Corruption's Price: A Spanish Deceit

by Charles Brett

  Meanwhile, Juez Garibey was exultant. He knew that ServiArquitectos was on the proverbial ropes, and he had not even had to bring the additional details that Pedro's researches were revealing, that the ServiArquitectos slush fund might have been as much as ten times larger than what ORS had been looking to recover.

  Thursday: Moncloa, Madrid

  Juan Pastor Nieves paced his office. He was perplexed. For the third time in as many hours he had received calls from well-regarded Partido Conservador members seeking his help in squashing the enquiries of this Juez Garibey. Moments earlier the most recent had come from a member of his inner circle, someone he had trusted for at least two decades. What they had in common was feeling threatened by the enquiries of an official all seemed to regard as a madman.

  Yet, of all the calls, it was an earlier one from Adoración Carbajal that had made the most impact. They had worked together for years, he on the party's inside, she from the outside, providing each other with support and encouragement. In fact, he recalled her company had done much of the work to overhaul the Partido Conservador headquarters. That had become expensive after the discovery of asbestos but ServiArquitectos came through without charging more, though how the company had managed this with no extra invoicing he was never quite sure, and never asked.

  The result was a gleaming modern electronic election campaign centre with which to impress the party faithful. Not that it had proved much use in the most recent elections. La crisis had shaped shock results in which both the PC and la Piz had lost ground to independents and alternative parties and had thus been forced into a grand coalition if only to hold onto sufficient power to provide the 'jobs-for-the-boys' that were paid for by the state. The results were no vindication for all that fancy technology.

  The consequent coalition of left and right had started well. It became even better when that left wing firebrand, Hernando Torres, had been good enough to drop dead in South America. Pastor Nieves recalled hearing the news at breakfast on the radio and how he'd smiled at his destiny.

  He already possessed the leadership of the PC. At that moment he was certain he would gain the post of el Presidente del Gobierno. So it had proved.

  The only fly before arriving in Moncloa was the presence of Isidoro Silvestre. Pastor Nieves couldn't stand the man before, and even less afterwards. Silvestre had even had the nerve to protest about kicking out Hernando Cortes' widow and children from their home mere days after his funeral.

  But he, Juan Pastor Nieves, who had scrabbled so long to attain this position, had been in no mood for sentimentality. He insisted they had to make way for him yet he had judged it safer to keep Silvestre in place, gradually neutering him. Doing so quietened the voices of the la Piz who rightly feared he was going to diminish its influence as soon as possible. Better to have your enemies close than distant, and all that.

  Pastor Nieves did not think of himself as an unpleasant man, though there were many in the la Piz and even the PC who privately would tell of his ruthlessness as well as chill personality. He knew his wife supported him and that was all he cared.

  They were childless, which had caused problems for them both in her thirties, but she had eventually accepted their fate. In place she had virtually adopted a distant relative's orphaned son and continued to dote on him. Pastor Nieves was not fond of the boy, now a man. But he had proved on occasion rather practical in assisting the pursuit of Pastor Nieves' own political ascension.

  Another call came, this time from his wife who was away from Madrid up north in Huesca for a medical managers' meeting. By coincidence she wanted to talk about her adopted son. Apparently he was going to have to appear next week before this same Garibey. Would her darling husband please do something about arranging to have her son's citation cancelled?

  Pastor Nieves gasped. "Why does everybody think I can rearrange the judiciary's agenda at a day's notice?"

  In fact this was more or less the same as what Adoración had asked, except she had already been in front of Garibey.

  "But you are el Presidente del Gobierno. Your predecessors did it. Why can't you?"

  It was a telling jab which went right to the heart of Juan Pastor Nieves' ambitions and self-importance. He was the most important person in Spain, after His Majesty of course, and arguably more important because he was elected rather than the inheritor of a decrepit title the authenticity of which had been dubious at best in the twentieth century and was more so in the twenty-first.

  His thoughts took a new direction. How much better it would be if he, Juan Pastor Nieves, was Presidente de España, Jefe de Estado, in common with the Presidents of France or the United States. He permitted himself the luxury of imagining what it would be like to be Head of State.

  He shook himself. His wife had pricked his need to be seen to be executive. She was rather good at this, as he was only too ruefully aware.

  Damn! This meant he would have to talk with the unspeakable Silvestre. He didn't want to on a matter such as this, because it would mean asking Silvestre for help that in turn would reaffirm Silvestre's position as Jefe de Gabinete, the last outcome he desired as he intrigued to render Silvestre little more than a tamed puppet.

  Picking up the internal phone he requested Silvestre attend him. He liked the sound of that word 'attend'. It possessed connotations of power that pleased him.

  Silvestre entered. The Prime Minister described what he wanted. Silvestre declined to help, pointing out in calm tones that not only did he, Silvestre, not have the authority to do as the prime minister was describing but also suggesting that it might be better to wait.

  "It might be better to wait?" Inside Pastor Nieves screamed with rage. Was Silvestre playing with him? This, after all, was the very same tactic he himself had used time and time again on Silvestre, and most other events if he was honest, to justify sidestepping decisions or acting.

  The cheek of the man! He decided to manifest himself at his most prime ministerial. Silvestre would not be able to resist. "Kindly execute what I have just ordered you to carry out."

  To Pastor Nieves' astonishment Silvestre did not cower or run to do as instructed. Instead Pastor Nieves heard words uttered with a coldness that was utterly unfamiliar.

  "Prime Minister, you're asking me to interfere with the legal system. Others may have done this in the past for your predecessors. I will not. I advise you not to pursue this. If you persist you will have my resignation in writing for tomorrow morning. I'll stay, of course, in my post until you appoint my successor."

  Isidoro hesitated, before deciding not say more. He turned to leave, thereby depriving himself of the singular pleasure of seeing Juan Pastor Nieves, el Presidente del Gobierno, gasping in disbelief and resembling a beached whale.

  Friday: Madrid

  Rafael Garibey had gone out early, mildly disguised, to buy the newspapers. In retrospect he was glad he used his long coat and a hat. A mass of photographers was outside his front door. He beat a hasty retreat upstairs before they realised it was him on his way to the front door.

  He cajoled his wife to do his dirty work. She agreed, though unhappily. She was not in a fit state to be snapped for ¡Hola! she groused.

  She was lucky. The horde didn't recognise her and she made it back, armed with El País, El Mundo, ABC and a couple of others for good measure. Just buying them she was astonished at the front page publicity generated by her husband. This was not what she anticipated in the twilight of his long career.

  Safely back in their piso she handed over the copies and said in a tart tone, "Your fame is carved in paper. By the way, I would ask for an escort to the Sala in future, not only to penetrate the paparazzi, but also to protect you from the neighbour from hell downstairs. You might even think to ask for police on the front door."

  Rafa Garibey winced, "What a combination! But it's a good idea. Will you make some coffee while I call?"

  "Only if I can look at the papers as well."

  He assented before making contact with P
edro and explaining his problem. Pedro assured him that there would be no difficulties.

  Back in the kitchen he found his wife incredulous.

  "I haven't really been paying attention." She made a face of slight contrition. "Have you really skewered that pious prig, the Cardinal Archbishop and Fajando of Opus as well?"

  "The pious prig, yes. Opus no, but its secular head, yes."

  "Did you enjoy it?"

  Rafa Garibey looked around as if magic ears might be listening before saying in a mock whisper, "I'll tell only you this, but yes, hugely."

  "Good for you! It could not have happened to a nicer pair." She brushed back greying hair. "So yesterday was big business?"

  Rafa Garibey gave her a short summary and ended by recounting the questioning of ServiArquitectos. If anything, his wife was even more pleased.

  "I am so happy. That company is so distasteful in the way it consistently mistreats its people whom it does not have the courage to pay as employees. Remember Jesús and the way he was abused."

  "Yes, but that didn't sway me."

  "I know you. Keep finding different mechanisms to make them suffer." She rubbed her hands in glee. "So what do you have next?"

  "That would be telling. I shouldn't be confirming any of what you're asking but I see the papers have pretty much accurate transcripts of what went on during the past days. I never know how they do it. My enquiries are supposed to be confidential, yet within twenty-four hours they're public knowledge. I guess the same would happen today if I hadn't postponed the next hearing to Tuesday. If all goes as I expect, one overly-proud and distasteful persona is going to resemble a stuck balloon."

  The image appealed to him. By reputation he really did not care for his witness on Tuesday.

  "What else do the papers say?"

  "The general essence is that you seem to have found some fount of hard evidence, of a type which has always been missing before."

  "That's pretty shrewd. They don't say what?"

  "No. My next impression is they seem convinced you've more up your sleeve that you're not disclosing. They're speculating about politicians, especially ones who've worked in business at some time. The chattering is all about who's next.

  "My last impression is that the left is delighted, even if its own are to fall beneath your headlights. The right, on the other hand, is incensed that any of theirs could even be implicated. This is all packaged up, in their case, with turgid condemnations of what you accomplished with the pious prig and Opus, as if linking themselves with all things allegedly holy might insulate or even excuse any possible fault."

  Rafa Garibey always enjoyed his wife's acerbic turns of phrase. She filled him with happiness. He was not nervous about next week but not as calm as the previous days. He did not know exactly why. Instinct? Fear of a confrontation? He would have to wait and see.

  Much would depend on Pedro and his people.

  Sunday: Madrid

  Pedro returned to the room where he had been debriefing Emilia and Caterina. He had brought Ana and Davide along, the first time that they all been together in over a week. Caterina inspected Davide closely before turning her attention towards Ana.

  In contrast, Emilia focused on Ana alone. From what she could see there was a difference. She was not sure what it was about Ana but definitely there was a change.

  Well, one aspect was how she appeared. It was more mature in some indefinable way. The clothes were the same, smart and fashionable. The hair was almost the same, perhaps a little less spiky. Could it be the make-up? Possibly. It was more subdued than previously, but that might only be accidental.

  She would have to wait for her instincts to catch up. Emilia had great confidence in those instincts: look where they had gotten her.

  Pedro confirmed that on Thursday he had reached Juez Garibey who had postponed the next hearing to Tuesday in order to create additional time for their work. After speaking to the Juez yesterday evening he indicated the Juez was delighted with what Caterina and Emilia had traced, though he had also said he was not quite sure how to use it.

  "How did you find what you did, Emilia? Will you explain again?"

  Emilia started with Caja Santiago. Apparently it had bothered her sufficiently to ask Caterina to do some deeper research. What Caterina discovered was that this Caja had been a minor twenty-branch outfit based in some of the mountain and seaside towns of Asturias with one outlier branch in Huesca in Aragón. Strangely it had been run by priests after being originally set up in the nineteenth century by a pious believer who left a large bequest to five parishes to lend to the needy. Those parish priests became the initial managers and they proved rather able.

  In effect the Caja was a typical small savings and loan institution of the traditional type which had littered the Spanish financial landscape before la crisis. Its purpose was the same as most others – to take local deposits and recycle these within the local community as loans. The model worked for over 150 years with the one odd constant being that priestly management.

  Cajas essentially succeeded because their managers were locals and could see if their local loan to this restaurante or that farm was going well or not. In effect the lenders had close if not daily contact with their borrowers. As priests play much the same role in small communities the Caja Santiago flourished, to the point where its growing size eventually saw secular managers added. Yet the priests remained in control, being the equivalent of the board of directors.

  There then occurred two different but simultaneous 'happenings'. The first was the influx of a number of large cash deposits, from outside the Cajas' traditional coverage area, amounting to a tripling within a year of the deposit base. Unfortunately there were not enough local customers to borrow sufficiently to pay the interest on those deposits. This meant something needed to be done.

  In addition, the priests seemed to have had an attack of greed, or perhaps they just hoped to deliver ever bigger dividends to their communities. In any case they had clearly heard of the huge profits being made around the Costa Mediterránea from the building boom. They thought they should join in, not least because this would enable them to make use of the newly expanded deposit base.

  They started lending outside their local area for the first time, to developers of apartment blocks, hotels and even for the creation of some of those notorious concrete cities. They did manage, however, to avoid lending to false-hope infrastructure projects in the middle of nowhere. Such investments burnt many others, for example with the two white elephant airports constructed in Castellón and 'Madrid Sur'.

  Beneath the surface, however, not all was well. While the new found deposit base had continued to expand, it proved insufficient to feed the investment aspirations of the priests. Using their secular managers the Caja began to borrow additional funds from the short-term money markets, which were only too delighted to lend. In effect the Caja used its existing deposit base to secure short-term borrowings of additional tens of millions, which it leveraged by making even larger long-term loans to developers, which were now measured in hundreds of millions.

  All this continued happily for several years. The benefits to the mountain towns were clear: new sports centres, swimming pools, community centres, health centres, concerts, fireworks, and more.

  The arrival of the financial crisis upset everything and an insidious chain of events unfolded. First, the Caja's borrowers hit trouble finishing projects because they could not sell what they'd started. They began going bust.

  The short-term money-market borrowings by the Caja, however, still needed repaying or rolling over. The rolling over could not occur because of la crisis and the subsequent freezing of the wholesale money markets. Repayments of the short-term money market loans could not happen because the developers could not sell sufficient assets to repay their loans, or had gone bust.

  "This led to a classic banking failure, which is how the Caja Santiago ended up in the hands of the Banco de España. The latter became its bankruptcy
or resolution agency. Why do I mention all this? I smelled a bad fish after the connection to Cardarzob but didn't know what to ask. Enter Caterina's genius. She can now take over."

  Caterina accepted Emilia's implied baton.

  "I realised that by using Pedro's investigative powers I could ask the Banco de España for access to the now defunct Caja Santiago's computer records. They have kept its computer systems running as they wind down its operations."

  Caterina proceed to show how, after obtaining access to these, she had begun to gather correlations between the M-In and M-Out accounts. She mentioned that she did not think the Banco de España really comprehended how broadly she was able to query the system.

  What emerged were the dates and amounts of many of the envelope payments paid into the Caja. There were several close correlations to the Márquez accounts. In retrospect, according to Caterina, it looked as if someone had spotted that a sleepy Caja managed by unworldly priests in Asturias had the potential to become a wonderful money laundering vehicle operating in full sight of the authorities and acting almost exactly like its peers.

  Pedro went on to illustrate how, when the financial roof fell in, Caterina had identified a pattern of major withdrawals in cash from the deposit base. She also found multiple withdrawals of 50,000 euros at a time, always using one hundred 500 euro notes. This accelerated the decline of the Caja. But where this cash went had remained a mystery to the Banco de España, until Caterina and Emilia made connections that neither it nor Hacienda, the tax office, nor the CNP could see.

  "This is what I was explaining to Juez Garibey. You may be interested to know who the Juez will be interviewing on Tuesday." Pedro looked around but no one was offering suggestions. "Salvador Corcuera."

  Davide queried, "You mean Márquez's gentleman friend in the photos that Ana identified? The person that tío Toño was so scathing about?"