Now A Vast Political Espionage Scandal To Top Off The Sordid Corruption Scandal In Spain

Spain just can’t catch a break—a horrid economy with dizzying unemployment, collapsing banks, a prime minister and ruling party tarred by corruption…. Now a political espionage scandal blew up, scattering debris and money laundering allegations far and wide.

Unemployment in Spain was 26% in December, youth unemployment 55%. GDP last quarter dropped for the fifth month in a row (-0.7%), the steepest decline since the financial crisis. Consumer spending plunged 10% in December from prior year—following a hike in the value-added tax. And the budget deficit target of 6.3% (not counting the billions plowed into bailing out the banks) is skidding out of reach.

This leitmotif is accompanied by an elegantly escalating corruption scandal that broke in early February. A classic cash-for-contracts arrangement, where senior politicians received secret payments from business folks who in return were awarded juicy government contracts.

It was documented in handwritten ledgers, involved a €22 million slush fund in Switzerland, and was allegedly run by Luis Bárcenas, the ex-treasurer of the conservative People’s Party (PP), the party of Prime Minister Mariano Rajoy, whose name appears repeatedly and very inconveniently on the ledgers as recipient.

Add a political espionage scandal. The case blew up in a peculiar manner. According to sources—everything in this case is “according to sources”—Método 3, a detective agency, went out of business not long ago. One of its laid-off employees was an ex-cop, in charge of the data department. When Método 3 couldn’t pay him what it owed him, he appropriated the computers, video and audio recordings, and a bunch of sensitive files. And they’ve shown up at the technical division of the police in Barcelona.

Now “sources” are talking about what’s in this treasure-trove. Apparently Método 3 had been commissioned by a long list of clients to spy on Catalan party leaders, politicians of national parties, judges, prosecutors, executives, and other prominent figures, sources told La Vanguardia. One of the recordings was of a lunch meeting at a restaurant in Barcelona in July 2010 between Alicia Sánchez-Camacho, President of the PP in Catalonia, and a woman named María Victoria Álvarez.

Álvarez was desperate and scared. She told Sánchez-Camacho that she’d gone on a road trip to Andorra with her then boyfriend, Pujol Ferrusola. The trunk was loaded with packets of 500-euro notes, which he deposited in a bank account there.

She outlined how Pujol Ferrusola—son of powerbroker Jordi Pujol, leader of the Democratic Convergence of Catalonia (CDC) from 1974 to 2003 and President of Catalonia from 1980 to 2003—was doing his family’s money laundering. She wanted to report him but feared for her life. So she asked Sánchez-Camacho for help.

The Pujol-Ferrusola family has been fingered in a police report that seeped to the surface in 2012. While Jordi Pujol was in power, companies associated with his sons were awarded lucrative contracts allegedly through false bidding. These cases had been investigated at the time, but nothing happened…. Until the recording of a conversation about a trunk full of euros popped up.

On Thursday, Álvarez finally testified before the High Court about what she’d witnessed.

Also on Thursday, Sánchez-Camacho pressed charges with the police and filed a complaint in court against Método 3. She’d found out by reading the papers that her lunch conversation had been recorded—and that the top official of the Catalan Socialist Party (PSC), José Zaragoza, at the time party secretary, had allegedly commissioned Método 3 to do the dirty work.

Interior Minister Jorge Fernández announced an “exhaustive” investigation. “We have a lot of information,” he said ominously. Zaragoza and others accused of anything whatsoever have denied everything.

Sources have told La Vanguardia that the materials are so massive that the police have formed a special team, supported by police units from Madrid, to investigate them. The lunch episode uncovered a web of “unpredictable scope.” The investigation is still in an early stage, sources said, but the client list of Método 3 is long and “delicate,” and includes officials of various political parties and institutions, and the number of people tangled up in it is vast. “This is about top politicians,” said the sources.

These revelations are driving the political elite ever deeper into a malodorous morass just when that same elite is forcefully tightening the belts of the people. Workers have taken pay cuts, social benefits have been trimmed, families have lost their homes, the VAT, which hits everyone, has been jacked up, all to squeeze the maximum from those who still have any juice left. Yet, Spain’s legal system wasn’t designed to root out corruption; and Rajoy, among others, may be thinking that this too shall pass.

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