Ex-treasurer’s revelations rattle Spain’s Popular Party ahead of illegal funding trial

New revelations from the former treasurer of Spain’s Popular Party (PP), Luis Bárcenas, who is serving a 29-year sentence over a sweeping graft case known as Gürtel, could affect the outcome of a new trial probing an illegal funding system run by the conservative group.

In February 2013, EL PAÍS revealed the existence of secret handwritten ledgers that became known as the “Bárcenas papers.” These accounts showed cash donations and outgoing payments from 1990 to 2008 that suggested irregular payments and salaries within the PP. The parallel accounting appeared to reflect unlawful corporate donations as well as regular kickbacks to senior party officials. None of this money was declared to the tax authorities.

Now, with less than a week to go before the start of a trial over the PP’s alleged illegal funding – in which Bárcenas is the main accused party and faces a five-year sentence – the former treasurer has sent prosecutors a letter expressing his “desire to cooperate with the justice system.” José María Aznar and Mariano Rajoy, two former prime ministers who served at the time when the PP was allegedly running this parallel accounting system, will appear in court as witnesses.

Donations for contracts

In the letter, to which EL PAÍS has had access, Bárcenas suggests that several public contracts may have been awarded to companies in exchange for corporate donations under Aznar, who was in office between 1996 and 2004.

Judge Santiago Pedraz of Spain’s High Court, the Audiencia Nacional, is investigating 23 contracts worth a combined €600 million awarded by five ministries under the Aznar administration between 2000 and 2004. Many contracts went to a building company named Constructora Hispánica, whose owner, Alfonso García Pozuelo, was a major party donor who made nine contributions in different years.

For the last seven years, while the pre-trial investigation was underway, Bárcenas had denied that the €8 million in corporate donations reflected in the parallel accounts were tied to contract awards. But in his letter to prosecutors, the disgraced bookkeeper says that he kept quiet all these years because he’d been promised that his wife, Rosalía Iglesias, would not be sent to prison.

“I’d already said in my statement to the judge of July 15, 2013 that I had been pressured into keeping quiet and not incriminating or staining my party’s good name, due to the risk of my wife potentially going to prison,” he notes. Rosalía Iglesias was ultimately convicted at the Gürtel trial of 2018 and she began serving a 13-year sentence in November of last year.

Shredded documents

In his written confession to corruption prosecutors, Bárcenas also says that in 2009 he showed documents proving the PP’s illegal financing to then-prime minister Mariano Rajoy, and that the latter put the papers in a shredder, unaware that Bárcenas had made copies, “many of which were stolen from my wife’s studio when it was broken into.” According to Bárcenas, Rajoy was “perfectly aware” of the existence of this parallel accounting system.

“Since 1982 there was an institutionalized system of financing with unofficial revenue obtained through donations,” reads the letter. Some of those donations were made “by people with ties to companies that benefited from major public contract awards. The donations were made in cash directly to [Bárcenas’ predecessor, the deceased former treasurer] Álvaro Lapuerta, and I was present in some cases.” Bárcenas says that the vast majority of donations were not made with the goal of securing contracts, but that there were “a few specific cases where that was the driving motivation.”

Cash-filled envelopes

Bárcenas goes on to name specific individuals whom he says regularly received cash-filled envelopes as bonuses that came out of this secret fund: Rajoy himself, former party secretary general María Dolores de Cospedal, former Defense Minister Federico Trillo, former Senate speaker Pío García-Escudero, former Deputy Prime Minister Francisco Álvarez-Cascos, former Interior and Justice Minister Ángel Acebes, former Deputy Prime Minister Javier Arenas, and former Deputy Prime Minister and ex-International Monetary Fund chief Rodrigo Rato – who was tried in a separate case involving wrongdoing at the helm of the bailed-out bank Bankia.

According to Bárcenas, there is a recorded conversation currently in the power of an unnamed individual, discussing “these cash payments made monthly to these members of the PP, among which Mariano Rajoy was expressly mentioned.”

Catalan campaign

The revelations come in the middle of an election campaign in Catalonia, where the PP is fighting to ensure it is not overtaken at the polls by the far-right Vox. Senior PP officials are dismissing the statements as relating to a case “that is part of the past, that we have forgotten and learned from,” in the words of PP senator Javier Maroto. While Bárcenas’ letter to prosecutors does not incriminate any current party leader, it could erode the PP’s image at a delicate time. But Bárcenas claims it is a result of soul-searching.

“I’ve been deprived of my freedom for nearly four-and-a-half years, and this situation makes one think about the mistakes I may have made in life, about the damage that I may have inflicted on society as a result of [living in] a Spain where the general feeling was that ‘anything goes’,” writes Bárcenas in his letter. “I am aware of these mistakes and of the pain I have inflicted on my wife and son. They do not deserve this suffering. All of these circumstances have led me to present this written document and offer to cooperate with the justice system.”

Gürtel connection

The current investigation grew out of the earlier Gürtel scandal, a sweeping graft case affecting scores of local and regional PP officials who awarded no-bid contracts to a business conglomerate 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. One of the convicted individuals was Bárcenas, who was also found to have a fortune hidden away in foreign bank accounts.

Supreme Court justices also backed the High Court’s decision declaring the PP’s civil liability in connection with the case, and telling it to return €245,000 obtained through unlawful channels. But they found that the lower court’s wording had made it seem like the existence of the parallel accounting was a proven fact, when this was not on trial in 2018.

The May 2018 ruling triggered a political earthquake in Spain and ended Rajoy’s career. Pedro Sánchez of the Socialist Party (PSOE) led a successful no-confidence motion with support from Unidas Podemos and various small regional parties, and was sworn into office on June 2 of that year.

English version by Susana Urra.