Rodrigo Rato, Ex-Chief of Spain’s Bankia, Loses Bid to Avoid Prison

MADRID — Rodrigo Rato, a former managing director of the International Monetary Fund, was set to enter a Spanish prison Thursday after failing to win an appeal of his 2017 conviction for credit card fraud while running Bankia, a giant Spanish lender that nearly collapsed in 2012.

Rato, 69, who was sentenced to 4 1/2 years in prison, was convicted with dozens of other former directors and executives of Bankia for misusing the bank’s funds to make their own lavish purchases. Over a decade, Bankia’s executives unlawfully used the company’s credit cards to make purchases totaling 12.5 million euros ($14 million).

The imprisonment will mark another chapter in the long-running case of Bankia and its mismanagement. Rato, a former finance minister of Spain, who was once seen as a potential prime minister, is the most prominent Spaniard to enter prison since the country was plunged into a European banking bailout by Bankia’s near-collapse.

His predecessor as chairman of the bank, Miguel Blesa, was also sentenced last year to prison for misusing the company’s funds. Five months later, Blesa killed himself with a shotgun.

This week, Spain’s national court rejected Rato’s appeal to have the prison term suspended while he tries to file a final appeal before the constitutional court. Instead, the national court set Thursday as the deadline for Rato to enter prison of his own accord.

Rato and other former Bankia executives are still awaiting a ruling in another, broader case centered on their mismanagement of Bankia. In that case, they stand accused of misrepresenting the bank’s financial soundness as it was preparing a public stock offering in 2011.

Bankia went on to report a loss for 2012 of 19.2 billion euros, then the largest in Spanish corporate history. Separately, Rato has also been investigated for tax evasion relating to property purchases, including that of a hotel in Berlin.

Rato was the finance minister in the conservative government of José María Aznar, which was in office from 1996 to 2004. He then led the IMF from 2004 to 2007, winning the job thanks to his reputation as the architect of Spain’s construction-led boom.

After his return to Madrid, Rato took over from Blesa as chairman of Caja Madrid, a regional lender, in 2010. He helped spearhead a seven-way merger to form Bankia after the bursting of Spain’s construction bubble in 2008. But he resigned as executive chairman in 2012 just before the state nationalized the bank and negotiated bailout to rescue it and smaller struggling banks in Spain.

After Bankia’s bailout, the focus shifted to the courtrooms. In 2014, Rato and others were ordered to stand trial for misusing their credit-card privileges while also providing dozens of members of the board and their well-connected friends with unauthorized company credit cards that were issued separately from their normal remuneration packages. The cards were used for personal purchases, like clothing, restaurant meals and travel, as well as cash withdrawals.

The prosecution accused Rato of making illegal personal purchases while running Bankia worth 54,800 euros.