Mariano Rajoy, Spanish Premier, Testifies in Graft Trial Involving His Party

https://www.nytimes.com/2017/07/26/world/europe/spain-mariano-rajoy-corruption-trial-witness.html

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LISBON — Prime Minister Mariano Rajoy appeared in court at a political corruption trial on Wednesday, becoming the first sitting head of the Spanish government to take the witness stand in the country’s modern history.

In his testimony, Mr. Rajoy denied that his political party, the conservative Popular Party, had operated a slush fund. The trial underlines how deeply the party remains entangled in financial scandals after years of investigations.

On Wednesday, Mr. Rajoy repeatedly told the national court that he had no knowledge of any wrongdoing by the party or its officials, and that he never had direct responsibility for the party’s finances.

The case, which began eight years ago with allegations that local party officials had taken bribes, later snowballed into several parallel investigations, including one into whether the party’s national treasurer used a slush fund for his own benefit and that of colleagues.

Mr. Rajoy, a politician known for caution and restraint even in the best of circumstances, emphatically denied suggestions that illegal payments had been made from a slush fund, calling them “absolutely false.”

Though Mr. Rajoy is not a defendant in the case and appeared only as a witness, opposition politicians called for him to resign. Pedro Sánchez, leader of the Socialist Party, said that Mr. Rajoy’s court testimony made Wednesday “a black day for democracy,” and asked what kind of example Mr. Rajoy wanted to set for citizens.

Several regional and local officials of the Popular Party have already been convicted or indicted on bribery-related charges. Much of the focus has been on a network of business executives led by Francisco Correa, an entrepreneur who was sentenced to 13 years in prison last February by a regional court in Valencia. Mr. Correa was found to have operated a kickback scheme for obtaining public contracts during Spain’s boom years. The investigation was code-named Gürtel, a German translation of Mr. Correa’s surname (“belt” in English).

Shortly after a former party treasurer, Luis Bárcenas, was found to have amassed about $29 million in secret Swiss bank accounts, the Spanish newspaper El País published what it said were excerpts from party financial records showing that certain party members, including Mr. Rajoy, had received payments above their official salaries, particularly from construction companies.

In 2013, Mr. Rajoy called the slush fund documents “apocryphal,” and he stuck to a similar line on Wednesday. He said he was never informed about any illegal donation made to his party, and that he had “never been in charge of economic matters within the party.”

Even as corruption scandals have swirled around his party, Mr. Rajoy was able to begin a second term in office last October. Two inconclusive general elections have left him leading a minority government. Mr. Rajoy succeeded in obtaining a banking bailout from the European Central Bank during his first term in office, but his parliamentary support is far more fragile now. Still, Spain’s economic recovery has put the country at the forefront of Europe’s growth this year, with unemployment down to under 18 percent from a peak of 27 percent during the financial crisis.

Mr. Rajoy testified on Wednesday as an individual Spanish citizen rather than as head of government. His lawyers tried unsuccessfully to arrange for him to testify by video link rather than in person, citing the demands of his office and concerns over courtroom security. The court did not approve that idea, but did make one concession to Mr. Rajoy’s status, allowing him to sit on the same platform as the judges while testifying, rather than sitting below and facing them.

In a note to investors this week, Antonio Barroso, an analyst at Teneo Intelligence, a consultancy in London, said that Mr. Rajoy’s court appearance would create unwanted headlines but would have little political impact in Spain, in part because the agenda there is now dominated by the issue of Catalan separatism.

The regional Parliament in Catalonia approved legislation on Wednesday to help the region hold a referendum on independence and then put its result into force. Catalan separatists want to hold the referendum on Oct. 1, despite determined opposition from Mr. Rajoy’s government and from the Spanish courts, which view the Catalan referendum as a violation of Spain’s Constitution.