and 2009, is already serving time over the Gürtel case, a sweeping kickbacks-for-contracts scheme affecting scores of local and regional PP officials who awarded no-bid contracts to a business network led by a well-connected entrepreneur named Francisco Correa. In October 2020, the Supreme Court confirmed 29 convictions handed down in 2018 against leading members of Gürtel.
In that 2018 ruling, judges also said that there was sufficient evidence to suggest that the PP kept off-book accounts and had “a financing system outside the legal economic circuit” between 1990 and 2008. At the trial that ended Thursday, the High Court backed this view, noting that “during the period when Bárcenas held the posts of chief administrator and treasurer, he handled the cash funds given to the Popular Party political group as private donations through a parallel accounting system (B accounting) whose deposits and withdrawals were not reflected in the official accounts and were therefore not monitored by the Audit Court.”
Former PP chiefs, including the ex-prime ministers Mariano Rajoy and José María Aznar, have always denied the existence of parallel accounts and blamed Bárcenas for any irregularities. But according to the former treasurer, who has been cooperating with authorities, this hard-to-track funding came from donations – including from donors with ties to large companies that received important government contracts. The funds were later used for a variety of purposes such as paying cash bonuses to senior party officials. Bárcenas at one point mentioned Rajoy as one of the beneficiaries.
Part of the money went into the headquarters’ renovation work that was the target of this latest trial. Under new leadership by party president Pablo Casado, who has sought to distance himself from these corruption cases, the PP announced it would be abandoning the building this year, but has not yet done so.
The alleged donations by entrepreneurs in exchange for government contracts described by Bárcenas are currently under investigation in a separate probe that has yet to reach trial.