The latest scandal facing Mr Gonzalez was immediately billed here as Spain's Watergate. The report suggested that the Prime Minister's right-hand man, Narcis Serra, the deputy Prime Minister, had ordered the report to gather dirt on Mr Conde at a time when the latter appeared set, Berlusconi- style, to enter politics as a right- wing alternative to the ruling Socialists. Mr Gonzalez was known to fear the charismatic banker far more than Jose Maria Aznar, the conservative opposition leader. The subsequent investigation suggested Mr Conde had made millions of pounds in illegal commissions from sales of companies and had links with arms deals to South Africa. Mr Conde yesterday issued an angry denial but said he had known of an investigation by Kroll Associates.
Around the time the investigation was said to have been completed, at the end of 1992, Mr Conde abruptly ended his political statements and dropped from the political limelight. A year later, last December, Spain's Central Bank took control of Mr Conde's bank, Banesto, saying it was over-extended by several billion pounds. Mr Conde faces a legal investigation into his running of the bank and legal action from shareholders.
The daily, El Mundo, yesterday published details of the investigation and final report, including photocopied pages, which it said had been ordered by Mr Serra, with Mr Gonzalez's approval, via the then chief of Spain's Guardia Civil, Luis Roldan. Mr Roldan, suspected of massive illegal enrichment from public funds, disappeared two weeks ago but has been in contact with El Mundo. The newspaper quoted him as saying Mr Serra had provided the funds in suitcases full of cash, which was later paid to the US investigative firm, Kroll Associates, to look into Mr Conde's affairs and draw up what the firm codenamed the Crillon Report.
Mr Serra told Mr Roldan to keep the assignment secret, without informing the Interior Ministry or Spanish intelligence services, and to provide copies to Mr Serra, Mr Gonzalez and Carlos Solchaga, then the Economy Minister, a close adviser of the Prime Minister, according to El Mundo. Mr Solchaga resigned last week as the Socialist Party's parliamentary leader and as a deputy in connection with another scandal.
A knowledgeable source said there was no concrete evidence that Mr Serra had ordered the Conde investigation. An employee of Kroll Associates said only: 'It is company policy not to comment on any work we may or may not have done.'
Kroll is believed to have investigated Jean-Claude 'Baby Doc' Duvalier, the former Haitian dictator, and Ferdinand Marcos, the former president of the Philippines.
In his indignant statement, Mr Conde said that he had known that Kroll Associates had been investigating him, but denied the report's claims that he had made millions of pounds from illegal commissions on the sales of companies. He threatened to take unspecified 'appropriate action'.
Mr Serra denied ordering the report on Mr Conde, saying he had first learnt of it in El Mundo. The knowledgeable source, however, said that at least one cabinet minister had known of the Kroll report on Mr Conde several months ago.
Mr Gonzalez tried to avoid addressing the claims in the newspaper report when he appeared before parliament yesterday to inform deputies about the disappearance of Mr Roldan, accused of pocketing up to pounds 2m of public funds, including more than pounds 300,000 destined for orphans of Guardia Civil officers killed by Eta separatists from the Basque region.
But Mr Gonzalez did say: 'It's false what he (Mr Roldan) asserted, as Deputy Prime Minister Serra has said with complete clarity.' Commenting on the Roldan case, he said: 'I believe my resignation would generate a climate of instability. I'm going to end my mandate (due to terminate in 1997) with honour, without bowing my head.'Reuse content