The law finally catches up with former Castellón cacique Fabra

Bringing the PP baron to court has been like running an obstacle course

MARÍA FABRA Castellón 2 OCT 2013 – 19:23 CET

The trial of former Castellón provincial chief and powerful Popular Party (PP) baron in the region of Valencia, Carlos Fabra, for alleged influence-peddling, bribery and tax fraud began on Wednesday, a decade after the first accusations were lodged against him.

In its written allegations, the popular prosecution in the form of the consumer protection group Unión de Consumidores described Fabra as a “magician in obtaining illegal ends.”

Carlos Fabra leaving the provincial High Court of Castellón on Wednesday. / DOMENECH CASTELLÓ (EFE)

Unlike on other occasions he has appeared in court the 67-year-old Fabra, who faces a jail sentence of up to 13 years and a fine of 1.9 million euros if found guilty, was not accompanied by anyone from his party.

Prosecutors have accused Fabra and his former wife, María Amparo Fernández, of defrauding the Treasury of some 700,000 euros between 1999 and 2003. However, Fabra’s lawyer on Wednesday argued that tax inspectors who handled the case could not be considered as independent expert witnesses as they are administration assistants of the Anti-Corruption Prosecutor’s office.

The public prosecutor also claims Fabra acted as an intermediary for third parties with public administrations and accepted money for doing so.

The three magistrates conducting the trial are the same ones that attempted to have the accusation of taking bribes lodged against Fabra thrown out. Neither the state nor the public prosecutor have questioned their fitness to preside over the trial.

Since the case began in December 2003 — following accusations by a businessman that Fabra had taken bribes to intervene with the Agriculture Ministry to obtain permits — nine judges and four prosecutors have been involved in it. While the investigation proceeded, Fabra continued in his post as Castellón provincial chief, handling public money and presiding over the PP’s affairs in his particular fiefdom.

Part of the public’s money went to build an airport at Castellón, which has never been used as such, with the facilities dominated by a huge statue of Fabra himself. That was just one of several pharaonic monuments to human folly and hubris that marked a boom period in the region fueled by a massive real estate bubble.

During that period no one in the PP demanded that Fabra account for the accusations lodged against him. The head of the PP and now prime minister, Mariano Rajoy, at one point lauded Fabra as an “exemplary citizen.”

Fabra even tried to prevent the distribution of newspapers that had reported on the case and the judge who eventually formalized the accusation against him, Jacobo Pin, felt the need to seek the protection of the General Council of the Judiciary (CGPJ), the legal watchdog, after claiming that the Castellón Provincial High Court, the president of which was a personal friend of Fabra, had tried to put pressure on him to drop the case. Pin’s complaint went all the way to the Supreme Court, who gave the magistrate “total freedom” to proceed with the case.

After the Castellón Provincial High Court in 2010 threw out four of the five tax fraud charges against Fabra because they had exceeded the statute of limitations, it was again the Supreme Court that intervened to over-rule that decision.

Members of Fabra’s family were also included in the investigation after a report found that it had quadrupled its combined wealth in five years, but eventually only his former wife was formally accused. Fabra himself won a major prize in the national lottery no less than four times. One way of laundering illegally obtained money is to purchase winning lottery tickets.

Fabra has denied all the charges against him and at one point defended himself by saying: “I have never personally benefitted from my position as provincial chief of Castellón or as president of the Popular Party in the region. My public duties have never brought me any gain or revenue or than my official remuneration.”

via http://elpais.com/elpais/2013/10/02/inenglish/1380734613_504452.html

New government renegades on campaign tax pledge

Popular Party administration says hikes in personal income and municipal taxes needed to offset blowout in this years budget.

Going back on an election pledge not to raise taxes, the Popular Party government on Friday announced historic widespread 8.9 billion euros in cuts as countermeasures to a bring down an eight percent of GDP deficit for this year – two percentage points higher than the previous Socialist administration had forecast.

Deputy Prime Minister Soraya Sáenz de Santamaría said the across-the board hikes in personal income tax of between 0.75 percent for those on lower incomes and seven percent for those who make more than 300,000 euros annually, will only be in effect for two years.”This is an exceptional move that we didnt foresee,” Sáenz said at a news conference following Fridays Cabinet meeting. “We had to resort to this because the previous government did not comply with its goal in reducing the deficit.”During this years prime ministerial campaign, Mariano Rajoy and other PP officials pledged not to raise taxes, and criticized the Zapateros governments decision in September to introduce a wealth tax for two years. The Socialist administration had forecast that Spain would end the year with a six percent of GDP deficit.Rajoys Cabinet also approved measures to hike the property-value-based municipal tax IBI for the next two years for dwellings that are appraised above the average price. But the PP administration has decided to reinstate the special tax deduction for new home purchases retroactive from 2010 – the same year it was eliminated by the previous Zapatero government – and introduce a super-reduced value-added tax VAT rate of four percent for purchases of a new home.The prime minister is trying to bring Spains debts down to meet a European budget deficit target of 4.4 percent by the end of 2012.At the same time, Sáenz de Santamaría confirmed a previous announcement that there will be hike in pensions based on the consumer price index IPC, and freezes in 2012 on public sector salaries. Government workers will also see their work week extended to 37.5 hours from the current 35 hours per week.The minimum wage will also be frozen at 641.40 euros per month.Political parties and labor organizations will also receive 20 percent less from their annual government subsidies, and Sáenz de Santamaría announced that the government will introduce in Congress next year reforms to political party financing laws.The government has decided to postpone presenting the 2012 budget until March.Besides the deputy prime minister, Rajoys three top government officials in finance and labor – Economy Minister Luis de Guindos, Finance Minister Cristóbal Montoro, and Labor Minister Fátima Bañez – also appeared before reporters to explain the measures.

M. D. – Madrid – 30/12/2011

via New government renegades on campaign tax pledge · ELPAÍS.com in English.

Rajoy’s election win celebrations cut short by sobering tasks ahead

Markets greet PP leader’s sterling victory with massive sell-off; Valencia lender taken over by Bank of Spain as recession looms.
A. S. – Madrid – 21/11/2011
After the joy of a resounding victory in Sunday’s general elections, hours later Popular Party (PP) leader Mariano Rajoy was given a timely warning of the enormity of the task facing him in trying to turn the country’s ailing economy and finances around.
Investors rained on Rajoy’s victory parade by offloading Spanish shares and government bonds, while a leading think-tank predicted the economy would slip back into recession this year.

Also on Monday, the Bank of Spain was obliged to take over the country’s first commercial bank since the crisis broke.

The conservative, pro-business PP won 186 seats in the congressional poll for a comfortable absolute majority of 11. The ruling Socialists garnered 110 seats, while the party with the third highest representation in the lower house was the center-right Catalan nationalist group CiU, with 16 seats. The PP also won a majority in the Senate.

But there was no let-up from the markets. The spread between the benchmark 10-year government bond and the German equivalent was up 23 basis points at 464, while the blue-chip Ibex 35 index closed down 3.48 percent. The rest of the global markets also remained under pressure due to the sovereign debt crisis and concerns about the US economy.

On top of the pasting Spanish assets received in the market, the central bank on Monday decided to take over Banco de Valencia at the lender’s own request because of the delicate state of its solvency and liquidity positions. The management of the bank will be replaced by officials from the state Orderly Bank Restructuring Fund (FROB), which will inject one billion euros to shore up its capital and grant a credit line worth a further two billion euros.

“As from the publication of this decision in the Official State Gazette, the FROB will manage Banco de Valencia with the aim of stabilizing and recapitalizing the institution, thus enabling its subsequent disposal to another bank through a competitive process,” the Bank of Spain said in a statement.

The board of Banco de Valencia earlier Monday had informed the central bank that it was unable to provide a “solution for the future viability of the institution.”

Banco de Valencia, which is the unit of Banco Financiero y de Ahorros – an amalgam of seven savings banks formed earlier this year – accounts for only 0.74 percent of the Spanish banking system’s total assets.

It was the fourth lender to be intervened by the Bank of Spain since 2007 after the savings banks Caja Castilla-La Mancha, Cajasur and Caja de Ahorros del Mediterráneo.

But the key task facing the Rajoy government will be to come up with measures that convince investors that the country can service its debt.

“Rajoy will have no option but to announce a package of extraordinarily tough reforms to convince the markets and his European partners Spain is different from Italy and Greece,” Bloomberg quoted José Antonio Sanahuja, a professor of international relations at Madrid’s Complutense University, as saying.

The PP’s absolute majority will ensure the passage of unpopular measures in parliament. The party also controls most of the country’s regions, which will also enable it to lean on them further to rein in spending in order to meet the government’s deficit reduction targets, which call for the shortfall to be cut to six percent of GDP from 9.2 percent last year and to 4.4 percent in 2012 before bringing it back within the EU ceiling of three percent the following year.

The problem of yet more austerity, however, is the risk of pushing the economy back into recession at a time when over a fifth of the work force is already out of a job. FUNCAS, the think-tank of Spain’s association of savings bank on Monday predicted that is exactly what would happen.

FUNCAS estimated Spain’s GDP would contract by 0.5 percent in 2012, compared with an earlier forecast of growth of one percent. “The prospects with respect to the coming quarters have deteriorated as a result of the severe cuts in spending that will be necessary to carry out if the deficit targets are to be met,” the think-tank said.

FUNCAS also cited slowing global economic growth and the ongoing euro-zone debt crisis as reasons for slashing its growth forecast. It predicted the deficit for this year would come in at 7.5 percent of GDP.

Investors, however, are unlikely to give PP leader Mariano Rajoy much of a honeymoon. “If the markets are to regain confidence (slashing the country risk premium) the key will be how quickly Spain’s new government announces measures and structural reforms that please European authorities and the markets,” brokerage Banesto Bolsa said Monday.

Brokerage M&G Valores said support from the European Central Bank in the form of purchases of Spanish government debt in the secondary market should be enough to maintain bond yields at current levels in anticipation of a new batch of reforms by the incoming administration.

Rajoy has yet to name his Cabinet, particularly the economy minister who faces the challenge of guiding Spain away from that fate of Greece, Ireland and Portugal, the three euro-zone countries that have needed rescuing by the European Union and the IMF. According to Spanish law, the Cabinet cannot be sworn in until December 21.

Frontrunners for the economy portfolio include the PP’s spokesman on economic affairs Cristóbal Montoro, who served as finance minister in the government of former Prime Minister José María Aznar, and Luis de Guindos, who was Aznar’s secretary of state for the economy and is currently a director with consultant PwC.

One of the key tasks of the incoming government will be to draft the budget for 2012, which was not drawn up by the outgoing Socialist administration after the elections were brought forward from March.

Rajoy on Monday chose the former PP congressional spokesperson Soraya Sáenz de Santamaría to head the transition team that will coordinate the handover of power with the Socialists. That raised speculation that she is in line to be named deputy prime minister.

The PP leader said he had had a “very satisfying” conversation with outgoing Prime Minister José Luis Rodríguez Zapatero on the transition and pledged to have a new government in place before Christmas. “In the handover, we’re all going to be very busy,” Rajoy said. “Things are very complicated.”

In the morning the PP leader talked to German Chancellor Angela Merkel on “Spain’s big problems,” German government spokesman Steffen Seibert said.

Via: Rajoy’s election win celebrations cut short by sobering tasks ahead · ELPAÍS.com in English.

Election campaign enters final stretch

Rajoy and Rubalcaba hold big rallies in Valencia, Zaragoza

With less than a week until Spain elects a new government, the two major candidates for prime minister held dueling rallies in Valencia and Zaragoza on Sunday, while the leaders of the minor parties continued to focus on trying to capture the undecided vote.

Socialist Alfredo Pérez Rubalcaba warned supporters in Zaragoza that new governments – especially those of the center-right – do not bring an end to crises. “Changes of government are not the solution,” he said, adding that the country’s economic policies “need to be revised because they are not giving us the results we need right now.”

“We need to formulate our next policies, we need to jump-start the economy. I will go to Brussels to fight and argue, not take notes like Mariano Rajoy will,” he said.

In Valencia, Rajoy was given a rousing welcome at a Popular Party (PP) rally held at the city’s bullring. For the first time, the PP leader expressed his confidence that he will win Sunday’s elections.

“I think that we are going to win the elections. In fact, I believe it and I know it,” he said.

Polls show that the PP may win by as much as 15 percent over the Socialists.

In Madrid, leaders from the Union Progress and Democracy (UPyD) platform called on undecided voters to give them a chance. “These elections are the last opportunity we have to change things in Spain. If we don’t act now, they will come from outside of Spain to change the policies for us,” said Carlos Martínez Gorriarán, the number two on the UPyD slate.

via Election campaign enters final stretch · ELPAÍS.com in English.