Elites regularly profit with impunity from financial corruption. This is clearly demonstrated by the numerous billion-dollar financial scandals in recent years, including LIBOR rate fixing, tax evasion, commodity price fixing and financial mis-selling schemes. The political power of finance and its revolving door into government makes many bankers seem above the law. But this immunity is not unbreakable, as demonstrated by the wave of Spanish citizens now leading an anti-corruption charge unlike any that has come before.
The case of Rodrigo Rato is perhaps the most interesting among some 150 high-level corruption cases scheduled to take place this year in Spain – involving over 2,000 elite figures in Spanish society. Rato was the country’s Minister of Economics from 1996 to 2004, and a leading political force in the conservative Popular Party (PP) as well as managing director of the IMF (2004-2007) and chairman of Bankia, Spain’s largest bank (2010-12).
These institutions’ combined actions spurred Spain’s economic crash and intensifying poverty crisis, as Bankia’s massive debts were nationalized by the PP-controlled government and Rato’s bank became the main recipient of the bailout deal with the EU and IMF. From these business-government arrangements, Rato and the rest of Spain’s 1% profited while imposing austerity on the majority.
Last April, the Financial Times described Rato being shoved by a law officer during his arrest. “The touch lasted only a few seconds, but it will be seared into the mind of Rodrigo Rato — and of millions of Spaniards — for years to come,” wrote the paper. Millions saw the clip repeated on rolling TV coverage and the Internet. The Times article quotes an editorial by Spain’s El Mundo newspaper, illuminating its importance: “The precise moment in which the customs agent grabs his head… marks a point of no return, in which we leave behind an era.”
Translation: Rato and many others were no longer untouchable.
The case now underway against Rato and Bankia hinges around three aspects. First, the bank is charged with false advertising when it floated its stock for purchase. Second, it is accused of mis-selling toxic assets to unsuspecting members of the public. And third, it issued “black visa cards” to senior Bankia management, facilitating both tax evasion and bribery of politicians and government officials.