Spanish Judge Crosses Line by Sending Bank CEO to Jail

By Don Quijones, Raging Bull-Shit .

During arguably the biggest financial heist of human history, commonly referred to as the “global financial crisis,” the Spanish magistrate Elpidio Silva is just about the only judge in the Western hemisphere (outside of Iceland’s parallel dimension, of course) to have sent the CEO of a bailed-out too-big-to-fail bank to jail.

In the late spring of 2013, Silva dispatched Miguel Blesa, the former CEO of Caja Madrid (now the rotten rump of Grupo Bankia), to Madrid’s El Soto prison. Not just once, but twice! Blesa was accused of irregularities in Caja Madrid’s purchase of a Florida bank, as well as a 27-million-euro loan he granted to the now-jailed businessman Gerardo Díaz Ferrán. [For more background on the case, click herehere and here].

On both occasions, Blesa was promptly sprung from jail — the first time around by the country’s highly politicised public prosecution (turned defense) service; the second, by the National High Court. After Blesa’s second release, the government went on the counter-attack, pulling out all the stops to protect the good name of the distinguished banker, former People’s Party politician, and close friend and confidante of Spain’s former premier, José María Aznar, whom Silva has accused of using Caja Madrid’s financial channels for his clandestine arms deals.

With the government’s help, Spain’s notoriously sluggish justice system was shifted out of reverse gear — where it almost permanently resides for important white-collar cases — and into fifth. First, Silva was accused of overstepping his limits by ordering Caja Madrid to provide records of all the emails sent and received by Blesa during his time as CEO of the bank – an act that the prosecutors described as “extremely invasive” and a violation of Blesa’s “fundamental rights.”

Silva was then suspended from the Blesa case, which is currently on hold, and accused by Blesa’s legal team of perversion of justice. In the most farcical of judicial turnarounds, it’s now Silva’s turn to warm the defendant’s chair as Blesa testifies against him. If found guilty, Silva faces the prospect of indefinite expulsion from the bench.

Political Theatre, Judicial Farce

Silva’s trial got under way in late April this year. Before the trial had even begun, Silva was refused permission to present most of the evidence he had amassed for his defence — including Blesa’s emails, some of which had already been published by El Diario and which confirmed Blesa’s dubious role at the helm of the bank he would, in El Pais’ words, “lead to the brink of bankruptcy” (read more here).

Like any show trial from the Franco years, the verdict was already a formality. All that was needed was to give the general public the general impression that justice was being served.

Things did not start according to the government’s plan, however, for the simple reason that Silva is a seasoned expert in judicial process and knows all the tricks of the legal trade. Firstly, his lawyer, Cándido Conde-Pumpido Varela, the son of Spain’s former attorney general, resigned in a blatant attempt to stall proceedings. Such tactics are par for the course in Spain, and it’s not unusual for a fairly open-and-shut white-collar crime case to drag on for years as every attempt is made to block the trial’s progress.

This time around, however, the chief magistrate, Arturo Beltrán, was having none of it. “This is a trial, not the theatre,” he barked at the accused and his lawyer.

The reason for Beltrán’s impatience was clear: Silva hopes to stand as a candidate in the upcoming European elections on May 22 for a party that he himself recently founded. The last thing the government needs now is for this recalcitrant judge to start causing it new headaches from Brussels. What’s more, if Silva is voted in as an MEP he will be granted the same parliamentary immunity from the law that is currently enjoyed by over 10,000 Spanish politicians and government workers, thereby making it much more difficult for the government to proceed with its case against him.

To get things moving along, the prosecutors called their main witness, Blesa himself, who took to the stand amidst a flurry of boos and unpublishable insults from a small handful of the hundreds of thousands of victims who had been conned out of their life savings in Caja Madrid’s misselling of preferentes shares. After the judge had evicted and fined the more vocal elements, Blesa launched into a heart-rending testimony about how Silva’s malicious treatment of his case had damaged his personal and family life as well as his “professional prestige”.

Judicial Independence, Spanish Style

However, just when the proceedings seemed to be going according to the government’s script, an online newspaper called Infolibre dropped a bombshell — a report that one of the presiding magistrates of Silva’s trial, María Tardón, had formerly worked as a Madrid councilor for the governing Popular Party. More damning still, she was also revealed to have sat on the shareholder’s assembly of Caja Madrid between 1999 and 2003 — at exactly the same time that Blesa was CEO.

It was a perfect illustration of the state of judicial independence in Spain. When Silva’s lawyer challenged Tardón in court with the allegations, the magistrate refused to step down, arguing that she had never “had anything to do with the running of Caja Madrid” and had never had close relations with Blesa.

By then, however, the damage was done. Silva and his lawyer appealed against her appointment and after some deliberation Madrid’s High Court granted their appeal. Tardón was suspended from the case and even the chief magistrate Arturo Beltran voluntarily stood down.

It was a partial victory for Silva, against all the odds: new magistrates will now have to be found and the trial rescheduled. Tellingly, the court announced that Tardón’s impartiality was in no way undermined by her connections to both the government and Caja Madrid, defending its decision to suspend her on the grounds of “preserving the ‘image’ of justice and the trust that the courts should inspire in the citizenry”.

The problem is that public trust in the judiciary is lower now than at any other point since Spain’s far-from-complete transition from dictatorship to democracy. As César Molinas, a former investment banker and author of the book ¿Que hacer con España? (What To Do With Spain), wrote in a 2012 El País article (in English), public distrust is well merited:

Spain’s political class has colonized areas that are not the preserve of politics, such as the Constitutional Court, the General Council of the Judiciary (the legal watchdog), the Bank of Spain and the CNMV (the market watchdog). Their politicized nature has strangled their independence and deeply delegitimized them, severely deteriorating our political system.

To save their own skin, the chief individuals and institutions of state now seek to scapegoat one of the few judges with the courage to stand up to the shameless impunity of Spain’s political and banking aristocracy. In this topsy-turvy world, it is Blesa who is painted as the victim and Silva the villain. While Blesa enjoys the comfort and luxury afforded by the millions of euros he earned as the CEO of the bank he helped destroy, Silva must fight tooth and nail to save his career and clear his name. By Don Quijones, Raging Bull-Shit


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