Rato rejects the charges against him./ Photo: CB/La Razón.
Miguel Cifuentes. Madrid
The former Spanish Vice-President risks going to prison if he is sentenced with more than two years for the numerous crimes for which he is being investigated by a Madrid court. He faces jail terms of up to six years as well as hefty fines.
Penal experts consulted by The Diplomat have stated that “all the crimes he is being investigated for are very serious, money laundering is punishable by six months to a year and fines of up to three times the quantity laundered, asset stripping brings with it from one to four years in jail, and tax fraud jail time of up to six years”.
However, it plays in his favour that “economic crimes are very hard to prove. Judges have very little economic training, and they request exhaustive evidence of a crime in order to sentence. Many crimes are concealed in commercial transactions, in fiduciary companies, dummy corporations, or in manipulated accounts and balances. Cooperation from tax havens is also needed, and they don’t give information, or they give it late and badly”. All this is in Rato’s favour, in a process that looks to be long, possibly years, with a number of delays and procedural incidents, thanks to the excellent lawyers that defend the former Minister for Economy and Taxation.
Rato hired Oliva y Ayala, a law firm which specialises in economic crimes. The partners are Horacio Oliva and Ignacio Ayala, both professors in criminal law at the Universidad Complutense de Madrid, who have been present at many trials on economic crimes and have long proven experience in court.
Sources close to Rato’s defence team point out that the crimes he stands accused of do not exist, and they are doubtful that anything can be tied back to him. At most, they admit some tax adjustment, but nothing with any criminal relevance. The Tax office accuses him of five tax crimes, and would include in this his operations with currency and his receipt of fees while he was director Lazard investment bank, in Spain. He would have derived these charged through his businesses and in doing so have violated Spanish IRPF law.
Investigation into the former Spanish Vice-President is not linked to any political operation
Both the Tax Office and SEPBLAC (body, dependent of the Ministry of Economy, which fights asset laundering) confirm that “the investigation into Mr. Rato stems from the discovery of traces of crimes after looking into his tax regulation and contrasting it with his goods declarations abroad. The investigation currently under way affects 715 people in a similar situation”. They reject any political operation surrounding the fomer Spanish Vice-President. His scandalous arrest, with media recording live, is “pure coincidence”, given that no one, officially, leaked the information from the operation or called the media outlets.
Sources from within the Tax Office confirmed to The Diplomat “that Mr. Rato has been investigated for over a year in order to verify his actions through his business, family and personal networks. As a consequence of this, evidence of criminal offences have been accredited, which has led to his accusation before SEPBLAC and before a Madrid court”.
At the moment, the investigation is awaiting a decision on which is the competent court to carry on with the procedure. The Judge of the Penal no. 31, Madrid, stepped down from the case in favour of the National Court, which already accusing Rato in the Bankia and “black cards” cases, under the understanding that the cases were related. The National Prosecutors Office has challenged the stepping down, in order to make the case be returned to Court 31, arguing that it would be the natural place for it to be prosecuted. This conflict could take one or two months to be resolved. Some media sources claim that the National Court, encouraged by the Government, would have filed the recourse in order to delay the process, allow for the May elections to be carried out, and for the process to begin again once these are over.