Spanish Prosecutor Seeks Formal Probe of BBVA in Spying Case

(Bloomberg) -- Spanish prosecutors asked a judge to place Banco Bilbao Vizcaya Argentaria SA under formal investigation over allegations it contracted a detective agency to spy on business rivals, politicians and journalists.

The special prosecutor for corruption and organized crime on Wednesday presented a report to a Spanish judge calling for an investigation into allegations of bribery, discovery and disclosure of secrets and corruption in business. The move escalates a scandal that thus far been mainly limited to the media.

The allegations go to the highest level of BBVA. Spanish media has reported that, starting in 2004, former Chairman Francisco Gonzalez personally instructed a detective agency to tap the phones of people, including the deputy prime minister and the economic adviser to the former prime minister, as well as the CEO of construction company Sacyr SA and an executive at rival Banco Santander SA.

“The services carried out implied a repeated encroachment on people’s fundamental rights through personal monitoring and access to their communications or to their bank documentation, which constitutes multiple crimes of of discovery and disclosure of secrets,” the prosecutor said in a statement.

Bribes for Spies

BBVA executives accepted bribes from the detective agency, Grupo Cenyt, to ensure it won the contracts in the first place, the prosecutor said. The bank has confirmed that it hired the agency but says it hasn’t yet found any evidence of wrongdoing in its own probe of the allegations.

BBVA said in an emailed statement that the bank is cooperating with the investigation and that it has passed on “relevant findings” from its own internal investigation being carried out by Pricewaterhouse Coopers LLP and law firms Garrigues and Uria Menendez.

“The condition of being investigated that the prosecutor is seeking, and whose confirmation falls under the judge’s competence, doesn’t imply, in this preliminary phase of the procedure, a formal accusation of any crime,” BBVA said.

BBVA Chairman Carlos Torres this week wrote to employees in a blog post seen by Bloomberg, insisting that the bank’s internal probe, launched more than a year ago, is “progressing at a good pace.”

“As was expected, we have also seen that there are steps being taken in the legal case, with which we are actively collaborating,” Torres wrote. “While the matter is resolved we must avoid prejudging unverified facts.”

The prosecutor asked the judge to reject a request by BBVA to be considered a victim of the possible crimes. The judge has questioned several BBVA executives including former Chief Executive Officer Angel Cano and Julio Corrochano, the bank’s former head of security.

Judge Manuel Garcia Castellon must now decide whether to accept or reject the prosecutor’s petition, which usually takes no more than a week, according to Jordi Roca, head of criminal law at Fieldfisher-JAUSAS law firm in Barcelona.

For BBVA, “it’s much more complicated now,” Roca said. “In matters of corruption, banks can have problems at a regulatory level as well.”

To contact the reporter on this story: Charlie Devereux in Madrid at cdevereux3@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Charles Penty

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