Spain: Former IMF head faces trial over credit card use

By Alyssa McMurtry

MADRID

Former IMF managing director, Rodrigo Rato, was greeted with boos from an angry crowd when he arrived at Spain’s High Court in Madrid on Monday for the first day of what is dubbed by local media as the “black cards” trial.

Rato, along with 64 others, is accused of being involved in a corporate credit card scam at Spain’s Bankia Group, in which 12 million euros ($13.5 million) were allegedly spent by executives using “unofficial credit cards”.

These “black cards” were allegedly used to pay for personal expenses such as luxurious restaurants, clothing, holidays and even cash withdrawals at ATMs.

These purchases, made between 2003 and 2015, were allegedly hidden from tax authorities.

Rato, a high-profile member of the Popular Party, served as Spain’s economy minister and as vice president before taking the top spot at the IMF from 2004 to 2007.

He then went on to become president of Bankia from December 2010 until shortly before the bank’s near-collapse in 2012.

To prevent Bankia from failing, the Spanish government provided the bank with a public bailout of 22.4 million euros ($25.2 million), according to Spanish daily El Pais.

Just two days before he stepped down from the Bankia position, he allegedly withdrew 1,000 euros ($1,126) from a cash machine using his card, according to Spanish media.

Rato is accused of overseeing the credit card misuse and having spent 99,000 euros ($111,500) himself.

Anti-corruption prosecutors are seeking a prison sentence of four-and-a-half years for the former politician and banker as well as a fine of 108,000 euros ($121,600), according to Spanish media.

Rato and others deny any wrongdoing. Their lawyers are expected to argue that the credit cards were part of the pay deal for executives.

This is not the first time an IMF chief has had trouble with the law. Rato’s successor, Dominique Strauss-Kahn was acquitted of “aggravated pimping” in France last year.

Christine Lagarde, the current head of the IMF, is also due in court this December over a massive state payout to a businessman when she was France’s finance minister.