PP FINANCES

Bonuses paid out among PP officials spawn deep crisis inside the party

Bárcenas collected fees and delivered donations to the organization’s leaders, including former PM Aznar

Luis Bárcenas seen in 2011 after testifying before a judge at the Madrid regional High Court. / ÁLVARO GARCÍA

The ongoing massive Gürtel corruption inquiry has now turned its focus on the bank accounts and personal finances of the Popular Party (PP) and its leaders. In the wake of the scandal spawned by the discovery that the PP's former treasurer had 22 million euros stashed away in a Swiss account, the party is facing its deepest political crisis in recent years.

Bárcenas, a former PP senator from Cantabria, has been targeted in a money-laundering inquiry. He and his wife are also under investigation for tax fraud and other alleged financial crimes.

For 18 years until he stepped down in 2009, Bárcenas held the key to the party's finances -- first as assistant treasurer and then as treasurer when he replaced Álvaro Lapuerta in 2008 -- and what he knows could prove to be very embarrassing for the PP and Prime Minister Mariano Rajoy. It was Rajoy who gave him the plum job to head up the party's finances.

When he was first targeted by the Supreme Court and the Madrid regional High Court in the Gürtel inquiry, the PP slowly began withdrawing its support for the now 55-year-old former elected official. It also stopped paying his lawyers' fees.

Bárcenas earned about 200,000 euros a year, according to tax returns

According to party sources, Bárcenas had collected so much cash that he began giving top PP officials, including former Prime Minister José María Aznar and Rajoy, donations that came from different private companies. The same sources state that both Bárcenas and Lapuerta kept written records of all the cash that was paid out.

The PP says its accounts are clean, and all money paid out has been reported to the Treasury. The Court of Auditors has also reviewed the PP's finances and found no irregularities, party officials maintain.

This entire investigation comes at a particularly sensitive time for the Rajoy government, which embarked on its first year of deep cuts in public spending on essential services and with promises of greater austerity and transparency to improve the image of politicians. The ongoing Gürtel case investigation, pegged now with the discovery of a secret account held by the former treasurer, is a blow to the PP's credibility.

Lapuerta and Bárcenas also collected these fees but those close to them maintained that all their income was reported to tax officials. According to the Gürtel case summary, Bárcenas' personal accounting files from 2007 show "PP transfers" to his bank account that included a monthly bonus of 6,000 euros along with his regular earnings of 3,500 euros paid through the "PP payroll." Four years ago, Bárcenas charged his party the same amount, but it was all lumped together in one sum under the "PP payroll."

Now the ex-treasurer is airing the party's dirty linen as he feels betrayed

As a party official first, then as treasurer, he earned an average of 200,000 euros a year, according to his tax returns. It was a substantially higher quantity that what the party president and general secretary both earn.

Nevertheless, these salaries - and with his wife unemployed - could not have amounted to the 22 million euros he had stashed away in a Swiss account and listed in the name of a company established in Panama. The former treasurer never declared all his business activities. He told the managers at the Swiss bank where he deposited his money that he was involved in the sale of art works and real estate.

Since being charged in the Gürtel case -- first for allegedly receiving kickbacks from the corrupted frame and then for various tax-related crimes -- Bárcenas has begun airing some dirty laundry of certain party leaders, whom he feels have abandoned him as the judicial process against him unfolds. Even since the PP came to government in December 2011, Bárcenas feels his legal situation has worsened.

Different PP leaders explained to EL PAÍS that party members always claimed bonuses, but these were perfectly regulated and taxes were paid on them. Some of these leaders even turned over copies of their personal income tax statements that show remunerations as parliamentarians and party officials to demonstrate that bonuses were reported to the Treasury.

On Saturday, the PP embarked on a sales pitch to try to stop all the corruption allegations that have been triggered as a result of the discovery of Bárcenas' Swiss account.

"There has never been any illegal paying out of bonuses to party officials at this stage or in the past. All salaries and representation fees paid by the Popular Party are reported to Treasury and are paid out according to law."

With this explanation, the PP seems to mean that these bonuses were actually paid out to its leaders so they could cover their representation expenses, such as meals and travel.

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