Home Business Ex-IMF Chief Rodrigo Rato Goes on Trial over Bankia Fraud

Ex-IMF Chief Rodrigo Rato Goes on Trial over Bankia Fraud


Ex-IMF chief Rodrigo Rato and 64 other bankers have gone on trial in Madrid over an alleged credit card racket at Spain’s troubled Bankia bank.

The defendants allegedly used “unofficial” company credit cards for luxury purchases, unconnected with their duties as board members.

Prosecutors say about €12 million ($13.5 million) was spent on hotels, fine clothes, entertainment and travel.

Rodrigo Rato denies wrongdoing. Bankia was rescued in 2012 at huge public expense.

Image source Wikipedia

Image source Wikipedia

The unofficial credit card purchases were not declared to the tax authorities. The system allegedly started at Caja Madrid bank and was continued by Rodrigo Rato when Bankia was created in 2011.

A member of the governing center-right Popular Party (PP), Rodrigo Rato resigned as head of Bankia shortly before its near-collapse in 2012.

The government bailout of Bankia inflicted losses on 200,000 small investors, who held preferential shares in the bank.

Some of them voiced their anger outside the Madrid courthouse on September 26.

“You wretches! Stealing money from pensioners!” they shouted at the accused as the trial got under way.

Prosecutors are seeking four-and-a-half years in jail for Rodrigo Rato and six years for Miguel Blesa, the former president of Caja Madrid, a bank that was merged with six others in 2011 to create Bankia.

If found guilty, Rodrigo Rato could also face a €2.7 million fine, while Miguel Blesa could face a fine of €9.3 million.

Rodrigo Rato headed the IMF from 2004 to 2007. He also served as Spanish economy minister, and his fall from grace helped fuel accusations that the Popular Party was riddled with corruption.

Prosecutors say the lavish credit card purchases took place from 2003 to 2012 – some of them during Spain’s financial crisis, when millions of citizens suffered hardship and unemployment soared.

Rodrigo Rato’s two successors at the top of the IMF have also been caught up in high-profile court cases.

French Socialist Dominique Strauss-Khan took over from Rodrigo Rato in 2007 but resigned in May 2011 to defend himself against charges of attempted rape in New York. Prosecutors dropped the charges later that year, then DSK reached an out-of-court settlement with the hotel maid who accused him.

DSK’s successor at the IMF, Christine Lagarde, is to go on trial in France in December over a state award of €285 million in damages to tycoon Bernard Tapie when she was finance minister.

Christine Lagarde is accused of “negligence”, but denies any misconduct.

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.