Ex-IMF head Rato stands trial in Spain over credit card use
Former International Monetary Fund chief Rodrigo Rato (R) leaves his office in Madrid April 17, 2015. REUTERS/Andrea Comas
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
By Angus Berwick
MADRID (Reuters) - (Please note offensive language in fifth para)
Crowds jeered at former International Monetary Fund chief Rodrigo Rato when he arrived at a Madrid court on Monday to face trial for his alleged misuse of company credit cards on extravagant personal expenses.
Rato and 64 other executives and former board members from lender Bankia and its founding savings bank Caja Madrid are accused of illegally spending 12 million euros ($13.48 million) for personal use on so-called "black cards" between 2003 and 2012.
Prosecutors are seeking a four-and-a-half year prison sentence for Rato, Bankia's chairman shortly before it needed a state bailout in 2012 at the height of the euro zone debt crisis.
Rato, a former Spanish finance minister and one-time contender to lead the ruling center-right People's Party, has denied wrongdoing in the case, as has Miguel Blesa, his predecessor at the bank.
The case has infuriated Spaniards who were hurt by the crisis. As the two former managers arrived at the court in the outskirts of Madrid for the trial's preliminary proceedings, a group of people who had lost money following Bankia's bailout shouted "hijo de puta" (son of a bitch) and other insults at them.
Blesa will return on Friday to testify, a court spokeswoman said, with Rato likely returning early next week.
Blesa's lawyer, Carlos Aguilar, declined to comment. Ratos' lawyer, Ignacio Ayala, did not respond to requests for comment. Aguilar told the court that the evidence presented was "invalid" since they infringed on the accused's rights, El Pais newspaper said.
Tales of luxurious spending on the "black cards" sparked widespread public anger when the scandal broke in 2014, at a time when Spain was only just emerging from financial crisis triggered in part by Bankia's near-collapse.
The cards were used to buy jewels, holidays and expensive clothes, according to documents filed with the court, but also to fund more mundane trips to the cinema.
Rato is accused of notching almost 100,000 euros of bills over his two-year tenure at Bankia. Rato, who headed the IMF between 2004 and 2007, has paid back the amount, according to previous court statements.
Prosecutors want a six-year sentence and 9.3 million euros in damages for Blesa, who was chairman of Caja Madrid from 1996 to 2010. Caja Madrid later merged with other banks to form Bankia.
Bankia's stock market listing, which took place under Rato's watch in mid-2011, is also being investigated by Spain's High Court, though there is no decision yet whether that case will go to trial. Many ordinary Spaniards lost money after their shares plummeted in value following the bank's bailout.
The credit card case is one of several high-profile corruption investigations which implicate the PP and that are now coming to trial. The so-called Gurtel investigation into allegations the party's top brass had a slush fund bankrolled by friendly businesses reaches trial on Oct. 4.
PP leader and acting Prime Minister Mariano Rajoy is still looking for support to try and form a government to end a nine-month political deadlock and avoid Spain's third election in a year. ($1 = 0.8899 euros)
(Editing by Sarah White and Angus MacSwan)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- GrubHub quarterly revenue beats as orders increase
- UK PM May says Brexit vote will not undermine Northern Ireland peace deal
- Syria monitor: school children among 22 dead in Idlib strikes
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!