Chris Bambery – Spain’s King of Bung and Endemic Corruption

The other side of the coin from state terror is corruption.

Spain: Rampant corruption, abuse of women, state terror in Catalonia and the Basque Country. Another model EU nation.

Chris Bambery is author and broadcaster. Co-author (with George Kerevan) of Catalonia Reborn: How Catalonia Took on the Corrupt Spanish State and the Legacy of Franco (Luath Press, June 2018)

Image result for wikimedia commons king juan carlos

The House of Windsor may have a few problems, but they shade away with those lapping around the feet of their Spanish cousins.

King Felipe V1’s brother in law, Iñaki Urdangarin, is currently serving five years and 10 months in jail having been found guilty of exploiting his royal connections to win contracts and embezzle millions in public funds for private spending. His wife, the Infanta Cristina had her title, the Duchess of Palma de Mallorca, removed. She had been found not guilty of charges of tax evasion and fraud.

Now the King’s father, former King Juan Carlos, is in the frame. He abdicated the throne in 2014 because of the embezzlement scandal centred on his daughter and son in law and over an elephant hunting vacation in Botswana funded by Mohamed Eyad Kayali, a businessman of Syrian origin. The trip was a secret and the public only found out when a plane had to be sent to bring him home after he injured himself.

El País estimated the total cost of a hunting trip at €44,000, about twice the average annual salary in Spain. In 2012, when Juan Carlos travelled to kill those magnificent animals, Spain was in the middle of a vicious recession which followed the earlier financial crash; unemployment was at 23 percent, reaching nearly 50 percent for young workers.

Then in 2018 in a conversation with a former Spanish police officer, which he recorded, the alleged lover of the former king, Princess Corinna zu Sayn-Wittgenstein, stated that he had exploited her tax residency in Monaco to buy multiple overseas properties. The princess also claimed that Juan Carlos held bank accounts in Switzerland in the name of his cousin, Álvaro Orleans de Borbón.

The Princess also accused Juan Carlos of pocketing a share of an €80 million kickback for a Spanish high-speed rail deal with Saudi Arabia. The Spanish public also discovered Juan Carlos had an estimated fortune of up to €2 billion.

Now The Sunday Telegraph has revealed that the same cousin, Álvaro Orleans de Borbón, a close confident of the former king, was allegedly paid millions of Euros in commission for the sale of a Spanish bank to Barclays Bank.

The paper suggested that Álvaro Orleans de Borbón received up to 50 million Swiss francs (€47 million) for the sale of Banco Zaragozano to Barclays Bank of London.

Once more revelations about the extent and origin of Juan Carlos private fortune means the former king is facing calls for public scrutiny from members of the Socialist led coalition in Spain and from Catalan deputies in the Spanish Parliament whose abstentions allowed Pedro Sanchéz to form an administration. Juan Carlos has immunity for his actions while on the throne but not those following his abdication.

It is hard now to recall that back in 1981 Juan Carlos was acclaimed by all as the great defender of Spanish parliamentary democracy after he went on TV to halt a military coup. In fact, as George Kerevan and I point out in our book Catalonia Reborn, it took several hours and many phone calls before Juan Carlos made that broadcast and a former German diplomat would reveal he confided his sympathy for its aims. But the myth lasted.

Today the Spanish monarchy is tarnished, particularly in Catalonia. In October 2017 following the Catalan independence referendum King Felipe V1 stated Catalonia ‘will remain’ Spanish. In a TV broadcast he said that Catalan President Carles Puigdemont and those who organised the referendum had “broken the democratic principles of the rule of law” and showed “disrespect to the powers of the state”.

In November last year polls showed 72.9 percent of Catalans rejected the monarchy.

Across Spain a narrow majority support it but it is finally balanced. The contrast with Britain, and England in particular, is stark.

But corruption in Spain is not just found in the Royal Family it is institutionalised in the state. No capitalist state is free of corruption and the celebration of the accruement of individual wealth under neo-liberalism has fed it.

But in Spain it reaches heights it is sometimes difficult to take in. In July 2018, the European Green Party released a report detailing the costs of corruption across the EU. In Spain, corruption costs amount to €90 billion annually, or 8% of GDP, it found. Polls find that corruption stands among the highest concerns of Spanish citizens, with 94% believing the problem is widespread.

The most recent World Bank’s Worldwide Governance Index (WGI), based on perceptions of six dimensions of governance, indicates that Spain’s ranking in terms of “control of corruption” (defined as perceptions of the extent to which public power is exercised for private gain) declined to 72.6 in 2018 from 68.27 in 2017 (out of 200 countries).

The current Spanish premier, Pedro Sanchéz, took office after his predecessor, Mariano Rajoy, was forced to step down over the biggest corruption case in Spain’s recent history, involving those at the heart of his centre right People’s Party (PP). Rajoy was the first serving prime minister forced to give evidence in a trial. Earlier he had declared, “This is not a PP plot. This is a plot against the People’s party.”

The case centred on a complex scheme for funnelling illicit donations and bribes to the PP in exchange for government contracts.

It became known as the Gürtel case, the German translation of the surname of the businessman at the centre of the racket, Francisco Correa, meaning “belt” in English.

Correa received a 51 years jail sentence. The Treasurer of the PP, Luis Bárcenas, was central to the scheme and Spanish police discovered Bárcenas’ notebooks detailing bribes paid to PP officials and to illegally fund the party. These totalled €123 million between 1999 and 2005, according to Spanish business publication El Confidencial.

Bárcenas was jailed for 33 years and ordered to pay a €44 million fine. The PP was ordered to pay a fine of €240,000 because of the money it received as kickbacks.

The ruling Socialist Party has also found itself mired in corruption cases. Last November two former premiers of Andalusia, which the Socialist Party had governed for 36 years, were found guilty of mis-using public funds, one of them receiving a six-year jail term. The case involved public money from a €680-million unemployment being given to ineligible recipients, many of whom had ties to the Socialist Party. A total of 19 people were convicted over this racket

During the Spain’s bubble boom, from the mid-1990s to 2007, Spain built more homes than France, Germany and the UK combined. Relatively small towns built airports, and new roads and high-speed rail lines spread across the country. Before the bubble burst this hothouse boom threw up countless possibilities for rigged contracts and kickbacks. The financial crash of 2007-2008 left behind abandoned housing projects and airports with no flights.

But in truth the corruption which mires the Spanish state goes back much further in origin. In our book George Kerevan and I quote the historian Paul Haywood who argues:
“Spain’s entire political history since the monarchical restoration of 1875 has ben marked by corruption in one form or another.”

He adds:

“Yet the most corrupt of all regimes in Modern Spain was undoubtedly the Franco dictatorship.”

The family of the dictator accumulated great wealth, palaces and titles, all of which they keep till this day. Franco used corruption as a means to control and reward his close supporters and the two hundred families who controlled the economy.

After the dictator’s death in 1975 state monopolies were privatised only in name. In practice they were simply transferred into the private hands of those same oligarchs, intimately connected to the new post-Franco ruling elite.

The eminent historian of 20th century Spain, Paul Preston, argues:

“In general the idea that public service exists for private benefit is one of the principal legacies of his regime.”

As the 20th century closed most of the 300 largest Spanish fortunes date from Francoism, and in 2010 most of that wealth was in the hands of just 50 families. Meanwhile political parties depended on donations for their funding and the Socialists and the PP have competed for control of saving banks and directorships of the big banks.

Which brings us back to the House of Borbón (Bourbon in French). Telleyrand quipped after the French branch were restored to the throne following the defeat of Napoleon that “they had learned nothing and forgotten nothing.” Some family traditions never change.

Juan Carlos elevated scores of key figures in the Franco regime to the aristocracy which circles the crown. The wealth they accumulated under Franco ensured their place in the oligarchy of democratic Spain. Great landowners benefitted from the EU’s Common Agricultural Policy. Many were on the boards of the banks already or soon would be, others benefitted from the privatisation of former state owned corporations.

It is little wonder that corruption flourished; and still does. But as with political repression the European Union stays mum over the rotten record of today’s Spain.

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