Saturday, 25 January 2014

Follow the Money


The President of Barcelona Football Club, Sandro Rosell, has resigned his position in a surprise move which will send shockwaves far beyond the world of football.

Because Barcelona is an institution in Catalonia and Spain more generally with its President being elected in a plebiscite involving all the club's active supporters - a popular vote which Sandro Rosell won overwhelmingly in 2010. 

So, this a big political issue as well as dominating the sports news across the whole of Spain with Barcelona identified in many people's minds with the cause of Catalonian independence - having operated down the years as a bulwark against Fascist Spain and its great dictator, General Franco.  

Now the reason for Sandro Rosell's sudden resignation is not completely clear, but the catalyst for him stepping down was a legal challenge brought by a Barcelona fan who claims that the President is responsible for financial irregularities to do with the purchase of the club's latest star player, the Brazilian Neymar.

Quite what these alleged irregularities are is anyone's guess at this stage, but I would be surprised if 'dinero negro' did not play a role somewhere - the 'black money' which is all about avoiding tax and which is so much part of the culture of wider society in Spain.

To be fair, football across Europe seems to have a problem with paying tax with household names (clubs and players) going to great lengths to escape paying their fair share of taxes which pay for things like public services of course - Glasgow Rangers is a good example of a club almost destroyed by this kind of behaviour. 

But in Spain 'dinero negro' is everywhere and underpinned the housing market for years with property sellers declaring only part of the purchase price of a sale, with the balance of anywhere between 10% and 30% being topped up in cash which went undeclared and therefore avoided tax - and all of this was done with the knowledge and connivance of the Spanish legal system. 

So we shall see what happens with Sandro Rosell, but as in the famous Watergate scandal which finally brought down President Richard Nixon the rule in these situations is always to 'follow the money'.

Dinero Negro (12 October 2013)

Spain has been governed by both Conservative and Socialist in the past 15 years, but at long last the problem of  'dinero negro' or black money appears to be getting taken seriously - if this story from the business pages of the Times is an indication of things to come.

If you want to know why the Spanish economy is in such a state - or why the Greek economy is a basket case - the answer is that people don't like paying their taxes and for years the authorities in both countries have turned a blind eye to scandalous practices - which should have been outlawed years ago.  

Marbella property cabal jailed for €3.8bn graft racket

Juan Antonio Roca liked to be called "J.R" after the ruthless character in the television series Dallas National Police Press

By Graham Keeley

A cabal of crooked politicians, former mayors, a footballer, a bullfight impresario, police chiefs and builders were jailed or fined yesterday in Spain’s biggest political corruption scandal.

After a two-year trial, 52 people were sentenced for their part in a €3.8 billion (£3.2 billion) graft scandal at the heart of Marbella town council, which led to the dissolution of the municipal authority in 2006 when it was uncovered.

The court heard that the defendants ran the town on the Costa del Sol like their own fiefdom for 15 years. At the height of Spain’s building boom, the court was told that they were taking multimillion-pound kickbacks for illegal building contracts.

The scandal threatened to have a huge impact on Britons with second homes in the town. The council was immediately dissolved by the Government, posing a question over 30,000 villas, many owned by Britons, but which were deemed to have been built illegally. Thousands faced having their homes demolished as the Government began a crackdown. However, a new council did a deal with developers which spared all but a few flats.

The brains behind the scam was Juan Antonio Roca, 61, a former jobless builder who became head of planning on the council. He was jailed for 11 years, fined €240 million and banned from public office for 34 years for bribery, perverting the course of justice and money laundering.

In 2006, when Roca was arrested, Marbella residents were shocked by the riches he had amassed. He filled a series of houses with stuffed lions and giraffes, left a stable full of starving thoroughbreds and 275 works of art, including a Joan Miró painting that was left to go mouldy in his toilet.

Roca, who liked to be called “J. R.”, after the ruthless character in the television series Dallas, told anyone who questioned his authority: “I am Marbella.”

He set up 70 ghost companies to receive the kickbacks and valued them at €200 million. “The display of wealth has been open and shameless,” Miguel Ángel Torres, for the prosecution, told the court.

At Roca’s side was Julián Muñoz, the former mayor and ex-boyfriend of Isabel Pantoja, a singer. He was jailed for two years and banned from public office for ten years for fraud. He is serving a seven-year jail term for money laundering and bribery. Pantoja was fined €1.5 million for laundering money for him. Marisol Yagüe, who became mayoress after Muñoz, was jailed for seven years and fined €2 million.

The former Atlético Madrid footballer Tomás Reñones, who was assistant mayor, was jailed for four years for fraud. Also convicted was José María González de Caldas, a former president of Seville Football Club and manager of Manolo Benítez, better known as El Cordobés, a famous matador. He was jailed for eight months for bribery. Two police chiefs and a series of builders were jailed or fined. The cabal was created by the former mayor of Marbella, Jesús Gil y Gil, who died in 2004 facing corruption charges.

'Dinero Negro' (10 February 2013)


'Dinero negro' or black money is the talk of the 'steamie' in Spain at the moment - because many leading officials in the Spanish Government's party (the PP or People's Party) - have been accused of accepting payments from a secret slush fund on which they paid no tax. allegedly.

Now at a time when people in Spain - just as in the UK - are 'all in this together' revelations of secret tax free payments - from a Swiss bank account no less - could be enough to bring the the Spanish Prime Minister (Mariano Rajoy) and his government crashing down.

The whole business reads like a script from a Holywoood movie - The Untouchables, if you ask me - because in the Brian de Palma version starring Sean Connery and Kevin Costner - the man who 'does for' Al Capone (played by Robert de Niro) - is an accountant who kept his own set of books which led to his boss's downfall.

So the Mafia mobster was not sent to jail for murder - as everyone knows thanks to The Untouchables - but for fraud and failing to pay his taxes to the US Treasury 

The same thing appears to be happening in the Spanish PP - if these allegations are true.

Because the party's former treasurer - a shady character named Barcenas - is on trial in a separate corruption scandal - and in the course of this legal action certain documents have emerged which seem to implicate the Spanish Prime Minister and his People's Party.

But that's not the really big story - the really big story is that tax evasion is Spain is endemic - so widespread in fact that everybody's at it up to and including the legal profession.

For example, when people buy or sell a property in Spain - there is a declared or official price - and another real price which the buyer actually pays.

The real price is say 100,000 Euros - but the official or declared price may be only   70,000 Euros - with the difference being payed to the seller in cash by the buyer - so that the seller keeps 30% of the sale price but without paying any tax.

And the laugh is that the lawyers - or notaries - who oversee the buying and selling process for both sides in Spain, unlike in the UK - know exactly what's going but conveniently look the other way when the 'dinero negro' cash changes hands.

Now this kind of behaviour would be impossible in the UK - although it is certainly rife in Spain and possibly many other Mediterranean countries as well. 

Just imagine how much tax has been unpaid and deliberately evaded - with all the property building that's gone on in Spain during the last twenty years - the mind boggles.

Yet the thing is it's happened under very government - of the both the left and the right - under the Socialists and Conservatives - and that's a much bigger scandal than the one threatening to engulf the People's Party at the moment.