Corruption's Price: A Spanish Deceit (47 page)

Safely back in their
piso
she handed over the copies and said in a tart tone, "Your fame is carved in paper. By the way, I would ask for an escort to the
Sala
in future, not only to penetrate the paparazzi, but also to protect you from
the
neighbour from hell downstairs. You might even think to ask for police on the front door."

Rafa Garibey winced, "What a combination! But it's a good idea. Will you make some coffee while I call?"

"Only if I can look at the papers as well."

He assented before making contact with Pedro and explaining his problem. Pedro assured him that there would be no difficulties.

Back in the kitchen he found his wife incredulous.

"I haven't really been paying attention." She made a face of slight contrition. "Have you really skewered that pious prig, the Cardinal Archbishop and Fajando of Opus as well?"

"The pious prig, yes. Opus no, but its secular head, yes."

"Did you enjoy it?"

Rafa Garibey looked around as if magic ears might be listening before saying in a mock whisper, "I'll tell only you this, but yes, hugely."

"Good for you! It could not have happened to a nicer pair." She brushed back greying hair. "So yesterday was big business?"

Rafa Garibey gave her a short summary and ended by recounting the questioning of ServiArquitectos. If anything, his wife was even more pleased.

"I am so happy. That company is so distasteful in the way it consistently mistreats its people whom it does not have the courage to pay as employees. Remember Jesús and the way he was abused."

"Yes, but that didn't sway me."

"I know you. Keep finding different mechanisms to make them suffer." She rubbed her hands in glee. "So what do you have next?"

"That would be telling. I shouldn't be confirming any of what you're asking but I see the papers have pretty much accurate transcripts of what went on during the past days. I never know how they do it. My enquiries are supposed to be confidential, yet within twenty-four hours they're public knowledge. I guess the same would happen today if I hadn't postponed the next hearing to Tuesday. If all goes as I expect, one overly-proud and distasteful persona is going to resemble a stuck balloon."

The image appealed to him. By reputation he really did not care for his witness on Tuesday.

"What else do the papers say?"

"The general essence is that you seem to have found some fount of hard evidence, of a type which has always been missing before."

"That's pretty shrewd. They don't say what?"

"No. My next impression is they seem convinced you've more up your sleeve that you're not disclosing. They're speculating about politicians, especially ones who've worked in business at some time. The chattering is all about who's next.

"My last impression is that the left is delighted, even if its own are to fall beneath your headlights. The right, on the other hand, is incensed that any of theirs could even be implicated. This is all packaged up, in their case, with turgid condemnations of what you accomplished with the pious prig and Opus, as if linking themselves with all things allegedly holy might insulate or even excuse any possible fault."

Rafa Garibey always enjoyed his wife's acerbic turns of phrase. She filled him with happiness. He was not nervous about next week but not as calm as the previous days. He did not know exactly why. Instinct? Fear of a confrontation? He would have to wait and see.

Much would depend on Pedro and his people.

Sunday: Madrid

Pedro returned to the room where he had been debriefing Emilia and Caterina. He had brought Ana and Davide along, the first time that they all been together in over a week. Caterina inspected Davide closely before turning her attention towards Ana.

In contrast, Emilia focused on Ana alone. From what she could see there was a difference. She was not sure what it was about Ana but definitely there was a change.

Well, one aspect was how she appeared. It was more mature in some indefinable way. The clothes were the same, smart and fashionable. The hair was almost the same, perhaps a little less spiky. Could it be the make-up? Possibly. It was more subdued than previously, but that might only be accidental.

She would have to wait for her instincts to catch up. Emilia had great confidence in those instincts: look where they had gotten her.

Pedro confirmed that on Thursday he had reached
Juez
Garibey who had postponed the next hearing to Tuesday in order to create additional time for their work. After speaking to the
Juez
yesterday evening he indicated the
Juez
was delighted with what Caterina and Emilia had traced, though he had also said he was not quite sure how to use it.

"How did you find what you did, Emilia? Will you explain again?"

Emilia started with
Caja Santiago
. Apparently it had bothered her sufficiently to ask Caterina to do some deeper research. What Caterina discovered was that this
Caja
had been a minor twenty-branch outfit based in some of the mountain and seaside towns of Asturias with one outlier branch in Huesca in Aragón. Strangely it had been run by priests after being originally set up in the nineteenth century by a pious believer who left a large bequest to five parishes to lend to the needy. Those parish priests became the initial managers and they proved rather able.

In effect the
Caja
was a typical small savings and loan institution of the traditional type which had littered the Spanish financial landscape before
la crisis
. Its purpose was the same as most others – to take local deposits and recycle these within the local community as loans. The model worked for over 150 years with the one odd constant being that priestly management.

Cajas
essentially succeeded because their managers were locals and could see if their local loan to this
restaurante
or that farm was going well or not. In effect the lenders had close if not daily contact with their borrowers. As priests play much the same role in small communities the
Caja Santiago
flourished, to the point where its growing size eventually saw secular managers added. Yet the priests remained in control, being the equivalent of the board of directors.

There then occurred two different but simultaneous 'happenings'. The first was the influx of a number of large cash deposits, from outside the
Cajas'
traditional coverage area, amounting to a tripling within a year of the deposit base. Unfortunately there were not enough local customers to borrow sufficiently to pay the interest on those deposits. This meant something needed to be done.

In addition, the priests seemed to have had an attack of greed, or perhaps they just hoped to deliver ever bigger dividends to their communities. In any case they had clearly heard of the huge profits being made around the
Costa Mediterránea
from the building boom. They thought they should join in, not least because this would enable them to make use of the newly expanded deposit base.

They started lending outside their local area for the first time, to developers of apartment blocks, hotels and even for the creation of some of those notorious concrete cities. They did manage, however, to avoid lending to false-hope infrastructure projects in the middle of nowhere. Such investments burnt many others, for example with the two white elephant airports constructed in Castellón and 'Madrid Sur'.

Beneath the surface, however, not all was well. While the new found deposit base had continued to expand, it proved insufficient to feed the investment aspirations of the priests. Using their secular managers the
Caja
began to borrow additional funds from the short-term money markets, which were only too delighted to lend. In effect the
Caja
used its existing deposit base to secure short-term borrowings of additional tens of millions, which it leveraged by making even larger long-term loans to developers, which were now measured in hundreds of millions.

All this continued happily for several years. The benefits to the mountain towns were clear: new sports centres, swimming pools, community centres, health centres, concerts, fireworks, and more.

The arrival of the financial crisis upset everything and an insidious chain of events unfolded. First, the
Caja's
borrowers hit trouble finishing projects because they could not sell what they'd started. They began going bust.

The short-term money-market borrowings by the Caja, however, still needed repaying or rolling over. The rolling over could not occur because of
la crisis
and the subsequent freezing of the wholesale money markets. Repayments of the short-term money market loans could not happen because the developers could not sell sufficient assets to repay their loans, or had gone bust.

"This led to a classic banking failure, which is how the
Caja Santiago
ended up in the hands of the
Banco de España
. The latter became its bankruptcy or resolution agency. Why do I mention all this? I smelled a bad fish after the connection to Cardarzob but didn't know what to ask. Enter Caterina's genius. She can now take over."

Caterina accepted Emilia's implied baton.

"I realised that by using Pedro's investigative powers I could ask the
Banco de España
for access to the now defunct
Caja Santiago's
computer records. They have kept its computer systems running as they wind down its operations."

Caterina proceed to show how, after obtaining access to these, she had begun to gather correlations between the M-In and M-Out accounts. She mentioned that she did not think the
Banco de España
really comprehended how broadly she was able to query the system.

What emerged were the dates and amounts of many of the envelope payments paid into the
Caja.
There were several close correlations to the Márquez accounts. In retrospect, according to Caterina, it looked as if someone had spotted that a sleepy
Caja
managed by unworldly priests in Asturias had the potential to become a wonderful money laundering vehicle operating in full sight of the authorities and acting almost exactly like its peers.

Pedro went on to illustrate how, when the financial roof fell in, Caterina had identified a pattern of major withdrawals in cash from the deposit base. She also found multiple withdrawals of 50,000 euros at a time, always using one hundred 500 euro notes. This accelerated the decline of the
Caja
. But where this cash went had remained a mystery to the
Banco de España,
until Caterina and Emilia made connections that neither it nor
Hacienda,
the tax office, nor the CNP could see.

"This is what I was explaining to
Juez
Garibey. You may be interested to know who the
Juez
will be interviewing on Tuesday." Pedro looked around but no one was offering suggestions. "Salvador Corcuera."

Davide queried, "You mean Márquez's gentleman friend in the photos that Ana identified? The person that
tío
Toño was so scathing about?"

"The same," said Pedro. "
Juez
Garibey, the
Banco de España
and I are all very grateful to the four of you for your contributions in unlocking the puzzle. Indeed,
Juez
Garibey is happy to release Ana and Davide from the protective isolation he imposed. Now that we have so many connections to pursue in ever greater detail, using the insights coming from Ana's suggested names and backed by Emilia and Caterina's hard data, our investigations can progress along more conventional paths."

Ana, Caterina, Emilia and Davide sat stunned. This was unexpected. None knew what to say. The various permutations of what could happen percolated through their respective brains. Would Emilia and Caterina continue their Grand Tour? Would Davide and Ana stay at ORS? Would ...? The possibilities overwhelmed.

Tuesday: Sala de lo Penal, Madrid

Salvador tried to conceal his nerves. His lawyer was not fooled but nevertheless sought to soothe him.

"Remember, Señor Corcuera, you are here only as a witness, as a
testigo
. You are not
imputado
, accused of anything. From what you've mentioned, there's no reason to think this is anything more than routine."

"Haven't you seen the newspapers, television, the radio? All they can talk about is who's next and why. Plus look at what happened to the Cardinal Archbishop, Fajando of Opus and the ServiArquitectos people. They arrived as
testigos
and left as
imputados
."

"I know. But in most cases there's little to fear at this stage of proceedings. In your case
Señoría
Garibey, and please remember to call him that, is looking for information rather than to indict."