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Rajoy Government in Spain Is Threatened by Verdicts in Corruption Case

Posted May 25, 2018 11:29 a.m. EDT

At the height of a corruption scandal five years ago, Prime Minister Mariano Rajoy of Spain denied his party had operated a slush fund, shortly after his former treasurer was found to have hidden millions in Swiss banks.

Rajoy also promised full transparency to stop a scandal based on what he called “apocryphal” evidence from further undermining his party. “This is as far as it will go,” the prime minister said at the time in a televised address.

Now, however, the issue of corruption in Rajoy’s Popular Party has returned with a vengeance to the top of Spain’s political agenda, threatening the survival of his minority conservative government.

On Friday, the main Socialist opposition party tabled a parliamentary motion to hold a vote of no confidence to oust Rajoy, a day after his party’s former treasurer, Luis Bárcenas, was sentenced to 33 years in prison and fined 44 million euros ($51.3 million) for benefiting from a kickbacks-for-contracts scheme.

The judges sentenced 28 other businessmen and politicians, who received more than 300 years in combined prison sentences, and they ordered Rajoy’s party to pay a fine of 245,000 euros, making it the first Spanish political force to be convicted of operating a slush fund.

A no-confidence vote against the prime minister is not yet a certainty and will require the backing of other parties. But Friday, the other parties critical to whether the motion will be scheduled in coming days indicated their support.

They included the far-left Podemos Party, which leaves Rajoy’s fate essentially in the hands of the Ciudadanos Party, which has supported him since late 2016.

On Friday, Ciudadanos told Rajoy to either call a snap national election or expect Ciudadanos to join the no-confidence motion against him.

“For a decade, the response of the Popular Party to corruption has been denial, overlooking it, trying to cover the scandal — instead of admitting the deep nature of the problem and starting a renewal of both the names and structures of the party,” said Víctor Lapuente, a Spanish associate professor at the Quality of Government Institute of the University of Gothenburg.

In the short term, Rajoy’s strategy worked, Lapuente said, but “accumulatively, this rejection of the problem has boosted the chances of its main political competitor, and now, for the first time, hard-core right-leaning voters have an alternative in Ciudadanos.”

Ciudadanos has been gaining recently in the polls in part because of its hard-line opposition to Catalonia’s independence movement. The conundrum for Ciudadanos now is how to balance its commitment to uprooting corruption with its pledge to safeguard Spain’s political stability at a time when the government in Madrid continues to face a secessionist challenge there.

This month, separatist lawmakers elected a new Catalan president committed to forming an independent republic in the prosperous northeastern region, where support for Rajoy’s Popular Party, known as the PP, has cratered after months of political standoff.

“The corruption of the PP has ended and asphyxiated this legislature,” José Manuel Villegas, the secretary-general of Ciudadanos, told reporters Friday morning. “Mr. Rajoy cannot hide behind inaction and ineffectiveness.” Rajoy acknowledged that the court ruling and other recent corruption scandals had damaged his party, but not to the point of threatening his government’s survival.

“These are cases dating back many years,” Rajoy told Cope, a radio station, Thursday. “It’s clear that the PP is a lot more than 10 or 15 isolated cases.”

In fact, Spain’s judiciary has been handling hundreds of indictments of political corruption involving different parties across most regions since 2012, when the country received a European banking bailout after its construction bubble burst, which also brought to the surface the extent to which its building frenzy had relied on illegally approved and financed works.

The corruption headache comes only days after Rajoy won some breathing room from Basque nationalist lawmakers, who used their pivotal votes to back his government’s next budget, despite their earlier pledge to withhold support until Rajoy’s government ended the direct rule it imposed on Catalonia after the region tried to secede last year.

Rajoy is not obliged to call another national election until late 2020, after surviving two inconclusive elections to start a second mandate in 2016, with the support of Ciudadanos.

Even with Ciudadanos joining the call to remove Rajoy, a no-confidence vote in Parliament also requires opposition parties to first agree on an alternative government leader, which significantly reduces its chances of success, according to Antonio Barroso, a political analyst at the consulting firm Teneo Intelligence in London.

“Opposition parties will likely engage in a blame game regarding the failed motion rather than effectively coordinate to get rid of Rajoy,” Barroso forecast in a note Friday.

Thursday’s court ruling followed not only the most prominent but also one of the longest corruption investigations in Spain, started in 2009 by the investigative judge, Baltasar Garzón.

The investigation focused on public contracts signed between regional conservative politicians and a group of businessmen led by Francisco Correa during Spain’s construction boom.

The investigation was code-named Gürtel, the German translation of Correa’s name (which means belt). It eventually snowballed and split into several different cases, including some centered on Rajoy’s national party and its links to the hidden Swiss money of Bárcenas.

Correa received the most severe sentence Thursday: 51 years in prison. Among the other people condemned was Ana Mato, a former health minister in Rajoy’s government.

Mato was ordered to reimburse 27,800 euros for gifts and family trips paid for by one of the companies at the heart of the kickback scheme, while her former husband and fellow politician, Jesús Sepúlveda, was sentenced to 14 years in prison. In 2013, Rajoy initially sought to distance his party from the dealings of Bárcenas, until a series of embarrassing text messages between the men were leaked to the Spanish news media.

“Luis, we are doing what we can,” Rajoy texted to Bárcenas, shortly after the scandal broke. “Luis, be strong.”

Threatened with a no-confidence vote at that time, Rajoy changed tack abruptly to accuse Bárcenas of cheating his own party to enrich himself. Many analysts considered that Bárcenas, after years of close service to the Popular Party and its top leaders, was being made the fall guy.

Last year, Rajoy became the first Spanish prime minister to be forced to testify in court because of this corruption scandal. Rajoy himself was not accused of any wrongdoing, but he used his court appearance to deny emphatically that illegal payments had been made from a party slush fund.

In Thursday’s ruling, the court said not only that such a fund existed but also that Rajoy’s testimony “should be questioned.”

Even if Rajoy survives the current no-confidence challenge, Spain’s judiciary is still slowly sifting through several other cases related to his party. This week, Eduardo Zaplana, a former conservative minister, was detained by the police in Valencia as part of a separate corruption and money-laundering investigation.

Rajoy should brace himself for “more judicial nightmares for the Popular Party in the next few months,” Lapuente, the politics professor, said.