Corruption in Spain: Brussels investigates possible misappropriation of European funds for Rajoy’s election campaigns

Catalan MonitorNews Roundup

Photo – Acuamed HQ in Madrid

By Antoine Gasquez
November 7, 2017

The European Anti-Fraud Office (OLAF) has asked the Spanish National Court for information on possible misappropriation of European funds (El Pais, 3 November). The request concerns public contracts of the Autonomous Community of Madrid which are the subject of investigation in the Punica case. OLAF’s application concerns the awarding of public contracts in 2006 by the Imade Institute, the development agency for Madrid, which were won by the company Over Marketing, a company suspected of having fueled the now infamous “Caja B” (Box B) slush fund of the Partido Popular [the subject of a years long investigation which continues today].

According to a repentant entrepreneur in the Punica case, a case investigating corruption in public deals on a massive scale, recently heard by the Spanish judges, the deal awarded by Imade, to Over Marketing, was meant to finance campaigns to promote local SMEs and therefore help job creation, which is why European co-financing was requested and awarded.

This contract is being investigated in the Punica case. The boss of Over Marketing, Daniel Horacio Mercado has already been indicted for his alleged contributions to the aforementioned PP slush fund. Mercado has already admitted his participation in another case of corruption and fraud, relating to Palma Arena. When the Central Operational Unit, the UCO, the department of the Civil Guard responsible for public corruption cases, asked the community of Madrid for the contracts relating to the Imade contracts, it responded that these files had been misplaced. The investigators have evidence that around 2006 and 2007, during an election year, various Mercado companies had received multi-million-euro contracts from the community of Madrid, led by the PP. For the judge, according to the newspaper El Pais, “these contract awards were used to hide payments to fund campaign actions of the Partido Popular with public money” – therefore including European funds.

But this is not the only case of European embezzlement in Spain currently on OLAF radar.

The agency has also made requests for information regarding the use of European funds in the Acuamed case. This public company specialized in the management and distribution of water and, linked to the Partido Popular government, ran many public works projects. Works financed for more than 821 million euros by Europe between 2000 and 2013. One of these projects concerns the Bajo Almanzaro desalination project in Andalusia, which generated, according to the investigating judge, an “inappropriate compensation” of 40 million euros, and involved senior officials of the Spanish Ministry of Agriculture. This project received 22.7 million euros from ERDF funds.

Other projects of the same type having obtained significant European funding, such as that of Rambla Gallinera in Valencia, which received €25 million in European Community funds, or that of the desalination plant in Torrevieja (Alicante), which received €29.5 million European aid are also subject to instructions from the Spanish courts. In the Acuamed case educated in 48 people have already been indicted. The name of the Partido Popular former Spanish Minister of Agriculture and current European Commissioner, Miguel Arrias Canete, appears repeatedly in the investigation file according to the Spanish press.

Federico Ramos, chairman of Acuamed’s board of directors before being appointed undersecretary of the Rajoy government presidency and right-hand of vice president Soraya Saenz de Santamaria, was forced to step down in January. He chaired Acuamed when the fraudulent deals began to be detected by the Spanish anti-corruption services.

Recall that the extra cost of corruption on public markets in Spain, mainly related to the Partido Popular de Rajoy is estimated at 45 billion euros per year according to the National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia – CNMC).


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