Spain's government jumps to calm corruption scandal

1st February 2013, Comments 0 comments

Spain's government leapt to calm a growing corruption scandal Friday over alleged undeclared payments in the ruling party, with Prime Minister Mariano Rajoy set to speak out after being named in the affair himself.

The government run by Rajoy's conservative Popular Party insisted the publication of hand-written ledgers purportedly showing secret payments to Prime Rajoy and other top party officials had not threatened its stability.

"The prime minister will make his position known tomorrow," Deputy Prime Minister Soraya Saenz de Santamaria told a news conference.

"The government is one thing and the parties are another," she added. "This government enjoys great stability."

Rajoy, 57, called an extraordinary meeting of the party's national executive committee on Saturday, a party spokeswoman said earlier, after the report by leading daily El Pais ignited a political firestorm.

He will address the allegations after the meeting, Saenz de Santamaria said.

Anger boiled over in the public and in the media over the allegations that the party had dished out undisclosed money from donors, including property developers, to Rajoy and other top party officials.

Popular Party secretary general Maria Dolores de Cospedal on Thursday rejected the allegations, saying the ledgers were full of falsehoods, but she failed to stem the mushrooming scandal.

Rajoy's right-leaning government is imposing an austerity squeeze on Spaniards suffering a jobless rate of 26 percent -- the highest since the return of democracy after the death in 1975 of General Francisco Franco.

Hundreds of demonstrators rallied outside Popular Party headquarters in Madrid on Thursday night to denounce the supposed secret payments, chanting: "Thief" and "Resign" and calling Rajoy a "delinquent".

El Pais cited ledgers kept by two former party treasurers, Alvaro Lapuerta and Luis Barcenas, apparently showing payments including 25,200 euros ($34,000) a year to Rajoy between 1997 and 2008.

Most top officials named in the report said the allegations were false.

Barcenas, one of the supposed authors of the ledger, roundly denied the report, saying none of the payments listed by El Pais were actually made while he had oversight of the party's accounts.

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

"The affair is of extraordinary political gravity and leaves the Popular Party and the government on the ropes. They must not only collaborate with the justice department but also show absolute transparency," said an editorial in centre-right daily El Mundo.

El Pais said the alleged fund was made up of donations, mostly from construction companies, adding that such payments would be legal as long as they were fully declared to the taxman.

One photograph in El Pais showed a supposed 1999 entry in the ledgers marked: "M. Rajoy - second semester", with a sum of 2.1 million pesetas (12,600 euros) on the outgoing column of the party's funds.

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

Another front-page photograph from 2008 purportedly showed Cospedal receiving 7,500 euros for the third quarter of the year, a claim she flatly rejected.

The Popular Party has threatened to sue over the reports.

The leader of the main opposition Socialist Party, Alfredo Perez Rubalcaba, demanded that Rajoy answer two questions: whether he received the money and, if so, whether it was properly declared.

"He has to answer these himself, the head of the government, because we we have a very big crisis at this moment; a critical situation," Rubalcaba said, charging that Cospedal's denial lacked credibility.

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

© 2013 AFP

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