Spanish prime minister Mariano Rajoy's government was rocked by a major corruption scandal on Thursday after the publication of documents that allegedly showed him receiving €250,000 that had been hidden from tax authorities.
Rajoy denied the allegations after El País published extracts from what it said were secret accounts for his People's party (PP). But opponents called for his resignation and ordinary Spaniards asked whether those now imposing spending cuts and tax rises in the middle of a painful recession had previously indulged in, or tolerated, systematic tax avoidance.
El País said the documents showed payments from a number of well-known Spanish business people that were then partly used to pay regular supplements to senior party officials over more than a decade. The most recent payments were in 2009.
"The People's party has only one set of accounts and it is clean, transparent and submitted to the official accounting authority," party secretary general Maria Dolores de Cospedal, who said she was also speaking for Rajoy, said. "We have absolutely nothing to hide."
However, former PP deputy Jorge Trías Sagnier has already said that senior party members had received regular payments.
Cospedal, who denied getting payments attributed to her in the documents, threatened to sue El País and any media outlets that repeated the allegations. But all major Spanish broadcasters and news websites were carrying the story on Thursday .
"The party vehemently denies the contents of these documents," she said. "I have spoken to the prime minister and he is calm."
But former senate president Pío García Escudero admitted receiving one of the payments detailed in the accounting books. He said the figure matched a loan he was given, and later repaid, to repair bomb damage to his home after a terrorist attack.
"If the figure relating to Pío García Escudero is true that does not validate everything else that has been published," Cospedal insisted.
"The documents could contain all sorts of things – the truth and things that are not true. They could be reworked, manipulated or cut."
El País said the documents came from a double-accounting system kept by two former PP treasurers, Luis Barcenás and Alvaro Lapuerta. Both men issued denials on Thursday .
Courts are already investigating how Barcenas managed to accumulate €20m in a secret Swiss bank account. The former party treasurer, who was forced to stand down in 2009 as court investigators examined several corruption cases linked to the PP, told investigators this week that he had declared €11m that was previously hidden from Spain's treasury during a tax amnesty declared by Rajoy's government last year.
Amongst those named as recipients of the money in the secret accounts, apart from Rajoy and Cospedal, was Rodrigo Rato, a former finance minister, IMF president and one-time chairman of the bailed-out Bankia bank. He denied receiving the money or hiding income from tax authorities. Some PP sources told El País they thought Barcenas had pocketed the money himself.
Alfredo Peréz Rubalcaba, leader of the opposition socialists, demanded that Rajoy himself explain why his name was in the documents. "This is not just any old case of corruption, but a case that affects regional governments, town halls, [the PP headquarters in] Genova Street and even the government of Spain," he said.
"If this is true, then he must resign," added Pere Navarro, the socialist leader in Catalonia.
A recent poll showed that 96% of Spaniards believe corruption is widespread in politics.
Ordinary Spaniards await another year of government-imposed austerity and cuts in basic services as unemployment hits 26%. The economy shrank by 0.7% in the last three months of 2012.
The government says the economy will start growing again towards the end of the year, but analysts see it shrinking a further 1.5% in 2013, sending unemployment even higher.
Cospedal claimed the scandal would not affect Rajoy's ability to tackle the recession.
