ERE scandal lasted years, and ignored redundant workers

TWO former regional premiers from the PSOE Socialist Party have been found guilty by a Seville court in the main case of the so-called “ERE scandal”.

It involves a decade of irregularities in the use of a €680m government fund, which was meant for laid-off workers.

A court in the southern Spanish region of Andalusia has found two former regional premiers guilty of corruption-related crimes in a far-reaching scandal, known as the “ERE” case, which involved the PSOE Socialist Party.

The probe, named after the Spanish term for a collective dismissal procedure (expediente de regulación de empleo, or ERE), involved allegations of illicit pay-outs from a fund, set up by the regional government to help struggling firms make severance payments to laid-off workers.

The system, approved annually by the regional parliament as part of the annual budget, is alleged to have enabled the fraudulent scheme to avoid oversight by the internal audit office.

José Antonio Griñán, who served as the PSOE’s regional premier in Andalusia, between 2009 and 2013, has been given six years in jail for his role in the case, while his predecessor, Manuel Chaves, also of the PSOE, in power between 1990 and 2009, has been barred from public office for nine years.

What’s more, Magdalena Álvarez, a former government minister and ex-regional economic chief, along with another former regional minister, Gaspar Zarrías, have also been barred from public office for the same period.

Griñán, Chaves, Álvarez and Zarrías have all been convicted of prevaricación, which, under Spanish law, is when a public official abuses his/her power by knowingly making an unfair decision. Griñán was also found guilty of misuse of funds.

In addition to Griñán, another four ex-regional ministers have received prison spells: Antonio Fernández (Employment) and José Antonio Viera (Labor), Francisco Vallejo (Innovation) and Carmen Martínez-Aguayo (Finance).

The highest sentence went to Fernández, who was jailed for seven years and 11 months. Vallejo and Viera were each jailed for seven years, and Martínez-Aguayo went down for six.

Of the 21 defendants, just two were acquitted of all offences: the regional government’s former comptroller, Manuel Gómez, and the head of legal services, Francisco del Río.

The probe has focused on a €680-million government fund, used to make payments between 2000 and 2009. The scandal has also affected former, top regional officials from the Socialist Party (PSOE), in power for 36 years until December 2018, when it was ousted by a right-wing coalition, following regional elections.

With 507 people under scrutiny for nine years by up to seven investigating judges, the case became so large and unwieldy that it was broken up into 146 separate probes.

On Tuesday, a three-judge panel at Seville Provincial Court handed down decisions in the main case, which will serve as a guideline for the remaining investigations.

This main case targeted former regional premiers Manuel Chaves and José Antonio Griñán, as well as six former department chiefs and 13 other former high-ranking officials from the Andalusian government.

“The worst part is that none of the 21 accused has any sense of having committed any crimes,” said one of the lawyers, shortly before the ruling was announced.

The trial, which has taken up an entire year, divided into 152 court sessions, has been described as “never-ending” by both the defence and the prosecution.

The ruling runs to around 1,800 pages, similar in scope to the verdict in the Gürtel corruption case, which involved the conservative Popular Party (1,687 pages), and more than triple the space taken up by the Supreme Court ruling on the Catalan secession bid (493 pages).

Both former regional premiers and the ex-ministers were considered by the court to be responsible for the system of public funds.

And judges ruled that Griñán, during his time as regional economy chief, was aware of reports from the Comptroller General’s office, which criticised the irregular subsidies, but did nothing in response.

Defence lawyers have already said they will appeal the ruling at Spain’s Supreme Court, which will have the last word. But none of the defendants sentenced will see the inside of a prison cell, until that top court has concluded its trial.

The scandal began a decade ago, when Seville food wholesaler Mercasevilla underwent an ERE collective dismissal procedure.

Police discovered that a few individuals had received early retirement payments from the government fund, despite never having worked for the company.

Their investigation uncovered a complex system, set up within the Andalusian Government, to channel early retirement funds to friends of the Labour Department’s Director General, as well as to mayors and to high-ranking PSOE officials.

Over the years, the list of potential crimes and irregularities grew to fill two million pages. The probe was initially led by Judge Mercedes Alaya in co-operation with the Guardia Civil and anti-corruption prosecutors.

The probe turned up public funds that had been spent on cocaine by ex-employment chief Javier Guerrero and his driver. There was also a web of ghost companies, and a network of patronage, involving hundreds of entrepreneurs, insurance companies, lawyers and more.

Sources involved in the case note that 85% of the money in the fund was used for legitimate purposes, mainly early-retirement payments for more than 6,000 employees.

“The heavy-handed headlines about the biggest corruption case in democracy have acted like a steady drizzle that has had an effect, even though they are based on prejudice,” said one lawyer, who requested anonymity.

The ruling in the main ERE case probe, which has been used by the PP to counter accusations of corruption over its own Gürtel scandal, comes as Spain’s political parties attempt to forge agreements that will allow the formation of a government following the repeat election of 10th November.


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