Former IMF chief Rodrigo Rato went on trial today accused of overseeing a “corrupt system” that helped him and other executives misuse funds when he was the boss of two of Spain’s top banks.
Protesters shouted “thief” and “fraud” at the former economy minister and deputy prime minister as he arrived at the courthouse outside Madrid.
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.
Rato, 67, entered the courthouse without saying a word for the trial, which is expected to last until December.
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, who led the International Monetary Fund from 2004 to 2007, 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 (USD 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.
With his undeclared credit card, Rato is accused of having spent 99,000 euros in two years on items such as luxury bags, five-star hotels and alcohol.
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.
During Rato’s career as a banker Spain was rocked by another banking scandal considered the country’s biggest ever.
Thousands of small-scale investors lost their money after they were persuaded to convert their savings to shares ahead of the flotation of Bankia in 2011, with Rato at the reins.