A small and recently created political party, the Progress and Democracy Union (UPyD), was the spark that ignited the judicial investigation opened on Wednesday into possible crimes committed by members of the board of directors at Bankia, the fourth-largest financial entity in Spain. That such a probe will take place in the courts and not in Congress says much about the current state of the chamber. Spain’s parliament is incapable of fulfilling the same sort of role as the US Congress, which intervened in a serious manner after the financial meltdown of 2008, and the British Parliament, which has leapt into action just days after revelations of manipulation of the interbank interest rate by Barclays and other banks were made public.
Tied up by the governing Popular Party (PP) majority and hesitation on the part of the Socialists, the Spanish parliament has taken no initiatives beyond the sporadic summoning of officials for closed-doors question-and-answer sessions. The result of this is the opening of a judicial investigation at the express request of a parliamentary party. Those Bankia executives, who were seemingly being shielded from questioning and exposure to the media glare, must now report to the High Court as official targets of the investigation. Their number includes the high-profile personality of Rodrigo Rato, a former economy minister and IMF managing director, while among those being called as witnesses are the former Bank of Spain governor, Miguel Ángel Fernández Ordóñez and the auditor who refused to sign Bankia’s accounts as drawn up by Rato’s team.
However, the investigating judge, Fernando Andreu, has pointed out that although he has called on board members of Bankia and parent company BFA to testify as official targets of the probe, it is not yet possible to pinpoint the potential accusations that could be leveled at each individual.
The need for this investigation had become an imperious one. The profits that turned overnight into record losses, Rato’s resignation, the hasty nationalization of the bank, the discovery of a 23-billion-euro hole in its accounts and the request for European financial assistance: all of this could not be simply passed over without the slightest explanation to the taxpayers who will end up footing the bill. To the Bankia probe must also be added the decisions by attorneys in Galicia and Catalonia to open investigations into the goings-on at other lenders which availed themselves of state rescue funds.
But all of this does not mean parliament can shirk its duty: to represent Spaniards. Besides the débâcle of Bankia, Congress’s reluctance to intervene is a fiasco which has yet to be resolved.