Spanish Socialists File No-Confidence Motion Against Rajoy

(Bloomberg) -- Spain’s biggest opposition party, the Socialists registered a no-confidence motion against Prime Minister Mariano Rajoy after his former aides were convicted of running a multimillion-euro corruption racket inside the party on his watch.

Socialist leader Pedro Sanchez held talked to members to the party’s federal committee last night before deciding to submit the proposal, a press officer for the group said Friday. Sanchez was scheduled to chair an emergency meeting of the decision-making body at 11 a.m. Madrid time on Friday and is due to make a statement at 12.30 p.m. when it ends.

Rajoy’s government is on the ropes after the National Court ruled Thursday that former party officials had operated an illegal slush fund that helped finance election campaigns as well as amassing almost 50 million euros ($59 million) in a Swiss bank account for the former treasurer, Luis Barcenas.

While the anti-establishment party Podemos has already called for a no-confidence vote, the ploy will hinge on Ciudadanos, the fourth-biggest party in the national parliament. In Spain’s fragmented parliament, the Socialists and Podemos don’t have the votes on their own to defeat Rajoy.

Rajoy, who was called as a witness during the trial, has repeatedly denied any wrongdoing or knowledge of the existence of the slush fund. Even so, the judges said the evidence about the illegal financing scheme was clear and the testimony of Rajoy and other party officials was not credible.

Long Sentences

Ciudadanos has been leading in most opinion polls in recent months after drawing voters from both Rajoy’s People’s Party and the Socialists. Even if Ciudadanos refuses to back the motion, the Socialists stand to gain by forcing its leader, Albert Rivera, to choose sides, potentially costing him support, people familiar with the matter said Thursday.

Twenty-nine former party officials and their associates were sentenced to more than 350 years in jail for their roles in the slush fund between 1999 and 2005. Rajoy became party leader in 2004. A separate criminal trial in connection with the party’s affairs from 2005 is due in the coming months.

Barcenas was ordered to pay fines of more than 44 million euros and serve 33 years in jail. The PP itself was ordered to repay more than 245,000 euros, the amount of funding it received from the scheme.

“The PP faces a civil responsibility not a criminal one,” party coordinator Fernando Martinez-Maillo told reporters after the ruling. “We should make this clear.”

To contact the reporters on this story: Maria Tadeo in Madrid at mtadeo@bloomberg.net;Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Charles Penty, Ben Sills

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