Fraud allegations have driven a spectacular fall from grace for former IMF managing director Rodrigo Rato, the man credited with Spain’s one-time economic boom and now destroyed by its bust.
The 65-year-old former finance minister was hailed for kicking off a golden decade of growth in Spain’s economy from the late 1990s, and later led the IMF.
Now, six years after the financial crisis started, the toxic fallout from it has landed him in court and turned him into a hate figure for many ordinary Spaniards.
On Oct. 16, a judge questioned him over alleged spending sprees on company credit cards by him and other former managers in the bailed-out finance group Bankia SA.
He had already been questioned on suspicion of fraud in an ongoing probe into the stock market launch of Bankia, which was rescued by the Spanish government in 2012.
He has denied wrongdoing in both cases.
The charges now hanging over him reflect “the great decline, the great downfall of the professional and ethical icon that was Rato,” political consultant Antoni Gutierrez Rubi said.
Then-Spanish prime minister Jose Maria Aznar in 2010 called Rato the “best economy minister” in Spain’s modern history.
However, when asked by reporters about him following the credit cards revelations this month, Spanish Prime Minister Mariano Rajoy would not even speak Rato’s name.
The allegations that Rato and more than 80 others spent a total of more than 15 million euros (US$19 million), reportedly on luxuries such as nightclubs and safaris, embarrassed Rajoy’s Popular Party (PP) and sparked a string of resignations.
“It alarms and outrages us,” said PP Secretary-General Maria Dolores de Cospedal, who just last year had called prominent PP member Rato “the star of Spain’s economic miracle.”
Rato left the IMF in 2007 for “personal reasons” and was later handed the job of managing Caja Madrid, one of the regional savings banks that fused to form Bankia in 2010.
He oversaw the stock market listing of Bankia in 2011, seen as a triumph after the previous three years of financial turbulence.
However, the euphoria did not last.
In May 2012 the government had to nationalize Bankia to save it from ruin.
Spain then had to turn to the eurozone for a 41 billion euro bailout to save its whole banking sector.
Seven months after Bankia was rescued, Rato found himself walking into court for questioning.
Furious customers who said the bank had lost their savings yelled at him: “Thief! Go to jail!”
The scene was repeated last week when he went before a judge over alleged corporate crimes in the credit card scandal.
The court made him pay a 3 million euro bond while it makes further investigations.
“The impact of the charges is much bigger this time round,” Rubi said.
“In 2012 all we knew was that Bankia had been badly managed. Now we know it was badly managed by people with no scruples, ethically speaking,” he said.
The credit card affair has damaged not only Rato’s image, but that of his party ahead of regional elections due next year, Rubi said.
In a previously “unthinkable” move, Rato has suspended his membership of the PP.
“He has no political future,” Rubi said. “There is a feeling that Rato has destroyed his shining reputation. He had a halo of superiority and triumph everywhere he went. Now he has fallen.”
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