Calls for Montilla to resign over banking scandal

17th November 2005, Comments 0 comments

17 November 2005, MADRID — Spanish industry minister Jose Montilla faced calls to resign over his role in a political funding scandal.

17 November 2005

MADRID — Spanish industry minister Jose Montilla faced calls to resign over his role in a political funding scandal.

La Caixa, Spain's largest savings bank, let the Socialist Party of Catalonia off almost EUR 7 million in interest payments without explaining why, the Financial Times reported.

The Tribunal of Accounts, which audits political party finances, said the debt forgiveness came at the same time as the Socialist victory in the general election last year and the appointment of Montilla as industry minister.

Montilla, who is secretary general of the Catalan Socialists, later supported a bid by Gas Natural, a gas importer which is controlled by La Caixa, to launch a EUR 22.5 billion hostile takeover bid for Endesa, Spain's largest electricity company.

The newspaper reported La Caixa refused to comment on the scandal but sources inside the company said the affair has proved highly embarrassing.

The conservative opposition Popular Party (PP) has called for Montilla to resign.

Mariano Rajoy, party leader, said: "Montilla should resign because a civilised country cannot be projecting this kind of image to the rest of the world."

Montilla has refused to resign as he claims he was not directly involved in the party's negotiations with La Caixa.  

The Spanish daily El Mundo reported another Catalan party, the nationalist ERC, was told it did not need to pay back EUR 2.7 million of debt by La Caixa.

The Tribunal also reported EUR 38 million of overdue debts owed by eight political parties in 2002, the last time accounts were scrutinised.

The PP was not among them but had the largest anonymous donation of EUR 7.7m.

In Spanish law, anonymous donations up to 5 percent of official grants to political organisations are permitted.

The tribunal also reported a series of irregularities, sloppy accounting, suspicious revenue streams which could mask bribes and incomplete records of relations between parties and their banks.

[Copyright EFE with Expatica]

Subject: Spanish news

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