Ex-IMF boss on trial over luxury spending in Spain

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Ex-IMF boss on trial over luxury spending in Spain

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chief Rodrigo Rato

chief Rodrigo Rato

Former IMF chief Rodrigo Rato was jeered as he arrived at court on Monday for his trial for alleged of misuse of funds when he was the boss of two of Spain’s top banks.Rato is standing trial with 64 other former executives and board members at Caja Madrid and Bankia, whose near-collapse sparked an EU bailout of Spain’s financial sector. A total of 66 people were originally charged but one since died.Protesters jeered the former economy minister, who led the International Monetary Fund from 2004 to 2007, as he arrived at the courthouse outside Madrid.
Antonio Hernandez, 65, a retired driver, shouted “thieves” and “thugs” at Rato and other defendants, saying they had “ruined the lives” of thousands of small-scale savers and shareholders like him.Rato entered the courthouse without saying a word.Uncovered in 2013 by a journalist who saw a hacked email alluding to “black credit cards,” the case threatens to land the onetime star of the ruling conservative Popular Party (PP) in jail and with a hefty fine.It is also another thorn in the PP’s side after repeated failed attempts to form a government following two inconclusive elections, due to a lack of support that is in large part due to corruption scandals sullying the party.Rato and the other executives are accused of having paid for personal expenses with credit cards put at their disposal by both Caja Madrid and Bankia, without ever justifying them or declaring them to tax authorities.Altogether, they allegedly spent 12 million euros ($13.5 million) between 2003 and 2012 ”” sometimes splashing out at the height of Spain’s devastating economic crisis.According to the indictment, Rato maintained the “corrupt system” established by his predecessor Miguel Blesa when he took the reins of Caja Madrid in 2010.He replicated the system when he took charge of Bankia, a group born in 2011 out of the merger of Caja Madrid with six other savings banks, prosecutors say.Prosecutors are seeking a prison sentence of four-and-a-half years and a 2.6-million-euro fine.Rato has denied any wrongdoing and said the credit cards were for discretionary spending as part of the pay deal for executives.

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