Madrid, Spain – Spain’s Socialist Workers’ Party has become embroiled in one of the biggest corruption cases in the country’s history, which could yet damage the acting government’s ability to return to power.
Two former Socialist Party ministers were among 19 leading party officials who were convicted by a court of distributing 680 million euro ($750m) in public funds to other party officials and related persons, despite the money being earmarked to help the unemployed and companies in trouble in Andalusia, one of Spain’s poorest regions.
Manuel Chaves Gonzalez and Jose Antonio Grinan, two former presidents of the Regional Government of Andalusia, were among those convicted. Both men also served as ministers under former socialist Prime Minister Felipe Gonzalez during the 1990s.
Grinan was found guilty of embezzlement and misappropriation of public funds and jailed for six years and banned from public office for 15 years.
Gonzalez was convicted of maladministration and was banned from public office for nine years.
The verdicts were delivered as acting Prime Minister Pedro Sanchez attempts to secure enough support from other parties to form a fragile new government.
Sanchez’s Socialist Party won the fourth election in as many years on November 10, but once again fell short of an absolute majority of 176 seats in the 350-seat parliament.
Two days after the election, the Socialist Party leader announced a preliminary coalition government with the far-left Podemos party, but they will still need the support of smaller parties to be able to govern.
Analysts said the Andalusian corruption case could damage the image of the Socialist Party in the public eye, but may not prevent smaller parties from helping Sanchez return to power.
The socialist prime minister was elevated to the country’s helm in June 2018 after tabling an unprecedented parliamentary no-confidence motion which overthrew the previous Popular Party (PP) government after a corruption case over kick-backs led to long jail terms for senior members of the conservative PP.
The “ERE” scandal broke in 2010 at the height of Spain’s financial crisis as socialist then-Prime Minister Jose Luis Zapatero was introducing a range of austerity measures that included cuts to civil servants’ wages.
In a trial which started in December 2017 and lasted a year, prosecutors alleged that over a decade, members of the Andalusian regional government diverted 680 million euros ($752m) in public funds.
Prosecutors said the cash was discreetly passed on to people and businesses, often with close ties to the Socialist Party, some of whom were not affected by job cuts.
The court heard that there was an “absolute lack of control” in the management of the funds.
The affair forced Grinan to resign as head of the regional government of Andalusia, but during the trial, both he and Gonzalez denied any fraud.
The conviction of two high-profile Socialist Party members has provided ammunition for PP against Sanchez.
“The problem today is Pedro Sanchez. He should assume political responsibility,” said Teodoro Garcia Egea, the PP secretary-general.
The PP claimed the case shows the socialists resorted to cronyism, using taxpayers’ money to reward supporters with jobs and benefits in a bid to maintain their control over the region.
Xavier Arbos, professor of constitutional law at the University of Barcelona, said the scandal would damage the socialists in the public eye – but not as much as the corruption case which brought down the PP government.
“The crucial thing is the reaction of other parties. So far, it does not seem this will stop Podemos forming a coalition with the socialists,” he said.
Spain has seen repeated corruption scandals in recent years that have exposed politicians, trade unions, bankers, footballers and even King Felipe VI’s brother-in-law, who was jailed for five-and-a-half years for embezzlement.
A Socialist Party spokesperson said the party was not making any comment at this stage.