Former IMF chief Rodrigo Rato heckled at start of corruption trial
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Version 0 of 1. The former International Monetary Fund chief Rodrigo Rato has been heckled as he arrived to stand trial for allegedly misusing corporate credit cards while in charge of two leading Spanish banks. Rato, a former Spanish economy minister and deputy prime minister, is accused of presiding over a corrupt system that allowed him and other executives to misuse funds when he was the boss of Caja Madrid and Bankia. He is on trial with 64 other former executives and board members at the banks, whose near-collapse sparked an EU bailout of Spain’s financial sector. Rato, 67, and the other executives are accused of having paid for hotels, parties and luxury shopping with so-called “black credit cards” put at their disposal by both Caja Madrid and Bankia, without justifying them or declaring them to tax authorities. They are alleged to have spent a total of €12m (£10.5m) between 2003 and 2012, sometimes splashing out at the height of Spain’s devastating economic crisis. Thousands of small-scale investors lost their money after they were persuaded to convert their savings to shares before the flotation of Bankia in 2011, with Rato at the helm. Less than a year later, he resigned as it became known Bankia was in dire straits. The state injected billions of euros, but faced with the scale of Bankia’s losses and trouble at other banks, it asked the EU for a bailout for the entire banking sector and eventually received €41bn. Rato, who led the IMF from 2004 to 2007 and was a key figure in the conservative People’s party (PP), was greeted with cries of “thief”, “fraud” and “thugs” as the trial began in San Fernando de Henares, part of greater Madrid. Antonio Hernández, 65, a retired driver, was one of those who shouted at Rato and other defendants, claiming they had ruined the lives of thousands of small savers and shareholders like him. According to the indictment, Rato maintained the corrupt system established by his predecessor Miguel Blesa when he took the reins at Caja Madrid in 2010. It is alleged that he replicated the system when he took charge of Bankia, a group born in 2011 out of the merger of Caja Madrid with six other savings banks. Prosecutors are seeking a prison sentence of four-and-a-half years and a €2.6m fine. Rato has denied any wrongdoing and said the credit cards were for discretionary spending as part of the pay deal for executives. The case is the one of a series of scandals dogging the caretaker administration of the PP leader, Mariano Rajoy, as the party struggles to break the political impasse that has left Spain without a government since December. Despite corruption allegations involving the PP’s former treasurer, Luis Bárcenas, and Rita Barberá, its former mayor of Valencia, the party has outperformed its rivals in the polls. It failed to secure a majority in the general elections held in December and June, but finished first in both polls and increased its seat count in the latter. It also won a resounding victory in Galicia’s regional election on Sunday night. |