Sweeping corruption probe in southern Spain delivers first convictions

A court in the southern Spanish region of Andalusia has found two former regional premiers guilty of corruption-related crimes in a far-reaching scandal involving the Socialist Party (PSOE) that is known as the ¡°ERE case.¡±

Named after the Spanish term for a collective dismissal procedure (expediente de regulaci¨®n de empleo, or ERE), the probe involves allegations of illicit payouts from a fund set up by the regional government to help struggling firms make severance payments to laid-off workers. Approved by the regional parliament year after year as part of the annual budget, the system allegedly enabled the fraudulent scheme to avoid oversight by the internal audit office.

The case became so large and unwieldy that it was broken up into 146 separate probes

Jos¨¦ Antonio Gri?¨¢n, who served as the PSOE¡¯s regional premier in Andalusia between 2009 and 2013, has been given six years in jail for his role in the case, while his predecessor, Manuel Chaves, also of the PSOE and who was in power between 1990 and 2009, has been barred from public office for nine years.

What¡¯s more, former government minister and ex-regional economic chief Magdalena ?lvarez, as well as another former regional minister, Gaspar Zarr¨ªas, have also been barred from public office for nine years.

Gri?¨¢n, Chaves, ?lvarez and Zarr¨ªas have all been convicted of the offense of prevaricaci¨®n, which, under Spanish law, is when a public official abuses their power by knowingly making an unfair decision. Gri?¨¢n was also found guilty of misuse of funds.

As well as Gri?¨¢n, another four ex-regional ministers have received prison terms: Antonio Fern¨¢ndez (Employment) and Jos¨¦ Antonio Viera (Labor), Francisco Vallejo (Innovation) and Carmen Mart¨ªnez-Aguayo (Finance). The highest sentence went to Fern¨¢ndez, who has received a seven-year, 11-month jail term. Vallejo and Viera have been handed down seven years, and Mart¨ªnez-Aguayo six.

Of the 21 defendants in the case, just two have been acquitted of all offenses: the regional government¡¯s former comptroller, Manuel G¨®mez, and the head of legal services, Francisco del R¨ªo.

The probe has focused on a €680-million government fund that was used to make payments between 2000 and 2009. The scandal has affected top former regional officials from the Socialist Party (PSOE), which was in power for 36 years until December 2018, when it was ousted by a right-wing coalition following regional elections.

With 507 people under scrutiny for nine years by as many as seven investigating judges, the case became so large and unwieldy that it was broken up into 146 separate probes. On Tuesday, a panel of three judges at the Seville Provincial Court handed down a decision in the main case that will serve as a guideline for the remaining probes.

There was a network of patronage involving hundreds of entrepreneurs, insurance companies, lawyers and more

This main case targeted former regional premiers Manuel Chaves and Jos¨¦ Antonio Gri?¨¢n, as well as six former department chiefs and 13 other former high-ranking officials from the Andalusian government.

¡°The worst part is that none of the 21 accused have any sense of having committed any crimes,¡± said one of the lawyers shortly before the ruling was made public.

The trial has taken up an entire year, divided into 152 court sessions described as ¡°never-ending¡± by both the defense and the prosecution. The ruling runs to around 1,800 pages, making it similar in scope to the verdict in the G¨¹rtel corruption case, which involved the conservative Popular Party (1,687 pages), and more than triple the space taken up by the Supreme Court ruling on the Catalan secession bid (493 pages).

The court considers both former regional premiers and the ex-ministers to be responsible for the system of public funds, as well as finding that Gri?¨¢n ¨C during his time as regional economy chief ¨C was aware of reports from the Comptroller General¡¯s office that criticized the irregular subsidies, but did nothing in response.

Defense lawyers involved in the case have already announced that they will appeal the ruling at Spain¡¯s Supreme Court, which will have the last word. None of the defendants sentenced today will see the inside of a prison cell until that top court has concluded its trial.

Money for cocaine

The scandal began a decade ago, when the Seville food wholesaler Mercasevilla underwent an ERE collective dismissal procedure. The police discovered that a few individuals had received early retirement payments from the government fund despite not having worked for the company.

Their investigation uncovered a complex system set up within the Andalusian government to channel early retirement funds to friends of the director general of the labor department, to mayors and to high-ranking PSOE officials.

Over the years, the list of potential crimes and irregularities grew to fill two million pages. The probe was initially led by Judge Mercedes Alaya in cooperation with the Civil Guard and anti-corruption prosecutors.

The probe turned up public funds that had been spent on cocaine by ex-employment chief Javier Guerrero and his driver. There was also a web of ghost companies and a network of patronage involving hundreds of entrepreneurs, insurance companies, lawyers and more.

Sources involved in the case note that 85% of the money in the fund was used for legitimate purposes, chiefly early retirement payments for more than 6,000 employees. ¡°The heavy-handed headlines about the biggest corruption case in democracy have acted like a steady drizzle that has had an effect, even though they are based on prejudice,¡± said one lawyer who requested anonymity.

Political ramifications

The ruling in the main probe of the ERE case, which has been used by the PP to counter accusations of corruption over its own G¨¹rtel scandal, comes as Spain¡¯s political parties attempt to forge agreements that will allow the formation of a government following the repeat election of November 10.

The chief justice of Andalusia¡¯s regional High Court, Lorenzo del R¨ªo, on Thursday denied allegations that the decision was held back until after the election to avoid hurting the PSOE. ¡°It is not true that it was deliberately delayed, it¡¯s only now that the drafting of the ruling is being completed,¡± he said, calling it ¡°one of the most complicated [rulings] in Spain¡¯s judicial history.¡±

Besides the prison terms and other penalties for the defendants, the effects of the ERE case are also symbolic, since Manuel Chaves and Jos¨¦ Antonio Gri?¨¢n presided Andalusia for 23 out of the 36 years that the PSOE governed the region uninterruptedly.

¡°The ERE case has been like a stone weighing heavily on Andalusia,¡± said Juan Mar¨ªn, the Andalusian leader of the center-right party Ciudadanos. ¡°It¡¯s done a lot of damage. And those responsible are all with the PSOE.¡±

El¨ªas Bendodo, a department chief with the PP, said that ¡°an era is ending in Andalusia: there¡¯s going to be a before and an after.¡±

¡°The damage is done, this ruling will not fix what¡¯s broken,¡± added Teresa Rodr¨ªguez, of the leftist Adelante Andaluc¨ªa. ¡°There is a lack of trust that will not be restored for decades.¡±

English version by Susana Urra and Simon Hunter.