海角大神

Corruption allegations of alleged off-the-books payments to high-ranking officials of Spain's governing Popular Party 鈥� including Prime Minister Mariano Rajoy 鈥� are threatening to destabilize the government and damage its ability to steer the country through its economic crisis.

Spain鈥檚 biggest daily, El Pa铆s, Thursday published what it said was a secret, handwritten accounting book kept by the PP鈥檚 former treasurer, the target of a court corruption investigation, that shows donations mostly from some of the country鈥檚 biggest construction barons, and regular payments to top party officials between 1990 and 2008, including 11 years of annual payments of 25,000 euros ($34,000) to Mr. Rajoy.

In total, more than 7.5 million euros ($10.2 million) in donations were allegedly transferred to party officials as undeclared salaries or used to buy suits, ties, and other apparel. The accounting book, of which El Pa铆s published excerpts showing the names of the recipients, also shows cash payments to former party ministers, regional leaders, parliamentary leaders, and perhaps even to former Prime Minister Jos茅 Mar铆a Aznar.

The government and Rajoy have denied any wrongdoing and have blamed the leak on a conspiracy to derail policies meant to put Spain on a path to recover from its worst economic crisis in decades. 鈥淭he PP only keeps a single accounting,鈥� said Mar铆a Dolores de Cospedal, the PP鈥檚 secretary general, herself also allegedly the recipient of cash.

鈥淚t鈥檚 very surprising that just as we are starting to recover [economically], all this information appears. Someone is trying to hurt the PP, the government, and the prime minister,鈥� Ms. Cospedal said during a chaotic press conference Thursday.

The authenticity of the accounting book has not been certified by courts and the former PP treasurer, Luis B谩rcenas, who allegedly kept the book, denied in a statement he ever kept a secret accounting of the PP鈥檚 finances.聽But Attorney General Eduardo Torres-Dulce said Friday that a new investigation over irregular financing of the PP had been opened, and that if necessary he would call Rajoy to testify.

Nor聽could Cospedal and the government explain an admission that seems to confirm the authenticity of the handwritten ledger. The Senate鈥檚 president, Pio Garc铆a Escudero, admitted he indeed received around 30,000 euros that appear in the book, but only as a loan he later paid back. Most others mentioned in the book have denied ever receiving any money from Mr. B谩rcenas.

Cospedal said that the admission doesn鈥檛 validate the rest of alleged payments, and that there is nothing wrong with the PP lending or advancing money to its leaders, as long as they are accounted for in party finances.

Other PP leaders not included in the shadow accounting have distanced themselves from the party and the government and called for a full investigation into the alleged illegal payments. The PP has promised full transparency and Rajoy has already ordered an internal and external audit of party finances, promising to prosecute anyone within the party for any wrongdoing.

Is it illegal?

Spain鈥檚 second-most important daily, El Mundo, with close ties to the PP, has also disclosed details about B谩rcenas' alleged corruption scheme, describing the donations from construction companies as 鈥渃ommissions鈥� for awarding contracts.

The paper also claims B谩rcenas 鈥渉as been threatening the PP鈥檚 leadership with identifying the recipients鈥� of cash payments, and that if the government doesn鈥檛 find a 鈥渟hortcut鈥� for him to avoid prison, he will incriminate those involved. The government has also denied this.

Still, even if the authenticity of the alleged secret accounting book is confirmed, it remains uncertain whether Rajoy or the PP were involved in illegal activity.

The donations themselves are not illegal unless the PP didn鈥檛 report them to tax authorities, in which case the party could be responsible for聽minor聽tax evasion. It鈥檚 also not illegal for the PP to pay party officials, as long as the recipients report the income to tax authorities.

Indeed, from a legal standpoint, courts would have to prove not only that B谩rcenas committed a crime by hiding party finances from the country鈥檚 regulators 鈥� in the process evading taxes 鈥� but also that Rajoy and other top leaders did indeed receive off-the-books payments, and that they were aware of their illegal nature.

To make things worse, B谩rcenas on Wednesday handed the Spanish court investigating him evidence that he benefited from a controversial government fiscal amnesty, reporting 11 million euros in previously undeclared cash, for which he paid only a fraction of what Spaniards regularly pay in taxes. The court also uncovered a 22 million euro secret Swiss bank account B谩rcenas kept.

A damaging affair

Even if Rajoy and the PP can鈥檛 be held legally responsible for any wrongdoing, the ethical and political implications could seriously damage the country鈥檚 stability ahead of a critical year in which the government鈥檚 credibility is as important as its economic policies.

Although the allegations are far from proven, opposition leaders and Spaniards are openly wondering whether the amnesty allowed B谩rcenas and the PP to legitimize their dodgy accounts. More importantly, many say the controversy has exposed how the fiscal amnesty is allowing some of Spain鈥檚 richest people and companies to get away with years of tax evasion, all while the government asks Spaniards to endure draconian austerity measures and tax hikes.

All opposition parties are demanding Rajoy answer publicly to the allegations against him and the PP. Several smaller parties have called on Rajoy to resign and asked for early elections, an unlikely scenario.

An online petition calling for the resignation of Rajoy and his PP-led government has collected more than a聽half聽of its targeted 1 million signatures in just over 24 hours. Spontaneous small protests yesterday and today asked for the same.聽And the revelations come even as Rajoy and PP popularity among voters is plummeting.

Rajoy, who is scheduled to meet German Chancellor Angela Merkel in Berlin on Monday, has called for an extraordinary meeting of the PP鈥檚 leadership Saturday to decide how and when to confront the crisis.聽He will then give his version of the story of the alleged payments, party officials said today.

The government would like to avoid the embarrassment of being pummeled with media questions about the corruption scandal, precisely because Spain鈥檚 ability to plot a path to recovery depends on how much markets, creditors, and other governments 鈥� Germany being arguably most important 鈥� trust Rajoy鈥檚 word.