After the inconclusive Spanish general election in December 2015 the ruling right-wing Partido Popular (PP) government have tried to hang onto power, despite not having enough MPs to form a majority (even with the support of the centre-right Trojan Horse protest party Ciudadanos). In the months since the election PP has been rocked by one corruption scandal after another, including a huge corruption scandal in Valencia (24 PP politicians and people with ties to the party arrested) and the implication of the wife of their environment minister in the Panama Papers scandal.
One of the biggest PP corruption scandals of all is going on in Madrid, where PP ran the city council from 1991 until they were turfed out by a Podemos led coalition in 2015. The scandal involved the sale of hundreds of units of social housing to a consortium between a US based vulture fund called Blackstone and an entity called Magic Real Estate.
The Mayor of Madrid who oversaw this corrupt fire-sale of public property was Ana Botella, who is the wife of former Prime Minister Aznar (you might remember him as one of the few world leaders to back Bush and Blair's catastrophic invasion and occupation of Iraq). Botella was a controversial figure before she decided to sell off a load of public property on the cheap because she never actually won a Mayoral election, she was parachuted into the role after the resignation of her predecessor.
The sale of the 1,890 apartments at the heart of the corruption scandal came during the biggest sell-off of public property in Spanish history, with billions of euros worth of public assets being distributed to the likes of Blackstone and HIG Capital (USA) AXA (France), Burlington Asset Management (UK) and the even the Bank of China!
The €128.5 million sale of the 1,890 social housing units was highly controversial at the time because it violated the first option rights of the tenants, and nobody but the utterly credulous believed the promises that rents wouldn't be hiked by the new owners. Within a couple of years, as expected, the new private owners raised the rents by up to 43% and began the process of evicting dozens of families (social cleansing).
The next revelation, in the summer of 2015, was that the American vulture fund Blackstone had significant links with José María Aznar Botella (the son of the Mayor and her husband, the ex-Prime Minister of Spain) and Juan Hoyos Martínez de Irujo (the ex-Prime Minister's close childhood friend). So it's established that the major of Madrid oversaw the sale of public property to an American vulture fund with links to her own son and to her husband's childhood friend!
In April 2016 a preliminary investigation into the sell-off was released establishing a number facts. Here are some of the findings:
- The sale price significantly undervalued the properties, meaning the buyers benefited from a €32 million discount on the actual value of the assets (about a 20% discount).
- The council acted unlawfully by not conducting any official valuation of the properties before allowing the buyer to set the sale price and then simply accepting it without consideration of whether it represented value for money.
- The sale was not put out to competitive tender, as was legally required.
- The housing units were sold as a block which violated the rights of the tenants who had the contractual right to purchase the properties for themselves after 7-10 years of occupancy.
The current Podemos led city council have stated that they would try to reverse the unlawful sale if the irregularities in the preliminary report are confirmed. Meanwhile the party responsible for this corruption scandal (and countless others) are doing all they can to cling onto political power at the national level.
The appalling thing is that despite all of the corruption scandals, PP have a core demographic of mainly older tribalist voters who will under no circumstances vote for any other party. This is a very similar situation to the Tory party in England, who can always rely on backing from some 20% of likely voters, no matter how extreme their incompetent, or how many scandals the party is rocked by.
There is no doubt that the 2011-2015 right-wing government of Spain was the most corrupt of all since the fall of General Franco's fascist dictatorship in 1975. Aside from the aforementioned scandals there's also been the €449 million Gürtel embezzlement case, the secret Bárcenas slush fund for PP politicians, the former PP economics minister Rodrigo Rato's involvement in the Bankia collapse and bailout, the imprisonment of Carlos Fabra for tax fraud, the Palma Arena corruption scandal, and on and on ... However even with all of these scandals being public knowledge, PP still somehow managed to secure more votes than any other party in the inconclusive December 2015 general election!
If no coalition government is agreed by the 2nd of May, the Spanish constitution dictates that there will need to be another election no later than the 26th of June. Podemos (who broke through at the last election to become the third largest party in Spain within just two years of their foundation) look likely to make more gains because of their consistent anti-corruption stance, but PP can't be ruled out of the equation because they have plenty of older tribalist voters to support them. The existence of the PP tribalist voter block means that if younger Spanish voters (who are much less likely to support PP, but also much less likely to vote) don't turn out in force because of "election fatigue", PP could end up creeping back into power despite their disgusting track record of corruption.
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