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THE BÁRCENAS PAPERS

Police report confirms alleged illegal funding practices by Popular Party

Financial crimes unit says illegal donations were laundered in official accounts

A police report finds that the ruling Popular Party (PP) deliberately concealed illegal funding for years by breaking up donations above the legal limit into smaller amounts.

"We observe a conduct persistent over time and consisting of transforming nominal donations above the legal limit into deposits to the anonymous donor account, dividing the amount into multiple portions of a lesser value, so that it becomes impossible to verify whether contribution ceilings are being surpassed," reads the main conclusion of a report by the National Police's UDEF financial crimes unit.

The report is the result of comparing the so-called Bárcenas papers (secret ledgers kept by former party treasurer Luis Bárcenas between 1990 and 2008) with the PP's official accounts.

The 131-page document confirms that the PP allegedly violated party finance legislation by divvying up illegal large donations into smaller amounts before depositing them into the party's donations account in Banco de Vitoria.

Bárcenas' handwritten accounts, which were first published by EL PAÍS on January 31 and the authenticity of which has been verified by the police, show donors' names and the full amounts handed over, which often violated party financing law on two counts: first, they went over the 60,000-euro limit for any one individual or company; second, many donors were builders or developers who were simultaneously getting government contracts, a conflict of interests that is forbidden by law.

There are single contributions of up to 250,000 euros, and the same individual donated 400,000 in one year. The legal limit was surpassed on more than 30 occasions.

The UDEF notes that donor companies such as OHL, Sando, Sacyr, Azvi, Aldesa and Contructora Hispánica received government contracts from public agencies controlled by the PP, the Socialists and other parties.

The practice of breaking up large donations into smaller chunks was meant to ensure that the Court of Auditors, which checks official party accounts, would not notice the illegal amounts. The conservatives have fallen back on the court's approval of its official accounts as "evidence" that there was no wrongdoing.

Bárcenas' parallel accounts also show that part of the money from donations was used to pay unofficial cash bonuses to most members of the PP's upper echelons, including current Prime Minister Mariano Rajoy. These under-the-table payments are also illegal because some of the recipients were already getting a salary as government officials, and were thus barred from any other kind of wages. In his statements to anti-corruption officials last February, Bárcenas admitted to the existence of these bonuses, but described them as "entertainment expenses" that were subject to income tax.

Later this month, several well-known PP politicians will have to explain in court why they show up on Bárcenas' accounts as recipients of the cash-filled envelopes, including Senate speaker Pío García Escudero and former Balearic Islands premier Jaume Matas.

Investigating High Court Judge Pablo Ruz has also indicted eight current or former business executives who show up as donors, including three from leading construction companies OHL, Sacyr Vallehermoso and FCC. The Bárcenas papers also mention other leading businessmen who so far have not been called in for questioning, such as Ramón Aigé of Sorigé and Adolfo Sánchez of Asphalt Road. The police are recommending that Judge Ruz investigate contracts received by their respective firms.