Watch the Sitholes every Thursday at 17h30 on e.tv
Madrid - When Luis Barcenas, a former treasurer of Spain's ruling People's Party now at the heart of a growing corruption scandal, deposited 14 million euros in a new account at his Swiss bank in 2005 the bank asked him to explain how he came by the money.
Barcenas told Dresdner bank, since acquired by LGT bank, the funds came from his involvement with eight Spanish and Argentine companies and from real estate and fine art deals, according to documents from the examining magistrate's evidence file in a Spanish High Court investigation seen by Reuters.
Three companies that Barcenas told the bank his funds had derived from have denied any links with him, raising questions about the provenance of the money in a case that has become increasingly uncomfortable for Prime Minister Mariano Rajoy.
Other companies he claimed links with have confirmed them. Others have gone out of business and could not be reached.
The former party official is the key figure in a corruption case that has damaged Rajoy politically as he grapples with a grave economic crisis, and has added to Spaniards' suspicions of a deep rot now afflicting the democracy that emerged 35 years ago following the death of General Franco.
Barcenas is being investigated by a High Court magistrate who is seeking to establish whether he used his party position to take bribes and concealed the money in Switzerland.
Through his lawyer, Barcenas declined to comment for this story. Rajoy has denied allegations of party funding irregularities involving Barcenas. LGT, where Barcenas has been a client since 1990, declined to comment on its dealings with him, citing banking secrecy laws.
In 2005, Barcenas' bank in Switzerland, Dresdner, which was bought by LGT in 2009, carried out background checks to establish that the 14 million euros ($18 million) that Barcenas was moving from one account to another at the bank were clean.
Bank officials looked into the business ties Barcenas had provided to explain where his money came from and concluded it came from legitimate sources, according to the court documents.
Internal emails between Dresdner staff, contained in the banking records that are part of the court file, show that a person from the bank met Barcenas in August 2005 in an effort to establish whether his money was related to his political activities. “Client confirmed that his political duties started in May 2004 and that the assets with us have no relation at all with his current and recent function,” reads one of the e-mails.
Barcenas worked for the PP from the early-1980s until 2009, mostly in the accounting department. He became a senator in 2004 while continuing to keep books at party headquarters. He was officially party treasurer from 2008 to 2009.
The records from what was then Dresdner bank show that Barcenas said he made his money in part from involvement in eight companies including television production company Serena Digital, and water treatment firm Larga de Duero Enercorr XXI. Serena Digital's president and a public relations representative for Enercorr told Reuters that Barcenas had never had any link with either company.
Another firm, consulting company Netcheck, said it had been a source of a relatively small amount of money for Barcenas, while another, a financial fund now owned by Bankia bank confirmed Barcenas was a board member.
Two companies Barcenas cited, Producciones Altea Films and Padel Set, have closed and principals could not be reached.
Another company that Barcenas named is La Moraleja, an Argentine citrus and soy producer owned by the family of Angel Sanchis, another former PP treasurer. The company referred Reuters to a lawyer, who did not respond to requests for comment. The company's president released a statement through Spanish news agency EFE denying any links with Barcenas.
Barcenas said he had an interest in a company called Acesa. The court papers show that Dresdner employees looked into two Spanish companies with that name. One of them, a toll-road operator, told Reuters it has no links with Barcenas. Another, Accion Editorial SA, has gone out of business, according to the corporate registry, and Reuters was not able to contact anyone there. There are other companies with similar names but Reuters did not contact them.
The court papers also referred to fine art and real estate dealings cited by Barcenas as a source of funds in addition to the companies.
A Spanish police report, that is part of the evidence file at the High Court, showed inspectors found records showing net gains of about 300 000 euros in sales of property Barcenas and his wife had title to, but no record of art dealings by him.
While the sources of Barcenas' money are unclear, the millions in offshore accounts have riled Spaniards at a time when Rajoy is asking them to accept cuts in wages and social services to save the government from potential bankruptcy.
Barcenas left the People's Party, or PP, in 2009 when he was accused of involvement in a kickbacks scheme in which companies overcharged for putting on events such as campaign rallies and shared extra profits with local PP politicians.
Since then the examining magistrate - akin to a prosecutor in the Spanish legal system - has continued to investigate Barcenas in connection with the kickbacks scandal.
Barcenas could face a prison sentence of up to six years, and fines, if convicted of bribery, one of the offences he is charged with by the High Court. The court this month added money-laundering and tax fraud charges.
Meanwhile investigators are poring over his banking records at LGT, which were provided by Switzerland in November.
The bank records do not necessarily show wrongdoing. They are part of an ongoing investigation and it is not yet clear how the examining magistrate will use the evidence as he tries to build his case for tax fraud and money laundering charges.
The magistrate's long-running investigation of Barcenas and the kickbacks scandal had largely faded from view until January when El Pais newspaper published what it said were secret party financial records he kept over almost two decades.
Barcenas has called the supposed ledgers a forgery and denied wrongdoing. Rajoy has denied any illegal accounting at the party.
Barcenas is due to appear on February 25 before the examining magistrate in Madrid to respond to the charges against him. - Reuters