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How the ‘reptile fund’ shamed Andalucia

PUBLISHED: January 11, 2014 at 10:30 am  •  LAST EDITED: January 11, 2014 at 10:39 am
Andalucia, Lead  •  33 Comments


How the ‘reptile fund’ shamed Andalucia

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THE ERE CORRUPTION CASE – INVOLVING THE THEFT OF UP TO A BILLION EUROS OF PUBLIC MONEY – HAS RUMBLED ON SINCE 2011. YET IT IS NOW 2014, ONLY TWO OF THOSE RESPONSIBLE ARE IN PRISON, AND NONE OF THE MONEY HAS YET BEEN PAID BACK. THE OLIVE PRESS TAKES A LOOK AT THE KEY PLAYERS INVOLVED IN THE BIGGEST PUBLIC MONEY CORRUPTION CASE IN SPANISH HISTORY

IN any given weekday for nearly a decade Juan Francisco Trujillo, chauffeur to Andalucia’s former employment minister, would head to a series of Sevilla brothels after work and take a great deal of cocaine.

For most chauffeurs this would be a problem, but not for Trujillo. After all, his boss was with him and in much the same state.

For nine years Trujillo acted as the driver for the Junta de Andalucia’s Employment Minister Francisco Javier Guerrero.

During that time he is believed to have received at least €1.3million illegally, which he spent on property in Sevilla, luxury goods, gifts for friends and family as well as €4,000 on a top-of-the-range grand piano.

But that is not all. In a statement to police, after his arrest two years ago, the chauffeur admitted that he and his ‘friend’ and boss typically spent around €25,000 of public money per month on cocaine and ‘partying’.

According to sources, who have been investigating the so-called ERE case since it emerged in 2011, the pattern saw he and Guerrero – and allegedly other members of the Andalucian government – immersed up to the neck in debauchery many times a week.

This would typically mean leaving the central offices of the Junta in Sevilla for any number of luxury restaurants around the city.

Then after a slap up lunch with vintage wine and brandies, they would retire with cigars to a variety of different ‘Puti clubs’ (or brothels) to score cocaine, and presumably sex.

It was certainly one of the more colourful ways to ‘invest’ the millions of euros that were annually piped in from EU funds in Brussels each year.

This money had been meant to aid the embattled Andalucian economy, stimulate employment and help ailing companies keep afloat.

But tragically to at least some members of the government it simply became a new means to feather their beds.

The man now known as ‘the cocaine chauffer’ is accused of 22 crimes, including forgery, embezzlement, bribery and ‘influence peddling’. His boss, who was awarded bail of just €50,000, is accused of a similar number of crimes.

But Trujillo and Guerrero are just two of the characters in the ERE scandal – the biggest corruption case in Andalucian history. So far over 100 people have been arrested in a case that many believe goes right to the top.

The story begins more than a decade ago, when in 2001 the Junta launched a €721 million fund aimed at supporting struggling firms in Andalucia.

The money was made available to help struggling over-staffed companies make ‘labour re-adjustments’ – ie. redundancies – to improve their competitiveness.

EREs (Expedientes de Regulacion de Empleo) were the payments made to workers being pushed into early retirement or being made redundant.

But, as it has since emerged, laid-off workers and struggling businesses were far from the only beneficiaries from the scheme.

The money (suspected to eventually total up to €1.2 billion) started to be used as a slush fund, appropriately referred to by those involved as the ‘reptile fund’.

This meant that rather than using it genuinely it started to be used to pay ‘commissions’ to friends and, more importantly, pay-off the enemies (reptiles) of the Junta’s key players.

Not properly audited from Brussels, it was cleverly channelled into a range of dark – and largely illegal – payments all ostensibly helping to keep the socialist PSOE bosses firmly in power for nearly three decades.

Some went to fraudulent claims – to people who did not actually work for the companies but were signed up simply to be laid off – while others went to fake companies set up merely to receive funding for fictional staff shake-ups.

This was what the Cocaine Chauffeur’s three companies were set up for and, so far at least, investigators have found 180 other cases of possibly fraudulent ERE lay offs.

Aside from this, Junta members are accused of paying family and friends grossly inflated fees for consultancy and advisory roles.
And even more perversely union bosses brought in to oversee the redundancies also got paid off.

So far prosecutors believe that at least €200 million was taken illegally, while PP party opponents believe the total could end up reaching €1 billion.

As well as implicating the employment minister, Trujillo also described calls from ex President Jose Antonio Grinan encouraging Guerrero “to unclog the delay in subsidy payments.”

Accusations against another former Junta president, Manuel Chaves, followed, while ex minister Magdalena Alvarez was also recently arrested.

Amazingly, all maintain that the payments were completely legal.
It has now emerged that one of the key Svengali figures in the case was Juan Lanzas, the head of the UGT union – supposedly a man of the people.
He is thought to have made €13 million through fixing payments, allowing him to buy 12 houses and support a lifestyle far removed from the workers he is paid to represent.

Charged with five counts of embezzling public funds, breach of trust, forgery, conspiracy and bribery in March, Lanzas was last month released after his family miraculously produced €200,000 in cash to pay for his bail.

But if the story has plenty of villains, at least it also has a hero.

Since 2011 Sevilla Judge Mercedes Alaya has doggedly pursued those responsible, with a quiet determination to see the story reach its conclusion.

Slim, photogenic and a world away from the stereotypical Spanish judge, Alaya, 50, has become the focus of the media’s attention, with pundits and political opponents seemingly obsessed with her physical appearance and choice of clothes.

Writer Antonio Soler described her as ‘judge porcelin’ because of her striking features.

But as the case has developed, and Alaya has brought more and more of those suspected into the focus of the investigation, her image has changed.

‘Judge porcelin’ has become ‘The Iron Lady of Spanish Justice.’
In fact the ERE scandal only emerged because of Alaya’s work during an extortion trial – called ‘the Mercasevilla case.’

In 2009 a Sevilla company – Mercasevilla – was accused of paying bribes in order to secure the planning permission for a new catering school.

Alaya’s pursuing investigation revealed individuals receiving EREs, on behalf of Mercasevilla, despite never having worked for the company.

The judge pushed the investigation and the story has continued to unravel since.

And as the scandal has grown, so has Alaya’s reputation.

Fan clubs have been established and her facebook appreciation page has more than 40,000 fans, though Alaya herself said that the idea that she is the focus of the trial ‘appalls’ her.

She has now dragged seven senior members of the Junta into her Sevilla court, and dared to implicate two former presidents. Many believe that the most recent, Grinan, stepped aside earlier this year precisely because of his close links to the scandal.

The investigation is now thought to be approaching a climax and has expanded beyond Andalucia, to include individuals in Madrid and Barcelona.

But despite being the biggest political corruption case in Spanish history, there are no guarantees that those responsible will ever actually face prison.

If the will exists to pursue the case – which in the context of the scandal is not necessarily a given – then there is no telling where it will end.

As things stand, none of the money has yet been paid back and only two of those responsible – Maria Vaque and Eduardo Pascual – are still behind bars.

Every senior member of the Junta implicated – as well as the cocaine chauffeur – will be free to spend Christmas with their loved ones.

The party may have ended for Trujillo and friends, but their come downs have yet to begin.

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Reader Comments »



spain13

January 11th, 2014 2:38 pm

Gotta love how these pigs rob with impunity. Crime pays in Spain and no one is naive enough to believe any of the guilty figure will spend much or any time in prison. Maybe, at least, the EU will get its head out of collective behind and quit sending money.

Max Romero

January 11th, 2014 3:38 pm

Thanks for a crackingly good article. Has your contributor thought of submitting it to the Guardian?

margaret girgrah

January 11th, 2014 4:20 pm

Thank you Mercedes Alaya , its about time that these corrupt politicians and others have been investigated .
They should not have been granted bail either . Also their properties should be confiscated and sold to get back some of the money that they squandered ,it is no wonder that the country is in such a mess right now ,this kind of thing has been going on for years ,and who is paying the price , the honest workers who now have to take pay cuts ,while the cost of living in this country is sky rocketing .Electricity again going up this month ,this will be the 5th increase in less than a year
. Banks are charging us for keeping and using our own money .When is it all going to stop . These corrupt fat cats are living in luxury while we innocent people are suffering daily. There has to be some reprisals for their actions .

Max Romero

January 11th, 2014 4:21 pm

Just a thought….why isn’t Seville full of EU lawyers and accountants trying to get their money back?

mark

January 11th, 2014 6:22 pm

This case just makes me sick to my stomach, this should to translated into Spanish and posted to every house in Andalucia. I own a small business and have struggled to stay afloat during these difficult times while staying on the right side of the law. Crime really does pay in Spain and what makes it worse the people don’t give a shit or the thieves are not brought to justice or force to pay back what they stole

spain13

January 12th, 2014 11:11 am

The fact is that corruption is so interwoven in the Spanish DNA that it´s nigh on impossible to root out. The Spanish football league is being investigated by the EU as is the president of FC Barcelona. How many millions did the president of FC Seville make off with? On top of that there´s the currrent corruption scandals with the royal family, the ruling PP (Barcenas, etc..), unión leaders, the entire community of Valencia – the list goes on and on seemingly without end. And this is the stuff that makes the papers. Any Spaniard will tell you the ¨small¨ scale corruption is a fact of life here. Most estimates put the underground economy at almost a third of Spain´s gdp. You won´t win many points socially for saying so but the average Spaniard also bears responsibility for the shameful state of the country – not just the politicians.

Stuart Crawford

January 12th, 2014 12:47 pm

Surely you know that all of Spain is always sunny, everything is cheap and life is lovely, there are no problems in paradise.it’s all lies this article.

Your first sentence is spot on of course and that’s the root of the problem. It’s no good highlighting the elite’s corruption, none of it could happen without the acceptance and connivance of the ordinary Spanish.

That's rich, Cricket

January 12th, 2014 12:57 pm

This should be published as a “From our own correspondent” piece on Private Eye

Anthony

January 13th, 2014 1:57 pm

Thanks for laying out the background to this case, its a very interesting read but in an article on fraud and corruption the following sentence is relevant…. because…..?

“Slim, photogenic and a world away from the stereotypical Spanish judge, Alaya, 50, has become the focus of the media’s attention, with pundits and political opponents seemingly obsessed with her physical appearance and choice of clothes”

How old is Trujillo and what does he normally wear?

What does the media make of Lanza’s overall appearance?

Does Jose Antonio Grinan ‘take a good picture’?

Nice to see that as well as complimenting Alaya’s competence and determination you also found time to pass judgement on her appearance….because that’s so relevant.

BigJon

January 14th, 2014 10:33 am

we are just hanging on with our business. Many others around [my neighbourhood] have closed down. A few more last week because they were caught selling cigs!
Jan this year saw the introduction of YET MORE TAXES, so we cant afford to employ half our staff. And as we cant afford the ridiculous redundancy payments, the others are on dodgy (but officially recommended) contracts.
60% unemployment. a Billion euros stolen.
Sometimes i wish i didnt care, and just stole like everyone else…

spain13

January 14th, 2014 1:22 pm

Sorry BigJon. I feel your pain. I worked as a visiting profesor in Madrid for six years and finally threw in the towel last year after being made redundant. It doesn´t make the papers but the Spanish University system is rife with corruption as well. Most of the spanish professors in my department weren´t at all qualified – rather were hired because a family member got them the job. It´s also very common practice to falsify advanced degrees. In fact, the director of the spanish language department had no university qualification whatsoever yet was given the post through ¨enchufe¨ that I became very familiar with. I could go on but suffice it to say corruption in Spanish Universities is so commonplace it is barely noticed. I wish someone would have told me before I accepted the position. Apart from the day to day commonplace corruption over 30 percent of spanish people drop out before finishing high school. It makes one wonder what will become of country in which the education system is such a corrupt disaster? I used to think that the billion euros could have been used to build schools, contract educators and invest in public works. But now I think it would gone ¨dirty¨ as well. In short the fish stinks from the head down and as I said before the average spanish person is as much to blame as the politicians. I, for one, left the country several months ago and in no way regret my decision. Good luck.

Liam Kirkaldy

January 14th, 2014 1:55 pm

Anthony – I was asked to write an overview of a fairly long and complicated case. Alaya is a big part of the case, I would argue it would not have been pursued without her specifically and, sadly, the media circus around her appearance (discussing it in quite different terms to my own choice of ‘photogenic’ by the way) has been a major part of the way events have been covered. I was intending to criticise sleazy coverage, not add to it.

As for the corruption side of things – it depends how you look at it. No doubt corruption exists in the south but at least it is being investigated. In my opinion, plenty other places – including the UK – have been guilty of letting alleged corruption be swept under the carpet.

Anthony

January 14th, 2014 5:05 pm

Thanks for the comment Liam, very much appreciated and I accept your point that your reporting differs greatly from Spanish mainstream media.

That said, I still think the piece stands perfectly well without any mention of Alaya’s appearance, or just a mention of Spanish Media’s seeming obsession with her appearance without adding a judgement of your own, but that’s just my view, one out of many I am sure.

Still want to say thanks for the piece as a whole though as it helped me get a straighter picture of what’s what in this case when following other sources is confusing, especially if you come late to the party as I have done.

I’d genuinely like to see more frequent and similar ‘breakdowns’ of the (uhnfortunately) numerous corruption scandals that rumble on.

Mark

January 15th, 2014 9:47 am

Big John i feel your pain as i am also a victim for following the law, i often wonder if i went off the radar cancelling all work contracts, stopped paying my stamp and retentions etc how long i would last without been caught, judging by what i see i would think years

BigJon

January 16th, 2014 10:46 am

Its good to hear other ‘real’ comments. Its hard enough being in the minority (proper licenses, paying taxes, etc) amongst a general population who dont follow any rules. There are soooo many businesses around [here] that are cash in hand & run from home, and the town hall doesnt seem to care.
So its refreshing to hear other experienced people complaining, to hear of Alaya doing whats right, and others fighting the good fight.

And to OPress, thanks for the article.

Here’s a fun suggestion, put a filter on the comments so anyone who says “ah but in your country…” gets redirected to info about Judge Garzon.

Mark

January 16th, 2014 6:11 pm

I hear you bigJon because it is a very frustrating to live here when you are trying to do the right thing. I have been here for 12 years and have never felt so victimized than I do now. I have become a part of the local Spanish community, have a business that is mainly populated by Spanish locals, have legal Spanish staff, pay taxes, have kids in Spanish school, use local supplies and speak Spanish. However I feel now more of an outsider than ever before and suffer also daily be it a new law, new tax, new type of insurance etc. when I want to do something I go to townhall or Hacienda to check what I am doing is right yet they still target me with fines and inspections while other business (in some cases my rivals) get left alone. My gestor just told me this week to down scale and look like the smallest business possible and I will be left alone as he has been told they are targeting businesses that make money as they are more likely to pay fines which just sums things up here in general.

Reap

January 16th, 2014 7:31 pm

Sounds like it is time to leave Mark?

spain13

January 16th, 2014 10:01 pm

Just curious – I don´t mean this sarcastically – why do you continue to live in Spain?

BigJon

January 17th, 2014 11:03 am

“why do you continue to live in Spain”

Why do you continue to run your own country into the ground?
to continue supporting corruption and bigotry? (inaction equals support!)

I’ve invested everything: years of my life, all my wealth, married a local… This is my home.
Obviously the best solution is for us ‘complainers’ to stay and fight to better things, and the “time to leave… / in your country…” commenters to leave.

spain13

January 17th, 2014 1:29 pm

Honest response to an honest question. All one can say is – good luck.

Mark

January 17th, 2014 2:20 pm

I have said this before on here: Spain is a great place to retire but running a small business here is a complete nightmare. Just this week I have had problems with Jazztel, vodaphone, orange and 3 local supplies plus my bank manager shout at me when I tried to cancel an insurance policy which I was in my right to do. The problem always seem the same that they have mis informed me or made mistakes with bills or deliveries, the thing is you can run your business to the best of your ability but always you will depend on others and unfortunately here 90% of the time in my experience you will be let down.

@spain13
I am in the same boat as bigJon where I have invested a lot into my life here and just can’t just walk away, I would happy to retire here but wish up I never had opened a business here

Reap

January 17th, 2014 4:20 pm

All the best Mark, in too deep and similar to me where I would like to sell a property but there is no chance at the moment unless you want to give it away…

Mark

January 18th, 2014 12:02 am

Thanks, I will keep fighting and refuse to be beaten but it is tough

Jon Clarke (Publisher)

January 18th, 2014 5:00 pm

Mark/big Jon/et al, rarely have I read such honest, sad and moving comments in one of our streams.
Ultimately it is tragic that despite all of us working hard ( us at the OP included) we are being singled out for special treatment. Hacienda, social security, town halls, everything…
Everywhere I look / visit I see injustice and everywhere the same issue of corruption raising its head.
It might be investigated more now but it still exists, just in different more subtle ways…
Spain is tribal and the locals will always look after their own first… We must work harder, be more polite, offer more and help each other …
And remember when the economy turns we’ll get our own back … I hope

Fred

January 18th, 2014 7:15 pm

The Spanish Dream is just that. A dream.

Mark

January 18th, 2014 11:33 pm

Thank you Jon, it is a sad state of affairs really but we must fight on, I feel the Spanish have got more nationalistic and aggressive since winning the World Cup and the situation with The Rock hasn’t helped. I mix in Spanish circles but when I bring up subject of corruption or problems I have they tend to get all defencsive or just take the political side they have brought up to follow. Mention Rajoy scandal and PP followers mention the ERE scandal and the other way round with PSOE followers. I often feel the victim of some sort of prejudice which happens more and more these days. An Irish friend who had been coming here for 25 years with his family said after his experiences this summer would never come back. He was ripped off at ever turn from apartment, restaurants, supermarkets and had run ins with a few locals, now he is a such a laid back sort but he said he really noticed a change an almost arrogance or bitterness to a foreigner choosing to holiday in his country, all bizarre.
I know for a fact that inspectors target foreign businesses as they believe they have something to hide and will pay their fines, an inspector told my gestor this! off the record of course. In another case another inspector dealing with another client of my gestor told him he they target this client as he was making money so was likely to pay fines, un like his neighbors who weren’t making money, he had 5 labour inspections in 12 months and fined for something every time.

I have had countless amounts of fines etc and last year picked up close to 5000€ in fines of some sort of another which I can honestly say are injust, people will laugh saying that you won’t get find if you are doing things right but that is not true. I have followed advice taken from local police or town hall for them to fine for doing it wrong when I was following their guide lines.

I have stories that would leave people open mouthed at the level of incompetence and corruption that happens in this country. I run a successful business and now writing fines in as regular overhead along side water and electricity.

Jon if you are ever in Fuengirola contact me and I will buy you a coffee it would be good to chat about some of these things, you have my email address

spain13

January 19th, 2014 10:53 am

I was contracted to work at the university level in Madrid – University of Rey Juan Carlos – to be exact and my experience there was horrific. As I mentioned before, ¨low-level¨ corruption here is equally responsible for eating away at the fabric of the country. From what I could see the only qualification one needed to work in the public sector was having a family member get you a job. One can only imagine what effect that has on the quality of education. In fact, the university dean was investigated for voter fraud after the election and was found guilty. He remained dean until his tenure was finished. At least that made the papers. On a personal level, my Spanish coworkers ignored me completely during the first several months on the job and then stabbed me in the back at every turn. Not knowing much about Spain before I accepted the position, I came with a very positive attitude about the country. You know the image – sun, sangría and smiles. I couldn´t have been more wrong. I generally found Spanish people to be rude, dishonest, incredibly parochial and worst of all – blaming of immigrants for the countries situation. I have a friend who is black visit and he was stopped several times a day and asked (rudely, angrily) for his papers. He will never return. The only sector of the economy that is going well is tourism. I have no idea why. Anyone who has experienced Spanish ¨service¨ knows what I´m talking about. Again, not only do the waiters/bartenders treat you like dirt – you´d damn well better check the bill if you speak with an accent. I came to Spain largely because my (Spanish) wife wanted to move back home. Thankfully, she agrees with me about all the thing I´ve ranted about and more and was willing to leave. Which, in itself is unusual as most Spanish can´t live without their mothers for 10 minutes. Sorry to say it but I´ve lived in many countries around the world and my experience was by far the worst in Spain. In short, it´s a fascist sh&%thole and Spanish people get what they deserve.

Jon Clarke (Publisher)

January 19th, 2014 12:06 pm

Spain 13, don’t know your name but you write well and poetically… Calling all of spain a fascist sh && hole is a bit harsh, but you clearly have some good firsthand facts… While close to the bone do you think you could construct a well argued piece about how corruption even affects the education system … I’m at [email protected]
Let me know…
J

Nadie es profeta en su tierra

January 19th, 2014 12:54 pm

To spain13
Comparing Madrid to Andalusia is like comparing Glasgow to Kent. You cannot generalise in such a way. I dislike Madrid. Talking about accents, try to get a proper job speaking in Andalusian Spanish and you will see what I mean…

To Mark
If it makes you feel better, there are self-righteous jingoist idiots everywhere. Although born and bred in Sevilla, I have lived in England all of my adult life bar two years. Around 2009, when things started to turn bad, I had my car vandalised overnight, £3K worth of damage, for the sin of being a foreigner and in F/T employment. To cut a long story short, I found out the culprit to a low-life three-generations benefit scrounger living around the corner from mine. Moreover, when the BNP membership was leaked online, he and his dad were on the list. I went to the police with the intelligence locally acquired but they seemed more concerned on how had I found out about the BNP membership than anything else. No need to say, it went no further…

Mark

January 19th, 2014 2:55 pm

@nadie es profeta en su tierra
I can appreciate there are idiots everywhere which is just the modern world we live. However I really shocked at the lack of education, self awareness and general ignorance in Andalucia. Everyday I encounter something and it’s not only the locals but also a large percentage of the foreigners that live here. The problems it seem with a lot of locals is they seem to have come into money from being in the right place at the right time. I am lucky enough to have my kids in a private school here (a Spanish one) and the parents of some of the children are just awful, they drive huge cars, talk loudly, swear like troopers and are generally act like something you would expect to see on documentary on trailer trash. The problem is these people are also the ones with the power, they own the land so are landlords, they have friends in high places which gains them all sorts of favors and basically control what to what does happen in the town.

@Jon
IMO this site would benefit from pieces on real people here talking about their experiences of working or setting up businesses. I am sure many have positive tales to tell but would thing they would be heavily out numbered by those who’s experiences have been, shall we say difficult

BigJon

January 20th, 2014 10:03 am

Thank you Mark for the invitation. I’d love to meet up one day for some good ranting and venting… unfortunately no time soon.
And thank you all for the honest comments.
One of the hardest things about living here is the inability to have such conversations.

Local News: the (nice) restaurant on the beach has closed permanently, as the people hadnt paid *any* taxes for 5 years. Its a funny story for the whole town – especially as the beach restaurants are owned by the town hall.

spain13

January 20th, 2014 3:46 pm

It´s hard for me to believe that things could be even more corrupt in Andalusia than in Madrid but I guess anything is possible in Spain. The even funnier part of all this that if you´re an EU citizen from the UK you´ve paid twice. How much of that missing billion (with a B) came from UK taxes and then went up the noses of politicians and whores? Spain´s economic situation is critical but the demographic of the country is terrifying. Most aged populace in the world and its young and talented are fleeing. Believe me, as things continue to decline, Spain will come calling for EU help once again and UK and northern european taxpayers will likely get fleeced once more.

Mark

January 21st, 2014 2:12 pm

@bigjon
Don’t get me start with Los chiringuitos as if Fuengirola they seem to be above the law and considered a bit of a mafia




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