A massive party financing scandal rocked the Partido Popular last week. El País published documents purporting to show that senior party figures, up to and including Mariano Rajoy, systematically accepted payments over a prolonged period of time from a secret party slush fund. The overwhelming documentary evidence has been met with a flat out denial on the part of the PP and the government.
The revelations have prompted a wave of outrage. Faced with a double scandal – a party-financing scandal (supposedly confined to the past) and the government’s scandalous non-response in the present – most popular attention has centred on the issue of political corruption. In other countries the Rajoy government would have already fallen, yet here he hangs on; Spain, as they say, is different.
So how, exactly, is Spain different? I don’t think it’s just a question of political financing. Party financing scandals are nothing new across the advanced economies of the world. Italian and French politics are replete with historic examples of graft. In the UK lordships are practically up for auction. Even Angela Merkel rose to the top in the CDU by pushing out the old guard over a donations scandal. Over in the United States, they have solved this problem by privatizing their political system in its entirety. Their financing system itself is the scandal.
The mix of private money and politics is inherently risky. Permissiveness when it comes to allowing corporate political donations is something of a norm across Europe. This is not a minor issue. In the Spanish case, the sums being talked about (7.5 million euros over a few decades for construction firms later awarded lucrative contracts) are puny for a trillion-dollar economy. It is worrying to think how about how cheap of a price tag might be placed on democracy. If politics is to regain its supremacy over the financial markets, it first must be inoculated against the possibility of being a tool of the wealthiest donors.
What clearly differentiates Spain from its neighbours is how the Rajoy government has responded: through a total denial and a refusal to answer any questions from journalists. The PP has dismissed the entire incident as a conspiracy designed to weaken them and to weaken Spain. Rajoy’s blustering response is not compatible with an advanced democracy, but his modus operandi is unfortunately congenital to today’s Spain.
This episode clearly demonstrates how a culture of impunity has been built into Spain’s democracy. This impunity is endemic to the current political system because the current political system was built on the back of impunity. During the Transition, Samuel Huntington’s “torturer problem” was dealt with by letting the dictator’s agents go unpunished. A 1977 amnesty law blocked the prosecution of the Franco era’s crimes. The men with the guns suggested to the democrats that it would be better to forget. For a long time, this seemed a convenient bargain. Now, we are cursed with the toxic combination of an unreconstructed judiciary and a government acting as though it were above the law.
If this age of impunity is to come to an end, it will not be on account of a demonstration of guilt. Rajoy will have to be shamed out of office, through a mix of domestic and external actors. It is key to know what the rest of Europe will do about this situation. Can anyone afford to be photographed with the Spanish president any longer? Or are governments only toppled if they do not carry out austerity with sufficient gusto?
Is the Spanish difference tolerable? The man who made “Spain is different” famous was Manuel Fraga, Franco’s Minister of Tourism. He went on to found the Partido Popular and was its honourary president during the years of its alleged regularities.
In the best-case scenario, the European right will turn to the PP and say: it’s fine for you to have been fascists but not alright for you to be a mafia. In the worst-case scenario, they will say nothing at all.
 The alternative is that the country’s leading newspaper published a series of falsified documents coming from the PP’s ex-treasurer. There is no way that this will not end up being a massive outrage.
 Spain is uniquely lacking in transparency when it comes to political financing amongst its neighbours, and this should be fixed urgently. But in the PP case, the alleged payments were secret and so no transparency law in the world would have been capable of detecting them.
 John McMillan and Pablo Zoido’s “How to Subvert Democracy: Montesinos in Peru” is a great read. They chart all of Montesinos’ bribes during the Fujimori era and show that politicians and the judiciary were cheap. Since the bribes were much higher, “[b]y revealed preference, the strongest check on the government’s power was the news media.”
 I don’t think the European People’s Party wants too many reminders of the fact that as soon as the Spanish PP held the organizational reins of the EPP they were instrumental in bringing Berlusconi and his party into the fold.