By Don Quijones, Raging Bull-Shit.

Whatever you might read in the news these days, it’s not all doom and gloom in Spain. For a certain segment of the population, albeit quite a small one, life has never been better. They include Rodrigo Rato, the man who many blame for the biggest bankruptcy in Spanish history.

Granted, in a normal world one might expect to see Rato struggle a little to find new, gainful employment. After all, he has left a vast trail of carnage and destruction after virtually every office he has held. What’s more, he still faces the prospect, albeit razor slim, of criminal charges for his “alleged” (just in case!) role in the violent implosion of Bankia, which happened mere months after his resignation as CEO.

As such, one might be forgiven for assuming that the revolving doors that have shuttled him to and from the upper echelons of the political and corporate worlds for the last two decades might finally be shut — at least until the dust has settled! But this is Spain we’re talking about and as many Spaniards are wont to say these days, “Spain is different.”

Even before the ink had dried on Rato’s charge sheet, the HR department of Spain’s telecommunications behemoth Telefoníca was on the phone with an offer for him to work as an “advisor” in the company’s Spanish and Latin American markets. It was an offer Rodrigo could not refuse.

Then, in September, Spain’s biggest bank, Santander, appointed him to its international advisory board. In the face of a stinging backlash from opposition parties in parliament and an angry public, Javier Marin, Santander’s CEO, defended the bank’s decision by arguing that it was a quote, unquote, “luxury” for the bank to be able to count on someone with the combined ability and experience of Rodrigo Rato. For its part, Telefoníca spoke effusively of Rato’s global vision.

Given how much flak Rato has drawn over the course of his career — last year he was ranked by Bloomberg as the world’s 5th worst business executive — I decided to do a little bit of digging of my own to see if I could identify what it was that the boards of Santander and Telefoníca could see in him that the rest of us clearly couldn’t.

This is what I found:

1) Abilities

Cooking skills: Rodrigo Rato is clearly endowed with a rare gift for cooking company books with both imagination and flare. Indeed, so audacious was the cooking of Bankia’s books that even Deloitte refused to sign off on them – and with good reason: the 300 million-euro profit announced by the company for 2011 (while under Rato’s leadership) eventually turned out to be a 3 billion euro loss.

The rest is history: the company would be bailed out to the tune of 23.5 billion dollars (and counting). By then, however, Rato was long gone.

Skimming Skills. The ability to skim money off public or private funds is a much-valued skill in today’s corporate world. After all, the extortion of public funds and virtually free central bank money is now the number-one business model of the world’s too-big-to-fail banks and “strategically vital” corporations.

And if someone like Rato, with all the vast experience of extortion and graft he is alleged (by former People’s Party treasurer Luís Bárcenas, no less) to have accumulated while in the upper ranks of the People’s Party, can help the likes of Santander or Telefoníca get that little big closer to the engorged teet of government largesse, who can blame them for taking advantage?

Loyalty. Loyalty is a prized asset in any large organisation, and Rodrigo Rato has it in buckets. Just consider how loyal he was to Lazard, the investment bank he joined in 2008 and from which he was supposed to have resigned before becoming CEO of Bankia.

However, as Bloomberg reports, Rato’s rupture with his former employer was not final. Even while CEO of Bankia Rato controlled a company together with Jaime Castellanos, chairman of Lazard Ltd (LAZ)’s Spanish unit. At the same time, Lazard billed Bankia 9.2 million euros ($12 million) for work either assigned or executed during Rato’s 27-month tenure at the bank.

As Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington, told Bloomberg, Rato’s relationship with Castellanos exemplifies “how a network of leaders from the governing People’s Party helped their associates among the financial elite to profit while the country’s savings banks, known as cajas, racked up losses.”

2) Experience

Public Sector: When it comes to experience, whether in business or in politics, Rodrigo Rato is a cut above the rest. In the last 30 years he has served as Spain’s vice-president as well as its minister of economy. It was in the latter role (1996-2004) that he concocted, together with the Spanish premier José Maria Aznar, a real-estate reform that many argue set the stage for one of the biggest property bubbles of the modern age – a bubble that massively enriched the country’s biggest banks and property developers and which helped pave the way to the consolidation of Spain’s financial sector.

It was perhaps with this in mind that Marin singled out Rato as “one of the best, if not the best, economy ministers Spain has ever had.” In fact, so pleased was the financial establishment with his stewardship of the Spanish economy that, in 2004, he was appointed as the head of the IMF, a position he held until 2007.

Private Sector: In his multiple incursions into the private sector Rato has worked for Lazard, Bankia (and its predecessor Caja Madrid), Catalonian mega-bank La Caixa’s investment banking arm Criteria, Banco Santander (twice!) and Telefoníc.

Given the remarkable ease and frequency with which he has flitted between the private and public sectors, both within and far beyond Spanish borders, there can be no doubt that Rato has built up an impressive network of contacts. And as Marín as good as admitted during a recent press conference, it is this kind of experience that companies like Santander prize the most.

As the Tony Blairs, Laurence Summers, John Majors and Bill Clintons of this world have amply shown, it’s not what former political leaders know that matters: it’s who they know.

And companies are understandably queuing around the block for that knowledge. After all, with privatisations, mergers and new national and global banking regulation looming on the horizon, having someone in your employ that can open the doors and grease the wheels at the highest levels of governance is key to surviving and thriving in the new corporatist utopia.

All of which, by happy coincidence, brings us to the final section of Rato’s unauthorised résumé.

3) Global Vision

During his three-year spell at the helm of the IMF, Rodrigo Rato oversaw an organisation that seemed in a perpetual state of terminal decline. Traditional debtor countries across Asia and Latin America were finally paying back their debts – and in full!  They had finally learned the lessons from the past and were now refusing to take any more of the IMF’s economic shock therapy.

Rumours even began circling that the Fund, now shorn of its lifeblood of ever-growing debt circulation, was effectively bankrupt. The only thing that could save it was a global economic crisis of vast proportions. And as luck would have it, the mother of all crises was already bubbling under the surface of the U.S. subprime mortgage markets.

Despite a 2005 warning from the IMF’s chief economist Raghuram Rajan about the same complex financial products that would plunge the globe into crisis, little was done to act on those warnings. Rajan was sidelined by the executive board led by Rato and, as the Sunday Morning Herald reported, the banner message was one of continued optimism after more than a decade of benign economic conditions and low macroeconomic volatility:

The Man Who Wasn’t There

When the crisis did finally break, in late 2007, Rato had already resigned from the Fund, citing family reasons. As would happen later with Bankia, he was already well out of the picture when the proverbial effluent hit the fan. Meanwhile, the Fund he had loyally served for three years was once again propelled back into the very heart of the global economy, saved from its pre-crisis near-irrelevance by a tsunami of debt and currency destruction that it had done nothing to forestall – despite the warnings of its own chief economist.

This is not to heap all the blame for the IMF’s inaction on Rato – the Fund had been getting it badly wrong, with disastrous consequences, for decades, without the help of his reverse Midas touch. However, Rato does seem to have an incredible knack at being in the wrong place at the wrong time. To recap, he was economy minister during the nascent years of Spain’s turbo-fuelled property bubble; IMF chief during the run up to the subprime crisis years; and Bankia CEO just before its collapse and subsequent heist of the life savings of thousands of its own depositors / preferentes holders.

As records of failure go, there can be no denying it’s pretty damn impressive — matched only by someone like Tim Geithner who, as president of the Federal Reserve Bank of New York, was responsible for the supervision of Wall Street banks. His reward for allowing these banks to go to the wall: He was made Treasury Secretary.

Is it any surprise that, in a world where many of the biggest, richest and most powerful banks and corporations are deemed too-big-to-fail — for the simple reason that they already have failed! –. a corporate and political culture of rewarding failure has not only taken root but takes precedence above all else?

In this global kleptarchy it matters not a jot how badly the likes of Rato perform; nor how much damage their “mistakes” do to our economies and societies. As long as they serve their masters with loyalty and discretion (are you listening DSK?), they will never be short of money, access or roles to perform. By Don Quijones.

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