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Marbella battles to pay off its debts and recover its once-glittering lure

Southern city has an uphill struggle to clean up the mess left by corrupt leaders

An aerial view of Marbella's famous harbor from 2007. Ampliar foto
An aerial view of Marbella's famous harbor from 2007.

It was back in 2006 that law enforcement officials began to clean up the corruption in Marbella, the resort city on Spain's southern coast. After 15 years of seeing its municipal coffers literally plundered by corrupt governments, who were driven by real estate interests, the Anadalusian municipality suffered more than any other from the bursting of the housing bubble in Spain. At the same time, the resort's image as an international jet-set destination sunk into a steady decline.

The late Mayor Jesús Gil and his political disciples ran the city under the GIL political grouping. Among their number was the notorious and now-convicted fraudster Juan Antonio Roca. He, along with a number of the other 83 suspects in the Operation Malaya investigation, were given prison sentences on Friday at the end of a marathon court case.

Roca, along with former Marbella Mayor Julián Muñóz, and others like them, left behind around 16,000 illegal construction projects, an oversized municipal staff, and dozens of outrageous court cases that are still working their way at a snail's pace through Spain's slow judicial system. But the legacy that most hampers Marbella's development are its exorbitant debt levels, which, after seven years since Operation Malaya was launched, continues to strangle the city.

Diego Martín Reyes, the head of the receivers that managed the municipality after Marbella's City Hall was officially dissolved, recalled that in 2006 the town council had approximate revenues of 300,000 euros a month, but expenses that soared to the tune of 13 million euros. The first thing he had to do was to negotiate with a bank to stop the auctioning off of the marina berths. It was a chaotic situation, he said.

Take whatever they give you because this will soon end"

The looting of the city was summed up by late councilor Victoriano Rodríguez, who once told a businessman who was trying to secure city contracts (and who was later charged in the Malaya case): "Take whatever they give you because this will soon end."

When the Popular Party (PP) won the elections in 2007, Mayor Ángeles Muñoz began grappling with 600 million euros of debt, which not only included social security payments and taxes, but also what was owed to banks and suppliers. And now the regional government of Andalusia, which helped in a bailout with the advance payment of 100 million euros, will have the final say as to how much trouble the municipality is still in.

Marbella's total debt is currently around 480 million euros – its 2013 budget comes in at 203 million euros. The region has agreed to collect what it is owed within 40 years and some of that money, in some cases, can be paid with assets recovered in the courts.

Malaya fugitive captured

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Francisco Javier Lendínez, a former councilor in Marbella who has been a fugitive for the past five years, was captured on Thursday by authorities at Barajas international airport.

Lendínez escaped after he was sentenced to nine months in jail following a plea deal he reached with prosecutors in the Malaya corruption case.

Airline officials alerted authorities after they entered his flight information into a computer and found that he had been wanted for non-compliance of his sentence.

Lendínez, who served on the Marbella city council from 1999 to 2003, disappeared about five years ago after he failed to report in court.

He was charged with receiving some 18,000 euros in payments linked to a land deal that was part of the ongoing widespread corruption scheme orchestrated by Juan Antonio Roca, the convicted mastermind behind the illegal property ventures during the 1990s and early 2000s.

Lendínez was taken to Málaga, where the court issued an arrest warrant for his capture.

"The debts are in order. Now the goal is for the short, medium and long term so that residents can see some sort of recovery," said Muñoz. So far the municipality has been awarded about 200 million euros from lawsuits, but not one euro to date has been paid. Muñoz blames the complex schemes in framing the ghost entities that make it almost impossible to discover who the real perpetrators were. Her hope now is that the fines handed down in the Malaya case, which now stand at 585 million euros, will have a positive impact.

That same "desire" is included in the ruling handed down Friday by a Málaga court overseeing the Malaya case, and which confirmed the "widespread corruption" that existed in Marbella. Presiding Judge Joseph Godino wrote about the "injustice" committed by Roca and his criminal band, which resulted in Marbella's giant debts. But all the money, property and goods confiscated in the case will under law be handed over to the government, which will determine how those funds will be spent. But the damage done extends further down to the residents of Marbella, who endorsed GIL policies in four subsequent elections: they have been the real victims in the case. They continue to lack adequate facilities and infrastructure. With 104,473 residents Marbella has no home for the elderly and only three health centers. This year, the city inaugurated its first public school since 2006.

"It bothers me that they still only want to project an image of frivolity and not respond to their shortcomings, of which there are many in this city," said Marbella's United Left (IU) spokesman Enrique Monterroso.

As the city struggles to shake off the boorish image that prevailed at the time of Gil and his GIL predecessors, it still is trying to recover its international jet-set image.

Real estate opportunities are again opening a range of possibilities and Russians, with high purchasing power, are responding to the call with a chance to own a second home on the Costa del Sol. The municipality is undergoing "a sustained recovery," said Juan José González, president of the CIT employers' association.

Buying and selling real estate grew 25 percent in the first half of the year with foreign investors who demand luxury goods honing in. Houses now go from between one and six million euros, and experts predict that once this supply is exhausted it will be necessary to start building once more.