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Ex-IMF chief Rato faces trial over Spanish credit card use

Source: Reuters - Mon 1st Feb 2016
Ex-IMF chief Rato faces trial over Spanish credit card use

Spain's High Court said on Monday it would open a trial against former IMF chief Rodrigo Rato and dozens of other people alleged to have misused credit cards for personal expenses while at Spanish lender Bankia.

Rato, a former Spanish finance minister and one-time leadership contender for the ruling centre-right Partido Popular has denied wrongdoing in the case and in other investigations related to Bankia.

The announcement of Rato's trial comes after a series of corruption investigations into other individuals closely linked to the PP, which lost its outright majority in December's general election partly as result of public exasperation over a slew of graft scandals.

Last week in Valencia police arrested 24 people, including a former regional head of the PP and many others involved in the party, following a corruption investigation into public work contracts.

the expenses case, prosecutors have been pushing for a four-and-a-half year prison sentence for Rato, Bankia's chairman shortly before it needed a state bailout in 2012. Reuters was not able to contact a lawyer representing Rato.

Bankia's stock market listing, which took place under Rato's watch in mid-2011, is also being investigated by the High Court, though there is no decision yet whether that case will go to trial.

Many ordinary Spaniards lost money after their shares plummeted in value following the bank's bailout less than a year later at the height of the euro zone debt crisis.

The court also said Miguel Blesa, Rato's predecessor at Caja Madrid, which merged with other banks to form Bankia in 2011, would go on trial, along with 64 other people.

The Spanish prosecutor has called for a six year prison sentence and 9.34 million euros in damages for Blesa, a friend of former PP PM Jose Maria Aznar. Blesa also denies any wrongdoing.

The court statement showed that between 2003 and 2012, during the tenure of both Rato and Blesa, former board members and executives at Caja Madrid and later Bankia spent just over EU12 Mln on company credit cards.

"A sort of compensation system was established that lacked any legal protection," the court document said of the scheme.

When news of the scandal first emerged 2 years ago, the purchases, a mix of the mundane and the extravagant - from cinema tickets, groceries and flowers to jewels, holidays and clothes - fuelled Spaniards' anger against graft as they suffered through a deep recession.

Corruption has been Spaniards' second-biggest concern since early 2013, official polls show, behind only the country's sky-high unemployment rate.

Recommended Reading :

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* Madrid court freezes assets of former IMF Chief Rato