* Graft scandals deepen public's anger over spending cuts
* Revelations about Barcenas severance pay embarrass Rajoy
* Judge has evidence against former People's Party treasurer
* Barcenas charged with bribery, money laundering, tax fraud
By Julien Toyer
MADRID, Feb 25 A former treasurer of Spain's
ruling party, at the heart of a corruption scandal that has hurt
Prime Minister Mariano Rajoy, was ordered to surrender his
passport on Monday while judges investigate millions of euros he
deposited in Swiss banks.
Luis Barcenas is accused of using his position to take
bribes, evade taxes by hiding the proceeds in Switzerland and
launder money through shell companies, charges that carry prison
sentences of up to six years and fines.
The long-running High Court investigation of Barcenas and a
graft case involving the son-in-law of Spain's king have enraged
Spaniards at a time when deep recession has pushed unemployment
to 26 percent and the government has slashed public spending.
After three hours of questioning Barcenas in a closed-door
court hearing, High Court examining judge Pablo Ruz ordered
steps be taken to restrict the suspect's movements as there was
"a serious risk" he might attempt to flee.
He said he had gathered evidence on the three charges of tax
fraud, bribery and money laundering and that his investigation
could come to an end soon.
In Spain's legal system, lengthy pre-trial investigations
are carried out by examining magistrates such as Ruz. It is not
clear when a trial could start.
Ruz banned Barcenas from leaving Spain, seized his passport
and ordered him to report to a court twice a month.
Barcenas, 55, an avid mountaineer who once scaled Everest,
went skiing in Canada two weeks ago, according to media reports.
Some of these reports said the police suspected he also used the
ski trip to move funds he holds there.
Barcenas's lawyer declined to comment on those reports.
The judge also confirmed he was seeking additional
information on accounts and companies related to Barcenas in
Switzerland, Argentina and the United States.
TROUBLE AT THE TOP
Barcenas left the centre-right People's Party (PP) in 2009
after he was charged with taking money from companies that
overcharged PP mayors to put on events, such as campaign
rallies, then shared the extra profit with the politicians.
Public interest in the case had largely evaporated until
January, when Ruz's investigation revealed Barcenas had Swiss
bank accounts once worth as much as 22 million euros ($30
The High Court judge also found that Barcenas applied last
year for a tax amnesty, instigated by Rajoy to try to boost
revenue, to bring millions of euros in off-shore investments
back to Spain.
Then, El Pais newspaper published extracts from what it said
were secret PP account books that Barcenas kept for almost 20
years, showing cash donations from construction magnates that
were distributed to Rajoy and other party leaders.
Barcenas has denied any wrongdoing and says the purported
ledgers are forgeries.
However, a police report that is part of Ruz's evidence and
that was seen by Reuters, showed that in December Barcenas made
a notarised statement saying he had records of years of
donations made to the party as well the recipients.
Barcenas says the money in the Swiss accounts is from
legitimate business activities, but Ruz's investigation has cast
doubt on that defence, according to court documents which have
been seen by Reuters.
Rajoy has denied any wrongdoing, either personal or by the
party. He has pledged an external audit of PP accounts and put
years of his own personal tax declarations on the official
website of the office of the prime minister.
The Barcenas scandal has soured a public mood already bitter
over joblessness, cuts to education, health spending and public
sector wages, and the 40 billion euros in public funds spent on
rescuing failed banks.
Tens of thousands of homeowners have defaulted on their
mortgages and been evicted from their homes.
A small group of protesters joined dozens of reporters in
front of the court building in central Madrid after Barcenas
entered for the closed-door hearing.
"They are lying to us, and worse than that, scorning us...
Enough is enough, we need some accountability," said Ana, 59, a
civil servant from Madrid who declined to give her last name.