But will they actually warm a bench in a Spanish prison?
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
The unimaginable just happened in Spain: two former bank CEOs, Miguel Blesa (CEO of Caja Madrid) and Rodrigo Rato (CEO of Bankia) were just awarded prison sentences of six years and four-and-a-half years, respectively, for misappropriation of company funds.
Rato was also Managing Director of the IMF from 2004 to 2007. He was succeeded by another luminary, Dominique Strauss Kahn.
Now, the question on everyone’s mind is will Blesa and Rato actually serve the sentence (more on that later).
Dozens more former Caja Madrid senior executives, most of whom are closely connected to either, or both, of the country’s two main political parties and/or unions also face three to six years in prison. They were found guilty by Spain’s National High Court of misusing company credit cards. Those cards drained money directly from the scarce funds of Caja Madrid, which at the height of Spain’s banking crisis was merged with six other failed savings banks into Bankia, which shortly thereafter collapsed and ended up receiving the biggest bail out in Spanish history, costing taxpayers over €20 billion, to date.
Between 2003 and 2012 Caja Madrid (and its later incarnation, Bankia) paid out over €15 million to its senior management and executive directors through its “tarjeta negra” (black card) scheme. According to accounts released by Spain’s bad bank, FROB, much of that money went on restaurants, cash withdrawals, travel and holidays, and the like.
The amounts – which did not show up on any bank documents, job contracts, or tax returns – may be small, given the magnitude of the misdeeds that led to the Spanish bank fiasco, but it’s the principle that counts.
Only 4 out of 90 Caja Madrid senior managers, executives, and board members had the basic decency to turn down the offer of undeclared expenses. For the rest, it was an offer they could not refuse.
In his last few months at Caja Madrid – just before the whole edifice came crumbling down – Blesa went on a mad spending binge. In one month alone he made purchases on his black card worth €19,000 – more than many Spaniards’ annual salary.
This is a man who pocketed over €20 million in salaries and bonuses while at the helm of the bank that he helped destroy. On his departure in 2010, he was awarded a €2.5 million golden parachute. Yet even after his ouster he, like many other Caja Madrid executives, continued making liberal use of his tarjeta negra.
For Blesa, this will not be his first time behind bars (assuming he is actually sent to prison). He was jailed twice in 2013 and both times was promptly sprung from his cell by Spain’s prosecution service. In fact, the only person upon whom justice was served in the initial case against Blesa was the presiding judge, Elpidio Silva, who was barred from the bench for 17 years for overstepping his limits.
Blesa’s successor as CEO of Caja Madrid/Bankia, Rodrigo Rato, could see his sentence grow in the coming months. He also faces charges of fraud, embezzlement and money laundering. Allegedly he even laundered funds while serving as IMF Managing Director.
While Rato is not solely responsible for the myriad disasters that occurred on his watch, he does seem to have an incredible knack at being in the wrong place at the wrong time, and making lots of money in the process. He was Spain’s economy minister during the nascent years of Spain’s 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 hundreds of thousands of its own retail customers, who were persuaded by branch sales staff to invest their funds in the bank’s high-risk subordinate bonds.
Now, he faces the prospect of hard time behind bars. But will the sentence be served? That is the question people are asking in Spain.
Just last week Iñaki Urdangarín, the husband of the King’s sister, Infanta Cristina, was sentenced to six years in prison for fraudulently obtaining (and spending) millions of euros in public funds in the Nóos case. Today he was told that he can go back to his home in Switzerland where he can stay until all possible appeals are exhausted, which, this being Spain, could take years. He did not even have to post bail.
Will Rato, Blesa and the rest of the Bankia 65 also be able to prepare their appeals from the comfort of their own home? Many of them are so intimately connected to the political and business establishment that it’s almost impossible to imagine them warming a bench in a jail cell. If they are given similar treatment, expect public anger to reach new heights. If, by some miracle, they are sent down, things could be about to get very interesting in the Eurozone’s fourth largest economy, especially with six senior central bankers waiting in the wings to testify about the Bank of Spain’s role in the collapse and subsequent bailout of Bankia. By Don Quijones.
Six central bankers and a financial regulator get dragged to court. Read… The Unthinkable Just Happened in Spain
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Toto….I have a funny feeling we are not in Kansas anymore…..lolol Powerful People will begin to Disappear,trust me on that one..!
If we start putting criminals in jail, who will run everything?
Spain is a country under the corrupt, influences of the Vatican.
There is no shortage of, corrupt, nepotistic, crony criminals, who have yet to be caught, waiting to fill the positions vacated by those, unfortunate enough to be placed in the public spotlight.
This would never happen in the U.S.
They said it would never happen in club med, Italy is next.
If Italy, the home of bent banking, has a true clean up, the US will have no choice.
The US has locked up and barred or restricted, way more inside traders than Europe.
By and large, I think that the Spanish people would prefer to let these rats go free rather than unleash another Civil War, which is what happened the last time they tried to curb the kleptocracy.
Wow, that sounds a lot like an extreme variation of the US argument against prosecuting banskters: It would be baaaad for the ecoonom, so we can’t do it.
I call balderdash on this one.
The Spaniards only hit the tip of the bankster iceberg. What they need to do is emulate Iceland by jailing all of them .. That’s what Iceland’s gov’t. did, arrested and jailed all of them, then reformed the system. Spain’s gov’t. sorely needs to follow suit and reform the system .. otherwise, the financial corruption will never end.
” Spain’s gov’t. sorely needs to follow suit and reform the system .. otherwise,”
The whole Wrotten club-med banking system, is to interconnected with Italy, france, greece, and the vatican, for Spain to reform theirs alone.
Those same Wrotten connection’s, are what turned Cyprus into a bail in sacrificial lamb, as the ECB wanted some free Russian money absorbed into its system. The exposure to greece in cyprus, is what took their banking system under nothing else. The Cypriot bank’s simply could not absorb the write-downs on the greek loans, long-term..
Spain, Portugal, and Italy are still suffering the effects of those greek write-down’s, they are ultimately what forced many of the club-med NPL and other banking issues, to a head.
This Wrotten interconnection is what makes the Club-med problem the massive problem it is.
Whilst France greece and the rest of Club-med are in a Euro with the north, it will be very slow and messy to unravel as the north is not willing to pay for the club-med corruption related losses.
Something Draggi has been trying to dragoon the north into for years.
Iceland took the whole system and drained the swamp before we coined the phrase in the US for the Trump train movement.
We need to do this in the US and any politician standing in the way needs to be voted out and if found guilty of any wrong doing/fraud—sentenced to jail and confiscation of all ill gained assets.
Our world is going through a transition period, a movement of the populace.
Cleaning out the establishment will be a daunting task, they will not go into the night quietly.
If we can change the guard and the system around the world than we need to insure that the new boss is not the same as the old boss—powerful policies, rules of law and strict ethics—with teeth: jail, fines and public shame!!!
Onward towards global justice and country sovereignty!!!
“Onward towards global justice and country sovereignty!!!”
With that objective, your movement is dead before you start, as there will always be States “ireland Etc” willing to abuse sovereignty, for gain.
Could be for the little fish—I was referring to the US and G20—the big fish.
Thanks for the report – I found a surprisingly small echo in the MSM. (FT, Economist, one other source and then Wolf’s blog).
Those 4 Spanish directors should get the highest medal of honor and job offers. All others are loathsome greedy people who deserve to lose their pensions over this.
A deep rooted clean-up would be wonderful.
Let’s hope that these scumbags will do hard time! Hit them where it hurts: in their wallets! (In Germany, a cashier lost her job after 20+ years of service over discarded food or a xx cents for bottles. The judgement for Mme Legarde was a disgrace. Small guys get hanged, the big guys get pardoned?!?
And here in the USA, Jamie Dimon keeps cashing in as CEO of JPMorgan, and Michael Corbat does the same at Citigroup.
Yesterday’s Wall Street On Parade has a report worth reading IMO, “What JPMorgan and Citigroup Have in Common When It Comes To Crime.”
http://www.wallstreetonparade.com
Dimon per Politco is seen at the WH and more and more in DC in particular at restaraunts and venues.
DJT has already referred to Dimon as the best banker.
The Spanish people should protest and blockade the courts if the sentences are commuted or ignored.
Shutting down the judiciary is what really throws a wrench into the workings of government.
Hopefully the legal system will be free from politics influence
MORE than 50 international lawyers are demanding the creation of an International Anti-Corruption Court.
The group from 25 countries, led by top Spanish lawyer Javier Cremades, want the court to deal with global money laundering and terrorist financing.
“We have a problem of political governance. The law creates artificial barriers that harms consumers and that complicates national and international lawsuits,” said Cremades.
Since 2007, the percentage of Spain’s GDP run by the black market is estimated to have grown from 11.2% to up to 22%.
http://www.theolivepress.es/spain-news/2016/11/24/spanish-lawyer-leads-calls-for-international-anti-corruption-court/
All these creeps tie in with the Abengoa
I read the article title & held my breath
Christine Lagarde has finally got her just deserts.
Alas, no.