Good Practice
Corruption in Spain – questions about tendering process

It would seem we have a lot in the news at the moment about procurement corruption in the public sector. Having just written about corrupt practices in the Ukraine military, we now find ourselves looking at corruption in Spain and recent scandals, and it does pose some serious questions related to the tendering process that any procurement professional must be wondering about.

Top figures in Spain have become embroiled in an investigation into corrupt awarding of public contracts. The Guardian reported that 51 people have been arrested, including public officials, bureaucrats, and business leaders. According to an article in El Pais, a High Court judge said last week that Fransisco Granados, a former high-ranking People’s Party (PP) official, and one of those who was arrested, was at “the core of the criminal organisation.” Grandos was Mayor of Valdemoro between 1999 and 2004 before becoming head of the PP’s Madrid branch between 2004 and 2011. Suspicions arose when it was discovered Grandos had a Swiss bank account between 1999 and 2012, and then withdrew all his money at once. Last week he was sent to prison on preliminary charges of money laundering, criminal association, influence peddling, bribery, misappropriation of funds, abuse of power and fraud.

Grandos and his business partner, David Marjaliza, a constructor and close friend, masterminded a bid-rigging scheme throughout Madrid, Valencia, Murcia and Leon. The corruption ring, which was being investigated as part of the ongoing Operation Punica, is suspected to have unlawfully awarded €250 million in public contracts over the past last two years.

Judge Eloy Velasco said that the Puncia ring awarded contracts irregularly in return for commissions. Energy efficiency firm Cofely, part of France’s EDF Suez, was one of the top beneficiaries of the scheme. A number of constructors have also been arrested, after evidence showed that they paid politicians to make decisions, which favoured their companies. Others arrested include PP’s Marcos Martinez Barazon, who is head of the provincial authority of Leon, and the mayors of Valdemoro, Jose Carlos Boza Lechuga (of PP) and Parla, Jose Maria Fraile (of the Socialist Party).

The involvement of politicians in a scandal surrounding corrupt tendering raises a few questions: how come politicians get to decide who wins a contract? Is there any involvement from procurement professionals, or only politicians? Was the €250 million-worth of public contracts advertised or awarded directly to the corrupt firms?

The Puncia scandal isn’t the only one to have rocked Spanish politicians recently. An article in the Financial Times says that last month Spanish media reported on “phantom” credit cards being awarded by a now-defunct savings bank Caja Madrid to politicians in Madrid. More than 80 officials allegedly spent around €15 million using the cards.

Recent corruption scandals have angered Spanish voters, and will likely benefit Podemos, an increasingly popular leftwing protest party. However, latest polls show that many Spanish voters refrain from punishing corrupt politicians at the ballot box. Both the PP and the Socialist Party have been hit by high-profile corruption scandals in recent years. However, in Valencia and Andalucia, where both PP and the Socialist Party have large support respectively, recent polls show they are still in the lead.

These statistics suggest that Spanish voters are more tolerant of corrupt politicians. Ms Costas-Perez, as quoted in the Financial Times, suggests that the poll results may be down to Spain’s polarised media. She explains that the media will usually focus on the corruption scandals that plague their political opposition. Perhaps the wide division between the right and left in Spain means voters are more likely to remain loyal to their own political party, than to punish them for any of their mistakes.