While the current director of the International Monetary Fund (IMF), Christine Lagarde, avoided prison time despite being found guilty of negligence in a high-profile fraud case, one of her predecessors has not been so lucky. Rodrigo Rato, director of the IMF from 2004 to 2007, was just recently sentenced this past Thursday to 4.5 years of prison by a Spanish court for his misappropriation of bank funds, i.e. fraud. Rato’s conviction followed a lengthy trial where he and 64 other executives and former board members of the failed Spanish bank Bankia and its founder bank Caja Madrid.
Rato is probably the most high profile of all those implicated in the case as he served as Spain’s economy minister and was a leading figure in the ruling People’s Party before taking on the IMF’s top position. Following his departure from the international banking institution, Rato chaired Bankia for two years just before it was bailed out and nationalized by the Spanish government in 2012. The bail-out ultimately cost €19 billion. The former chairman of Caja Madrid, Miguel Blesa, received an even harsher sentence than Rato, receiving a total of six years in jail – also for the misappropriation of bank funds.
The Bankia case is one of several investigations involving the corruption of Spain’s rich and powerful. For instance, last week, the Spanish king’s brother-in-law was found guilty of using his royal and political connections to overcharge and extort regional government through public contracts. However, the Bankia case is arguably the keystone of these investigations as Bankia’s collapse and bail-out are considered emblematic of Spain’s nearly-decade-long financial crisis. These cases, collectively, are said to be seen as a test of whether or not the Spanish elite are accountable to the law, which may have been a factor in Rato’s sentencing.
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