Spanish government 'will not be blackmailed,' says impugned PM Rajoy

Spanish Prime Minister Mariano Rajoy is facing an existential test to his rule, after his former party treasurer appeared in court today and accused Mr. Rajoy of receiving kickbacks from an illegal scheme that traded juicy government contracts for cash political donations.

The case, which has unfolded over several months, is proving a political soap opera, involving the ruling Popular Party's former treasurer, Luis Barcenas, and a secret ledger allegedly tracing the corruption plot run by the conservative PP between 1990 and 2008.

Mr. Barcenas directly impugned the prime minister on Monday, telling a court, "I handed Rajoy and [the PP's secretary general] cash deliveries in 2008, 2009, and 2010." Barcenas and court documents suggest that Rajoy and other top officials received tens of thousands of euros in cash, hand delivered in "brown envelopes," for years.

Mr. Rajoy denied the accusations and reiterated his innocence, arguing that Barcenas was attempting to blackmail the PP into interceding with the courts on his behalf. Rajoy ruled out acquiescing to calls for his resignation. "This is a serious democracy and institutions will not be blackmailed," he said.

Spanish media have reproduced excerpts of the ledger, but Barcenas had previously denied their authenticity. That changed when a Spanish court jailed him last month amid concern he would flee after the courts traced an ever-growing list of bank accounts under his control – stashing almost 50 million euros – that he could not explain.

Evidence suggests that the alleged payouts – which Barcenas also purportedly profited from – were not a one-man operation, but an institutionally-sanctioned scheme to accept and distribute undeclared cash payments to underwrite PP campaigns and enrich its top leadership.

After his imprisonment, Barcenas directly warned that he would not be made a scapegoat, and threatened to implicate the PP and Rajoy if he became a fall guy for the alleged plot. But his revelations are not necessarily believable: Barcenas has already lied to court several times.

Political not criminal

Based on the constant trickle of information coming from the courts, Rajoy is not facing any imminent criminal investigations. But the ongoing investigation into whether the PP sanctioned the illegal financing is ratcheting up the pressure on Rajoy to resign.

Adding further fuel to the fire under Rajoy, a newspaper over the weekend published alleged text messages between Rajoy and Barcenas – long after Barcenas was under investigation – in which Rajoy offered Barcenas moral support. The government has not denied their authenticity.

Opposition parties, which do not hold enough power in parliament to force a no-confidence vote, are negotiating a common response, with demands ranging from public accountability, to Rajoy's resignation (which would lead to a PP replacement), to even snap elections.

More concerning to Rajoy perhaps is the fact that the more hawkish wing of the PP is also suggesting through Spanish media that he might need to leave to allow another party leader to replace him.

The main opposition Socialist Party has demanded just that, while the extreme left wants new elections – though that is unlikely considering the PP's governing majority. But regardless, Rajoy's ability to govern looks increasingly fragile, even if he is not criminally liable.