One of the greatest political corruption scandals Spain has ever known began unfolding on our little holiday island in summer 2008. It started quietly and went completely unnoticed. Unlike the Gürtel affair, which made international headlines, “Operación Unión“, or “Operación Jable“ as it has been called from 2010, has remained relatively unknown abroad, possibly on account of the complexity of the case and the protagonists’ lack of national stature. For Lanzarote, though, the events have been of immense significance: for the first time the island‘s long history of abuse of office, bribery and wasted public funds has been challenged, and a huge stop sign planted in the island‘s volcanic ground: 30,000 files have been opened, charges brought against a hundred politicians, businessmen and others, some of whom were taken into police custody (with some remaining there today). It is their fate that will play some part in the clean up here, slowly but surely. That, at least, is what everyone here fervently hopes.
The first part of the drama is set in the period
from the middle of 2008 to April 2010, and deals with around thirty people and their complex entanglement in Lanzarote‘s biggest ever corruption scandal. Sentence has yet to be passed in these cases, so we need to apply the word “allegedly“ to all comments referring to them. This is not just a requirement of political correctness but of the presumption of innocence (presunción de inocencia) often invoked these days.
The Onion King
There‘s hardly a public office on the island that hasn‘t been held at some point by Don Dimas Martín Martín (born 1948, the “historic leader“ of PIL – the Lanzarotean Independent Party) – he even became President of the island. Of all the offences a politician could possibly commit, there is hardly a single one he hasn’t been found guilty of. He‘s been to prison many times, and he‘s there now. Like many politicians, and not just here, he exudes a formidable lack of understanding of the democratic order. What is even more impressive is his complete refusal to learn: the records suggest that right up to the last moment he was still brazenly conducting affairs from his prison cell, ordering his lackeys about – people who had helped him amass a fortune the exact size of which was still unknown until April 2010.
He decided to become a politician in the days that the democratic system was still taking root. Back then it was still acceptable for those in power to manipulate their underlings by bribing them when, for example, they wanted a house built. Another example would be when corporate tenders were being put in for district cleaning - nothing happened without a substantial amount of palm greasing. What‘s more, the whole process was considered to be legitimate practice. No one had anything approaching a guilty conscience about any of it. It was the god-given right of politicians at all levels of the political hierarchy to make money on the side – their salaries alone weren‘t enough to finance the dolce vita, at least not Lanzarote-style.
Don Dimas earned the nickname “Onion King“ many years ago, when he took a load of onions that the local farmers couldn‘t sell and tried to ship it for sale in Morocco. The whole deal never made a penny, but his reputation grew enormously among a population where illiteracy was still not uncommon. A man who came from humble origins himself had shown an act of kindness towards the ordinary people: he was the one who understood them. With a man like that, they reasoned, it must surely be okay to turn a blind eye (or both) from time to time.
Where did all that money come from?
The way to make some extra pocket money might go something along the following lines. Arrecife, a capital city with a rubbish problem, contracts a businessman to dispose of the waste. He does this willingly – it is a big contract, after all. The City councillor, who at some point is going to have to pay the contractor, then delays making the payment which, in this case, had now reached one and a half million euros. He does this in order to let it be known to the honourable entrepreneur that he would be happy to pay him the money he owed if the businessman would be prepared to leave a briefcase containing a certain sum, say ten per cent, in a discrete place.
The logic of the crook was the norm: “I‘ll pay you what I owe you, but you‘ll have to make it worth my while.“ It had become the accepted behaviour for politicians from almost all parties.
Señor Martín was not the only one being decidedly active in finding ways to torture businessmen – offences likes corruption, subsidy fraud, money-laundering, abuse of office and bankruptcy fraud were cropping up all over the island like stinging nettles on a muck heap.
Quite suddenly the ex-Mayor of Yaiza, José Francisco Reyes, came into possession of a yacht, and somehow managed to spend 700,000 euros on all sorts, yet despite his best efforts remained unable to recall how he had come by such an amount of money. Then there was the case of Lleo, a businessman and lawyer. He wanted to palm off a property he‘d built to the Lanzarote
Chamber of Trade and Industry for 14 million euros. A 250,000-euro bribe for the Chamber‘s treasurer was supposed to make sure the deal went through. In early summer 2008, Lleo even more brazenly attempted to bribe Carlos Espino, the leader of the PSOE (roughly the Lanzarote equivalent of the Labour Party) and right-hand man of Manuela Armas, then President of the Lanzarote government.
Espino was offered two per cent of the revenue from the sale of housing Lleo planned to build in Playa Blanca, on condition that he mislead his own party comrades and get them to approve the project.
This was very tempting for a politician who can only afford a small car and has a family of six to feed. 2.5 per cent of 18 million would have been 450,000 euros. But Espino stood firm, let the Guardia Civil put a wire on him, and set the ball rolling in the biggest police operation the island has ever seen. For more than a year, phones were being tapped all over the island, and 10,000 files of transcripts went into the archives.
May 25, 2009 heralded the second phase of Operación Unión, when it went public with Judge César Romero Pamparacuatro ordering the Arrecife City Hall to be raided and all kinds of documentation confiscated. Dozens of people were charged, their statements taken, some were arrested, including Dimas Martín (in prison), and some were conditionally discharged. This second phase lasted for another year. Throughout this time there were several people who were both active in politics and also involved. As Pamparacuatro had left them completely alone so far they hoped they would remain undiscovered.
On April 19 this year their bubble burst.
Scene One: Black Monday
Pamparacuatro and his team from the UCO (Unidad Central Operativa de la Guardia Civil) had been gathering evidence for a year. Among other things, their investigations led to eight arrests on 19 April 2010. They hooked a really big fish in Isabel Déniz, ex-Mayoress of Arrecife. She was immediately taken into custody and placed in solitary confinement. But there were even bigger
fish still to come.
The morning started with the arrest of Jacinto Álvarez, boss of URBASER, one of Arrecife‘s waste disposal companies.
This whole story has a lot to do with the stink of the rubbish in the streets of Arrecife. It might, then, have been fitting if Àlvarez had thumbed his nose at the photographers recording his arrest, but he chose a more obscene gesture instead.
The next target was another refuse worker, but not a man who‘d get his hands dirty – at least not literally.
Miguel Ángel Leal has a godly name, quite literally one in which an Archangel, an angel and loyalty are all present. He was once the man with government responsibility for the island‘s refuse – something he managed neither angelically, nor even arch-angelically, and certainly with no sense of loyalty towards his constituents on the island. Just like Señor Manuel Spínola, the most recent holder of that post, who had the great honour of being present in person as the UCO agents searched his office in the Cabildo. At the same time, far away in Madrid, they nabbed Stephani Jean Verde, an employee of the above-mentioned waste disposal company. Shortly after, Rafael Arrocha,
Head of the Technical Office at City Hall, received unexpected visitors, albeit ones in smart blue uniforms, as did Julio Romero, head of a branch of the Canarian savings bank.
In short, since early morning, a whole pack of UCO officers had been swarming all over the island, and had searched a dozen houses, two public offices, several company headquarters and even a secret store in a half-built house, from which thirty boxes of documents were removed. In Spínola‘s office the UCO was still busy securing evidence at nine in the evening. Among the documents, officers requested from the secretary of Arrecife City Hall, were some which might shed some light on how the contract for the new city swimming pool was awarded.
The last arrest of the day was that of Francisco Armas. Not only is he President and CEO of HORINSA, a large construction company, but also a board member of ASOLAN, an organisation that lobbies on behalf of hoteliers.
It wasn‘t until the next morning that more information about the background to the arrests filtered through.
Equally black Tuesday
During the Déniz era, the City had a contract with URBASER. As early as February this year, an auditor had concluded, presumably in a euphemistic moment, that this contract was “rather damaging for City Hall“. It was, in truth, a disaster.
Three areas of responsibility fell to the waste disposal contractor: street cleaning, cleaning parks and gardens, and waste disposal.
To each of the three contracts a nice sweetener was attached in the form of a hardship clause, which allowed URBASER to revise its prices every year. The man authorised to approve each increase in cost to the City was Rafael Arrocha, who had been arrested the day before along with Déniz and two URBASER employees.
Arrocha had faced allegations of having revealed building plans for a site in the city to Dimas Martín one year ago. Back then he had already been unceremoniously removed from office by the previous Mayor, Perez Parilla, but had somehow managed to get himself appointed to the same key position in the city administration.
Now Arrocha was under arrest again. “La Voz de Lanzarote“ reported that the city‘s waste disposal costs had risen by a massive 300,000 euros each year, and that in 2008 the city had already amassed debts of six million euros with URBASER, with the company‘s annual takings also amounting to six million euros.
That Tuesday, news also came through that the reason for Isabel Déniz‘s arrest was a little trip she had made to Morocco in 2005 with eight other members of her family, and which had allegedly been paid for by the construction company FCC (Fomento Construcciones y Contratas). Somewhat embarrassing news particularly for the sister of the former Mayoress – Carolina Déniz is a judge and currently the Deputy Minister of Justice in the Canarian government,
and she had accompanied her sister on this trip.
Travel expenses for the trip amounted to around 12,000 euros. Afterwards, FCC was promised contracts with the City, leading investigators to link the trip to the award of contracts.
FCC was part of a consortium of firms (UTE in Spanish) that were supposed to carry out the processing of organic waste at the Zonzamas waste disposal site, another part the HORINSA construction company headed by Francisco Armas. After Armas‘ arrest on Monday, FCC lost no time in denying that they had any connection with him. La Voz de Lanzarote quotes the remarkable sentence stated by them, “There is nothing that this firm has to do with this gentleman. He is not an authorised agent, nor does he belong to the organisation.“
A little later follows: “This consortium was made up of Sufi, which held (...) 50 per cent, FCC had 30 per cent, and the firm which this gentleman belongs to only held 20 per cent. But he (Francisco Armas) was not the Managing Director, management responsibility was held by Sufi, meaning that he cannot be linked to that. He had a 20 per cent stake, that was all.“
They later said that they probably had worked with Horsina after all, possibly also with other firms that had some sort of connection with Armas, but only “as a company that delivered cement“. Two days later the Guardia Civil announced that Armas very likely had in fact been an authorised agent of the consortium. Total confusion.
On 23 April events and news stories were coming thick and fast. Another seven people had been arrested, including Suzanna Martín Martín, a daughter of PIL leader Dimas Martín, Francisco Rodríguez-Batllori, former Canary Island Minister of Employment and Deputy Minister of Justice, and even an actual janitor, Carlos Matías Curbelo Delgado. The latter worked at the mayor‘s office in Teguise – where astonished visitors would often wonder what he was really doing
there. He could always be found standing in the doorway of the Town Hall, cigar in hand, where apparently he would offer land for sale in Playa Blanca to some of the visitors. All those arrested had one thing in common; they were all closely linked to Dimas Martín. It would become clear later that day exactly how. Everyone, including the Guardia Civil and investigating judge Pamparacuatro, had always suspected Dimas Martín of using his political office for personal profit. But where was the money? How much was there? The belief that Friday was that in an effort to hide it he had probably distributed it around his inner circle to people who were at this moment also under arrest. He was using them as front men for fifty properties with a combined value of eight and a half million euros. Accordingly, all seven were charged with money laundering, among other offences.
Another big businessman, Andalusian José María Rossell Recasens, who counts the “Hoteles Playa” group among his properties
and who also owns the “Playa Verde” in Costa Teguise, joined this group of detainees one day later. He is also the owner of a site with a partially completed five star hotel, where building work was halted by court order. The reason? An illegal licence issued by the former PIL mayor‘s office in Teguise. The fact that Rossell was president of the PIL publication “El Maho“ and at the same time worked for the PIL-owned “Televolcán“
TV station was enough to arouse suspicion in 2005 that all was not as it should be with this deal. This was reported to the authorities by the leadership of the PSOE and five years later it became clear just how well founded this suspicion was.
Scene Four: A local farce
On Saturday morning the action finally turns into a surreal island comedy with the beginning of the PIL‘s seventh Party Congress. Fabian Martín, son of Dimas and the island‘s Vice President, urges his small band of faithful followers to leave the Congress “more certain, more confident and more determined“
than ever before. Why? Because, “Like it or not, the future of Lanzarote lies in the hands of the PIL.”
Later that day, his father is arrested whilst in prison for a second time, just as he was almost a year before. That time he was charged with being at the head of an organised crime ring. Now he had to face questioning by investigating judge Pamparacuatro about a fortune amounting to eight and a half million euros, which he was obviously keeping concealed with the aid of friends and relatives. This was particularly uncomfortable, as he had always insisted that he had no money and was therefore unable to pay the 2.4 million euro fine that had been imposed on him for the misappropriation of public funds in the case of the agro-industrial complex in Teguise.
His daughter Suzanna and the other detainees were therefore not only charged with money laundering but with bankruptcy fraud as well. You can be guilty of bankruptcy fraud by helping someone who claims to be unable to pay creditors or fines to conceal their wealth.
Dimas Martín had therefore allowed not only his companions but even his daughter to run into the legal line of fire, whilst at the same time freeing his son Fabian so that he could be elected next day by the PIL supporters as their new leader.
Scene Five: Furious Finale
It was business as usual in the legal system on the Monday and Tuesday following this important congress of the PIL. A few people were conditionally discharged, a few more arrested. Among them, María Jose Docal, trusted Dimas supporter and ex-Cabildo president, who in her office as the island‘s tourism chief had been attempting without success to get the tourist industry up on its feet. Then it occurred to Mayor Reguero in Arrecife that with so many arrests having to be endured by his coalition partners, one or two of the council members might be missing as they were in prison, and Arrecife would be ungovernable if he didn‘t find replacements. Here we should just make a note in the margin that he himself was manoeuvred into office last year by two of the guilty defendants.
On 29 April another event occurred which no one could seriously have predicted.
Francisco Rosa, a prominent hotelier and reportedly one of Lanzarote‘s richest men, was arrested. Rosa is the owner of the Princesa Yaiza Hotel, declared illegal by the Supreme Court of the Canaries, and of the Stratvs Bodega, declared illegal by the previous island government. The Costa Roja construction
project in Playa Blanca – also declared illegal – only involved him inasmuch as he stood to gain the most from its sale.
One of the reasons given for Rosa‘s arrest was the fact that he had once hired Dimas Martín, thus making his release possible, and that he was probably among the people helping Dimas to conceal the 8.5 million. So he too was charged with bankruptcy fraud, and also with forging a business document. Rosa was released two days later on condition that he remain available to the court at all times until further notice. All he had to say when he left custody was, “If you want to call the tune you have to pay the piper.“ He was accompanied by his lawyer, Felipe Fernández Camero – himself no stranger to the spotlight, as he himself faces charges in connection with the illegal licensing of the hotel buildings in Playa Blanca.
This is the closing act of the sad spectacle. Now the confiscated files need to be analysed. Exactly when Pamparacuatro sends his men back into battle against corruption will depend on how quickly they can work their way through the mass of papers.