Spanish ruling party denies reports of backhanders

MADRID (AP) -- Spain's governing Popular Party was battling Thursday to defend its honor by denying fresh newspaper reports of regular under-the-table payments to leading members, including Prime Minister Mariano Rajoy.

Party secretary general Maria Dolores de Cospedal, one of the alleged recipients, told a press conference that "we have absolutely nothing to hide," adding that the allegations had produced great indignation among party members.

She said the report was aimed at damaging the reputation of the party and the prime minister but did not accuse anyone of being behind it.

Leading newspaper El Pais published what it called the "secret accounts" of former party treasurer Luis Barcenas, with copies of alleged records from several years ago showing names and amounts received. The money was allegedly paid by businesses, many in the construction sector, via Barcenas.

In a statement, the party denied the existence of hidden accounts or "the systematic payment to certain people of money other than their monthly wages."

Socialist opposition party leader Alfredo Perez Rubalcaba said the case was now so serious that Rajoy himself must give an explanation. Others called for fresh elections and Rajoy's resignation.

The scandal broke when the National Court reported recently that Barcenas amassed an unexplained €22 million ($30 million) in a Swiss bank account several years ago.

Cospedal said the party and each of the members mentioned in the report, including Rajoy, would be taking legal action against media outlets publishing the allegations.

She said the papers cited in the report had nothing to do with the party's accounting. However, she said some of the entries published corresponded to payments made within the group while others were false.

Meanwhile, Popular Party member and Senate president Pio Garcia Escudero said Thursday he recognized a payment shown in El Pais but claimed it was from him to the party to repay a loan.

This is the first time a newspaper has published images of documents allegedly showing the names of party members and the payments they received as well as sheets showing company names and their donations.

Those named in the lists include former ministers Angel Acebes, Javier Arenas and Francisco Alvarez Cascos. The paper said the documents showed that as of 1997 Rajoy received some €25,000 each year. El Pais did not specify whether former premier Jose Maria Aznar's name appeared on the lists but said the initials J.M. did.

The paper said each of the party members listed and the businesses named had denied receiving or making the payments shown.

Many of the payments occurred during Spain's boom years of the late 1990s when the Popular Party was in power and the construction industry made the country one of the most successful economies in the European Union.

The party denies there were ever illegal bonuses or payments and Rajoy recently said he would deal with culprits severely if it were proven to be otherwise. He also ordered internal and external audits of the party's books.

In previous years anonymous donations were legal for Spanish political parties. It remains to be seen whether party members declared all their income.

The corruption scandal is the latest to rock Spain, with myriad cases involving bankers, politicians, town councilors and even the royal family. But it has shocked people more given that Rajoy and his party have demanded enormous sacrifices of Spaniards as the country battles recession and 25 percent unemployment.

Barcenas, who served in the party's treasury for 20 years, resigned in 2009 after he was first named in a National Court probe into alleged irregular financing practices by the party.

His lawyer, Alfonso Trallero, has denied the Swiss account money was illegally obtained or linked to the Popular Party.

Trallero also raised eyebrows when he announced that Barcenas had recently taken advantage of a controversial government amnesty for tax evaders to "regularize" roughly half the Swiss account money, something the Finance Ministry denied.