Yahoo - AFP, Marianne BARRIAUX, February 23, 2017
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| Former IMF chief Rodrigo Rato was handed a jail sentence of four years and six months for misusing funds when he was the boss of two Spanish banks |
Former IMF
chief Rodrigo Rato was handed a jail sentence of four years and six months
Thursday for misusing funds when he was the boss of two Spanish banks.
Spain's
National Court, which deals with cases of corruption and financial crime, said
Rato had been found guilty of embezzlement when he headed Caja Madrid and
Bankia, at a time when both groups were having difficulties.
The case
caused an outrage in Spain, where it was uncovered at the height of a severe
economic crisis that left many people struggling financially -- made all the
worse because Bankia later had to be nationalised.
Rato, who
is also a former Spanish economy minister, remains at liberty pending a
possible appeal.
He was on
trial with 64 other former executives and board members at both banks accused
of misusing 12 million euros ($12.7 million) between 2003 and 2012.
They were
accused of having paid for personal expenses with credit cards put at their
disposal by both Caja Madrid and Bankia, without ever justifying them or
declaring them to tax authorities.
These
expenses included petrol for their cars, supermarket shopping, pricey holidays,
luxury bags or parties in nightclubs.
'Corrupt
system'
According
to the indictment, Rato maintained the "corrupt system" established
by his predecessor Miguel Blesa when he took the reins of Caja Madrid in 2010.
He then
replicated the system when he took charge of Bankia, a group born in 2011 out
of the merger of Caja Madrid with six other savings banks, prosecutors said.
Blesa was
sentenced to six years in jail.
Rato, 67,
had always denied any wrongdoing and said the credit cards were for discretionary
spending as part of executives' pay deal.
He told
court last October that everything "was completely legal".
Rato will
not necessarily go directly to jail if he appeals the ruling, just like the
Spanish king's brother-in-law Inaki Urdangarin who has been left free without
posting bail following his sentence of six years and three months for syphoning
off millions of euros.
Urdangarin's
temporary reprieve pending his appeal, also announced on Thursday, made waves
in Spain where people have long criticised what is perceived as the impunity of
the elite.
 |
Spain's
National Court said former IMF chief Rodrigo Rato had been found
guilty of
embezzlement when he headed up Caja Madrid and Bankia, at a time
when both
groups were having difficulties
|
IMF
chiefs in the dock
Rato was
economy minister and deputy prime minister in the conservative government of
Jose Maria Aznar from 1996 to 2004, before going on to head up the
International Monetary Fund until 2007.
His
subsequent career as a banker in Spain was short-lived -- from 2010 to 2012 --
but apart from the case of the undeclared credit cards, it also led to another
banking scandal considered the country's biggest ever.
Thousands
of small-scale investors lost their money after they were persuaded to convert
their savings to shares ahead of the flotation of Bankia in 2011, with Rato at
the reins.
Less than a
year later, he resigned as it became known that Bankia was in dire straits.
The state
injected billions of euros but faced with the scale of Bankia's losses and
trouble in other banks, it asked the European Union for a bailout for the
entire banking sector and eventually received 41 billion euros.
Rato and
others were put under investigation, accused of misleading small investors in
the listing knowing the state of Bankia, which has since paid out 1.2 billion
euros in compensation.
He is the
third former IMF chief to get into trouble with the law.
His
successor Dominique Strauss-Kahn was tried in 2015 on pimping charges in a
lurid sex scandal, and was acquitted.
And
Christine Lagarde, who took over from Strauss-Kahn and is the current IMF
chief, was found guilty of negligence over a massive state payout to a tycoon
when she was French finance minister, though she received no penalty.
Others were
also sentenced Thursday in the case involving Rato.
Among them
Francisco Baquero Noriega, a unionist once on the board of Caja Madrid who was
sentenced to three years and two months in jail.
Rafael
Spottorno, the former head of the royal household, was given two years' prison
while Francisco Javier Lopez Madrid, a friend of the royals', was handed six
months.
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