On the doorstep

Corruption isn't really news in Spain any more. I don't mean that literally. Corruption is always in the news. Its just so commonplace that it has lost its impact. I just had a look to see how many politicians are facing charges at the minute and the information is a bit confusing. One of the problems in getting a figure is that there is no specific charge called corruption. So the figure depends a bit on what you count. The other thing is that lots of the corruption involves people at the edge of politics. The husband of a princess isn't a politician but the charges around him are clearly political. And someone who used to be a vice president and went on to manage the International Monetary Fund and then one of the big banks isn't a politician any more. So let's just say that the number is on the top side of 2,000.

Most of the political corruption belongs to the PP, the conservative side. The last three party treasurers are all in trouble. There are eleven open cases in the Balearic Islands, six in Valencia, three in Madrid, three in Madrid, another three in Galicia etc. Just so nobody can accuse me of political bias I should mention that the Socialists have a big case of their own down in Andalucia. It's quite difficult to keep on top of these cases too. Spanish justice makes snails look like rapid movers. So a case will disappear from the headlines for months and then suddenly pop up again. I find it difficult to remember whether its Punica or Pokemon that's in Madrid or Galicia and cases I'm sure were done with will suddenly re-appear with fresh impetus. Lots of the cases interweave or involve court appearances by the same people and I'm always amazed how big names seem to be able to shrug off accusations with impunity. Maybe there was something in that New York Times article that suggested the Spanish press isn't very investigative because it is so in debt that exerting pressure on the media to keep quiet is dead easy.

There's plenty of private corruption too. Banks must top the list but a dodgy pyramid selling scheme based on stamps was one of the first cases I remember as we arrived here and I don't think that's finished yet. The most recent case centres on a dental franchise but there have been lots more - travel agencies and fish canners spring.

On the radio this morning I heard something about the amount of money that the tax agency reckons is hidden away but Google can't find the story because there are simply so many financial fraud stories. Dodgy practices with meat processing came up a lot in that search! I was going to use the tax story to suggest that financial practice here isn't above a bit of low-level corruption on the cash in hand, not paying VAT scale.

Then there are enchufes. An enchufe is the old "it's not what you know it's who you know". I remember when I taught a lot of adults there were lots of speaking exercises that were based on job interviews and interview experience. They didn't work very well because most of my students had got their job through the help of an uncle, a brother in-law etc.

I have heard bits of gossip here in Pinoso about political corruption but I'm not well enough informed to be able to say how true the stories are. The other day though I saw a YouTube link with someone talking in the Valencian Parliament about how the enchufe system was alive and we'll with political favours in the regional health service. As I listened to the link I heard a name I know well, someone who I greet in the street. 

It was a bit of a shock being so close to home.

Nothing in particular

It's raining. It's rained quite a lot in the last couple of weeks. We've forgotten all about the drought which lasted from last winter through to a few weeks ago. Usually, though not today, it rains overnight which is very civilised. I can't pretend that it's warm but it isn't cold either - at least not outside. Generally we're into the mid to high teens during the day but with sun and blue skies so it feels pleasantly warm. Overnight we're down at 7ºC or 8ºC maybe. I expect it will turn cold in December, it usually does. The pile of leaves that have just started to clog our drive suggest that Autumn has finally arrived. And its getting dark just after six in the afternoon. Considering it will start to get lighter again just before Christmas that's not too bad. So outside, in the fresh air everything is as it should be. Inside the house of course it's miserable. On the front page of today's Alicante paper there's a headline which says that nearly half of the houses in Alicante province lack any form of insulation against sound, heat or cold. This statistical information is tied in to the introduction of energy efficiency certificates for dwellings a while ago. In our house the little windows, designed to keep out the beating sun of summer make our rooms dismal in winter and the uninsulated house with tiled floors, painted walls and badly fitting doors make it exactly the opposite of cosy. With the log burner alight the living room has been lovely and warm but all the adjoining rooms have a cold, musty feel. Getting into bed is quite unpleasant until you stop shivering.

In the news, corruption stories are everywhere. The health minister resigned this week. She was mentioned by a judge as being the direct recipient of goods bought with her husband's dodgy money. I heard lots of comments that it was like making the poor thing resign for having eaten poached game when she didn't know it was poached. Hmm. The same judge said the ruling PP or Conservative party had benefitted directly from dodgy funding but the health minister's boss, the national president, forgot about that when he stood up in parliament and said that corruption was not endemic. The last three PP party treasurers have all been in court, one is on remand and that one has accused the current president of taking illegal payments. I wouldn't like to give the idea that only the PP have their fingers in the till. Certainly on percentages they come out top but, down in Andalucia, there's a huge corruption deal about suspect redundancy notices which implicates two past PSOE or Socialist party presidents. And the independents don't want to miss out either. In Cataluña an almost mythical ex leader turns out to have a stash in Andorra and there was a case of illegal party funding a while ago that another key political figure somehow seemed to sidestep.

Back to our national president; he's a very strange president. Earlier this month a couple of million Catalans turned out for an illegal referendum on independence - the national president generally ignored that and sent something akin to the Crown Prosecution Service (if it's still called that) after the regional president for running an illegal poll. So much easier than arranging to talk about it. He's behaving the way I do when I need to talk to someone in Spanish on the phone. Anything to avoid a difficult conversation.

There are close on 2000 politicians currently charged with some level of corruption yet none of the promised anti corruption legislation has got past the committee stage. The politicians don't go easily either. None of them behave like people convicted of crimes. No sackcloth and ashes. Most of them spin out the process for ever with iffy legal arguments and expensive lawyers. The few who have been locked up argue about which prison they'd like. An ex president of one of the regions was in the sort of prison regime where you go home for the weekends and only put on your stripey suit every now and again. When people found out they got a bit indignant so a judge decided to withdraw those privileges. The ex politician appealed the decision. Another ex regional president who has been sentenced to four years in chokey still has body guards and an official looking car and has been asking the Central Government for a pardon - a real live get out of gaol for free card.

Yesterday I got a text message from the General Treasury of the Social Security on my phone to tell me that my petition to become a self employed person had been approved. In the past I've complained about the difficulties that people face who want to set up their own business here. People needed to have a hefty amount of cash behind them in the bank or at least some heavyweight backers willing to cough up if the business went pear shaped. Social security payments were high too with even the smallest business subject to a 260€ minimum payment from the first day of trading and before any tax committment. Anyway, for my new job, my new boss suggested that I should be self employed. This only made sense because now there is a sort of reduced charge sliding scale social security payment scheme starting at around 53€ for the first 6 months and then going 130€, 180€ and finally 260€ after two years. I thought it sounded like a good scheme. An incentive to get people to register and run legal businesses from the start rather than to start illegally and register only when the profits justified it. Nonetheless in my case I thought it sounded a bit flaky and there were plenty of disadvantages as well as advantages but the accountant told me that at least it was all legit. He did all the work. All I had to do was to sign on the dole and hand over some basic ID documentation and he did the rest. Then a text message. Nearly as strange as our president.

Rhyme and reason

One advantage of the English language is that the word banker has an obvious rhyme. The Spaniards share the sentiment but not the rhyme.

To the best of my knowledge this is a vastly oversimplified but basically accurate description of the Spanish banking system. Essentially, in recent history, there have been three types of "bank".

The first is the standard commercial bank; the bank raises capital and then lends money to people and organisations in order to make a business profit. The second is the Caja de Ahorros, a Savings Bank where the money for loans came from the deposits of the savers. Many of the Savings Banks in Spain originally loaned money against pawned items. The profit from the operation is used to support loans to savers and a certain percentage is diverted to a charitable foundation to support "good causes." The third institution, the Rural Savings Bank, has syndicalist or co-operative roots and was originally developed to promote agriculture in rural areas.

At sometime in their history the Savings Banks were limited to operating within geographical boundaries so that the CajaMurcia, the "Murcia Savings Bank" operated in Murcia and the Caja de Ahorros del Mediterraneo or "Mediterranean Savings Bank" did business in Alicante and Murcia. As the legisltion was relaxed the Cajas began to operate further from home. Somewhere along the way regional politicians got involved in the running of the majority of the Savings Banks often because of the influence they wielded through the charitable foundation of the Caja.

So the history of the Cajas de Ahorro is a familiar story, similar to the UK Building Societies. Local Savings Banks merge to produce larger institutions which look, to anyone without specialist knowledge, almost exactly like banks though their names at least suggest some link to the locality.

There were tens of big and powerful Savings Banks when we first arrived here. Lots or maybe all of the Cajas ploughed money into what is now worthless land, overpriced houses and grandiose and redundant building projects. As the debt burden caught up with them and the regulatory authorities started to investigate the level of bungling, cronyism, mis-selling and straightforward theft started to emerge.

Recent legislation, the demands of Brussels and the European Bank have all helped to change the face of Spanish banking. Unfortunately the system we live in depends on the banks acting as the conduit between lenders and borrowers so we, the taxpayer we, have been forced to bail the bunglers and crooks out. I resent that and I would be very happy to see lots more of the fraudsters go to prison. Fat chance of that though - the old boy network is very alive and well in Spain. Only the other day one of the alleged culprits from one of the biggest failed bank mergers got himself a nice little number as an advisor to the old ex state monopoly telephone company.

Anyway. I understand that only two Savings Banks still exist in Spain. All the rest have become commercial banks. We went to Ontinyent today to have a look at one of them. It looks pretty modest doesn't it? In fact it was the 43rd biggest of the 45 Cajas in Spain but 43 of them have gone. Now the Caja de Ahorros de Ontinyent is the largest survivor. The other the Caja de Ahorros de Pollensa is in Mallorca on the Balearics.

Apparently it's in perfectly good financial shape, it's bosses and workers get reasonable salaries, politicians are not involved in its operations and there is not a whiff of scandal about the way it does or has done business.

Las Lamparillas

The best route home from Cartagena to Culebrón passes close by the town of Fortuna. Alongside the ring road the gaunt skeletons of hundreds of unfinished houses bear witness to the folly of the Spanish building boom. The planned development, built in the bone dry scrubland that surrounds Fortuna, was to be called Fortuna Hill Nature and Residential Golf Resort.

 A key part of the new resort was the Las Lamparillas development. It was aimed at golf playing Britons who weren't quite rich enough to buy a similar place on the coast and was planned to have 3,737 houses when complete. There were other agreements for other developments in Fortuna. If everything had gone as planned Fortuna's population would have increased from 10,000 to 100,000.

A research project carried out by a local university in 2004 gives some idea as to the scale of the building work planned. Across Murcia, a region with just one and a half million inhabitants, there were agreements to build 800,000 houses. The figures never made sense but nobody seemed to notice before everything went pear shaped.

Work on Las Lamaprillas, which was just part of the whole resort, started in 2007. By 2010 the principal developer of the site went bust with debts of some 120,000,000€. The banks that had loaned the money took the valueless site and the part completed houses as payment. Nobody, not the banks, not the courts and certainly not the developers considered doing the decent thing by the people who had paid deposits for the houses or to the merchants who supplied the building materials. Local businesses and house buyers are still owed around 30 million by the developers.

The town mayor says that it's easy to criticise now but that, at the time, everyone was doing well out of the building boom and nobody was complaining then.

Local councils can re-classify former rural land as urban land. On reclassification citrus groves and farm fields become much more valuable as buildiing plots. In the boom years Fortuna town council found itself with nearly 10 million euros extra from the sale of reclassified land and the councillors set about spending the money with gusto. They expected more money to follow and they borrowed against future income. The result now, in the lean years, is that the council has had to jack up taxes and either cut services or charge more for them. Many projects were never completed but the bank loans on them still have to be paid off.

In small towns in Spain everyone knows everyone else. Little networks of friends and relations do favours for other little networks. The money coming in from the developers apparently flowed into lots of those networks. At the time of the local elections in 2003 with so much money swilling around the locals became much more interested in who was in charge whilst the politicians saw the potential in controlling all that lovely money. The ruling PP party set about buying votes. It wasn't until 2011 that the courts found party workers guilty of vote rigging. The mayor, the same man is still the mayor now as then, chose not to resign.

The people of Fortuna will be paying for las Lamparillas for years to come. Spain is paying for lots of similar projects the length and breadth of the country.

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Since writing this article a higher court has confirmed the charges of vote rigging in Fortuna and the Mayor, Matias Carrillo, has resigned.