(Bloomberg) — Pedro Sanchez is facing the biggest corruption scandal in his six years as Spanish prime minister, raising questions about how long he will be able to maintain his grip on power.
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At the center of his troubles is a report from Spain’s main security force, the Guardia Civil, which alleges that a criminal network operated within the Ministry of Transport in 2020 and 2021, when it was led by one of Sanchez’s closest allies, Jose Luis Abalos. . Abalos was a top party official and then transport minister under Sánchez, but he was expelled from the party assembly earlier this year as a result of the investigation.
The alleged racket funneled money from state coffers to several companies, according to an 87-page Civil Guard report seen by Bloomberg News. The investigation was first made public last week by the El Mundo newspaper.
The Spanish press has also reported that public money was used to pay a stipend to a woman who was in a relationship with Abalos – although he said no money was involved in the relationship. Abalos himself has not been accused of any wrongdoing. He did not respond to text and voice messages seeking comment.
The corruption allegations hitting Sánchez’s inner circle have pushed the prime minister against the ropes, with the opposition People’s Party, the largest faction in parliament, filing a criminal complaint against his party on Monday.
Sánchez was already in the background about his wife’s business dealings. Begona Gomez is under investigation for possible influence on her relationship with two universities. Sánchez has said his wife did nothing wrong and that the investigation is politically motivated.
In April, pressure on his wife led Sanchez to step away from his position for five days to consider his future before ultimately deciding to move on.
Corruption is a particularly sensitive issue for Sánchez because he came to power in 2018 by exposing corruption in the PP government under his predecessor Mariano Rajoy.
The 52-year-old socialist has since survived in power at the head of a series of increasingly dangerous coalitions and currently needs the support of at least eight different parties to pass legislation.
Despite consistently voting behind the PP over the past two years, Sánchez has become a master at navigating the ideological divisions created by Catalonia’s failed push for independence in 2017.
For example, the five lawmakers of the Basque nationalist group PNV are sympathetic to the PP’s pro-business agenda and could topple Sánchez if they chose to join the opposition. But any alternative majority would have to include the far-right group Vox and that would be extremely uncomfortable for the PNV because of Vox’s fiercely nationalist agenda.
In addition, Sánchez’s Socialists have signed deals to help the PNV govern in the Basque region and several major cities. Withdrawing support for Sánchez would endanger his own power base. Junts’ Catalan separatists are also closer to the PP in terms of their economic philosophy, but would also struggle to align themselves with Vox.
Meanwhile, concerns about the prime minister’s future among the plethora of small left-wing groups backing Sánchez – including the government’s junior coalition partner Sumar – are limited, according to two people familiar with the situation. At this stage, no charges have been filed and appear to be limited to a specific ministry, one person said. Left-wing voters are much more focused on issues such as affordable housing and pay little attention to corruption, said another.
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