Rajoy, Spain ruling party deny secret payments

El Pais published images of excerpts of almost two decades of handwritten accounts that it said were maintained by People's Party treasurers. El Pais said the accounts showed 11 years of payments to Rajoy of 25,200 euros (US$34,200) a year.

The accounts — which the newspaper said amounted to a parallel unofficial bookkeeping system — show donations from companies, mostly builders, and regular payments of thousands of euros to a number of party leaders.

“The People's Party has no knowledge of the handwritten notes that were published and of their content, and it cannot be recognized, in any case, as this political party's books,” the PP said in a statement.

The statement said the party's payments to its leaders and staff were always legal and followed tax rules. The party also denied that there were systematic payments to people other than their official paychecks.

A spokeswoman from Rajoy's office told Reuters the prime minister stood by comments he has made recently that he has not engaged in improper conduct.

High Court Judge Pablo Ruz, who is investigating a four-year-old corruption case involving the PP, has asked prosecutors to look into the allegations of secret payments to party officials and could open a new line of investigation, court sources told Reuters.

The party has ordered an external audit of its accounts.

The widening corruption scandal over alleged secret cash payments to PP leaders has hit Rajoy's popularity as he struggles with a deep recession, a fiscal crisis that could push Spain into an international bailout, and the eurozone's highest unemployment rate.

“This does not help to calm down the difficult moments that we are going through, economically, politically and the climate on the street. This is a time for maximum transparency,” Jose Antonio Monago, the president of the region of Extremadura, told reporters at a news conference regarding his region's accounts.

A recent poll by Metroscopia showed that 96 percent of Spaniards believe corruption is widespread in politics in Spain, after dozens of cases have emerged in recent years, most notably an ongoing judicial investigation into alleged embezzlement of public funds by King Juan Carlos' son-in-law.

The alleged payments may not necessarily be illegal if the party leaders declared the income in tax statements.

Until recently, Spanish political parties were allowed to receive anonymous donations. However, it would have been illegal not to book those donations in the book's official, regulated accounts, a People's Party source told Reuters.

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