Spain ruling party denies illegal financing allegation

31st January 2013, Comments 0 comments

Spain's ruling Popular Party flatly denied wrongdoing Thursday after leading newspaper El Pais published purported secret, hand-written ledgers showing Prime Minister Mariano Rajoy and top party officials received regular payments from a party fund until 2008.

The newspaper ran photographs of the ledgers on its front page, a potentially explosive story at time that Rajoy's government is imposing steep spending cuts and higher taxes on a population suffering a jobless rate of 26 percent.

"Given the information published today by El Pais, the Popular Party insists that its remuneration of top Popular Party officials and staff has always respected the law and its tax obligations," the right-leaning party said in a statement.

"It therefore denies the systematic payment of salaries other than those included in the monthly payroll with their corresponding tax and social security payments."

When contacted by El Pais, all the top officials who were named in the report denied receiving hidden payments on top of their regular salaries.

A spokeswoman for Rajoy said he reaffirmed earlier statements that officials would be held to account for any wrongdoing.

"There is absolutely nothing in the El Pais story about undeclared, extra payments," she told AFP.

El Pais said Rajoy collected 25,200 euros ($34,000) a year between 1997 and 2008, a total of more than 250,000 euros, citing handwritten accounts that it said were kept by two former party treasurers, Alvaro Lapuerta and Luis Barcenas.

El Pais said the fund was made up of donations, mostly from construction companies.

But the paper said such donations to political parties would not be illegal so long as they were all declared to the taxman.

Barcenas is already under investigation following reports that he had stashed up to 22 million euros ($29 million) in Swiss bank accounts until 2009.

One photograph in El Pais showed a supposed 1999 ledger marked on one line: "M. Rajoy - second semester", with a sum of 2.1 million pesetas (12,600 euros) on the outgoing column.

Former IMF managing director and senior Popular Party official Rodrigo Rato was shown receiving 2.28 million pesetas for the same period.

Another front-page photograph from 2008 purportedly showed Maria Dolores de Cospedal, who is now secretary general of the party, receiving 7,500 euros for the third quarter of the year.

The centre-left newspaper said the ledger also showed former foreign minister Ana Palacios and former interior minister Jaime Mayor received payments.

"I deny it, what I received was my government salary, period, no additional payments," Mayor told El Pais.

Rato, Palacio and De Cospedal as well as four past secretary generals of the party all denied receiving any such payments, in comments made to El Pais.

"The Popular Party has no knowledge of the handwritten notes that were published nor of their content, which can in no way be recognised as the accounts of this political formation," the party statement added.

"There is no 'hidden accounting' in the Popular Party. The Popular Party's accounts over all these years have adhered to the law governing political parties and are subject to an audit by the Court of Accounts."

The Popular Party said it had ordered its legal department to "analyse the information that was published and study any action which it may take".

Rajoy this month ordered an internal review of his party's finances, to be submitted to an external audit.

That announcement followed a report in conservative daily El Mundo that senior members of the party had received secret payments.

El Mundo, citing unnamed former members of the party's leadership, had said Rajoy never received such payments. It said he ordered an end to the practice in 2009.

Rajoy took office in December 2011. He was the leader of the Popular Party in opposition between 2004 and 2011 and served as interior minister between 1996 and 2004 under then prime minister Jose Maria Aznar.

© 2013 AFP

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