The crusading Spanish judge who tried to extradite General Augusto Pinochet for genocide is charging into battle again, this time against one of the country's most powerful banking dynasties accused of salting away millions in secret offshore accounts.
Judge Baltasar Garzon, who last week took over the investigation, has summoned the Bank of Spain's governor, Jaime Caruana, and his deputy for questioning today. He wants to ask them about meetings they held with bosses of the Banco Bilbao Vizcaya Argentaria (BBVA), Spain's second- biggest bank and one of a handful of international giants, about shadowy slush funds.
Judge Garzon is considering criminal charges against BBVA bankers who set up secret accounts in the offshore tax havens of Jersey and Lichtenstein that contained some €225m (£138m). The accounts were opened in 1987 and closed in 2000 when, under prodding from the Bank of Spain, BBVA reported the money as "extraordinary profits".
The money allegedly supplied secret tax-free pensions for BBVA directors, and financed a number of covert operations in Latin America where the bank has huge investments.
The scandal has rocked the secretive world of Spanish corporate finance and has forced the downfall of the bank's joint chairman, Emilio de Ybarra, the disgraced patriarch of one of Spain's most illustrious banking families, and nine directors. Others are expected to quit in coming weeks from companies in which they represent the bank.
The sleaze threatens to engulf the government because of the allegation that a senior official on tax affairs, Estanislao Rodriguez Ponga, may have advised BBVA bosses on how best to set up the accounts.
Rodrigo Rato, Spain's conservative Economics Minister, fobbed off a request from opposition socialists at the weekend for a parliamentary inquiry. "It is not for parliament to investigate the activities of individuals," Mr Rato said.
The funds provided pensions totalling £14m for a select few on the BBVA board, without the others' knowledge. The bank's ruling barons are already a wealthy and revered social elite in Spain, where banking has long been valued over industry as an entrepreneurial activity.
The funds are also said to have supported the recently reinstated Venezuelan President, Hugo Chavez, days before he contested general elections. In December 1998, $500,000 (£348,000) was funnelled to Mr Chavez when he was a candidate. The secret gift was repeated for his presidential campaign, in July 1999. The aim was to protect a BBVA subsidiary, the Banco Provincial, and dissuade the populist leader from nationalising it.
The money appears to have been generated by the banks Banco de Viscaya and Argentaria, which merged with the original Banco de Bilbao, founded by the Ybarra family, to form the mighty BBVA conglomerate.
The stiffest penalty that the Bank of Spain can hand out is a fine. But Judge Garzon suspects that acts of forgeryof documents, misappropriation of funds, breach of trust, fraud and other crimes were committed by the directors and that they could be indictable.Reuse content