Spain PM vows to stay on amid corruption scandal

MADRID — Spanish Prime Minister Mariano Rajoy said yesterday he had no plans to bow to opposition parties' demands that he resign following the publication of text messages in which he tells a former ruling party treasurer under a corruption investigation to "stay calm."

"I am going to see out the mandate the Spanish electorate gave me," he told reporters at a press conference with visiting Polish counterpart Donald Tusk. "This is a stable government that is going to fulfill its obligations."

Rajoy, who says neither he nor other party figures received illegal payments, did not deny exchanging text messages with now jailed former Popular Party treasurer Luis Barcenas. He claimed the messages demonstrated that the state "was not bowing to blackmail. This is a serious democracy."

A former senator, Barcenas was a top member of the party's treasury for some 20 years until he resigned in 2009 on being named a suspect in a probe of illegal funding of the party.

The mobile phone text messages, published by El Mundo on Sunday, date from before Barcenas was sent to jail. In them, Rajoy tells the former treasurer to "stay calm" but advises him that the situation is difficult.

"Luis, nothing is easy. But we are doing what we can," one message says. "Cheer up."

Barcenas was jailed last month while awaiting possible trial on tax fraud and money-laundering charges after the National Court found he had held some 47 million euros ($61 million) in secret Swiss bank accounts. Speculation has been rampant since then that he might try to drag the party and the government into the scandal.

Both the Swiss bank account and the slush fund probes have rocked the party and the country. They come while Spaniards are coping with harsh austerity measures, increased taxes and tough economic reforms aimed at reducing debt and 27 percent unemployment.

Rajoy boasted that the reforms were beginning to pay off and that he was not about to allow his plans for more reforms to be derailed.

"Let no one think we are going to be distracted from getting Spain out of the crisis," he said.

Barcenas, meanwhile, appeared again yesterday before the judge investigating the alleged slush fund. Leading daily El Pais said he told the judge he gave details of making cash payments directly to Rajoy and party secretary general Maria Delores de Cospedal in 2008, 2009 ad 2010. The private news agency Europa Press said Barcenas claimed to have given 25,000 euros to Rajoy and Cospedal in 2010 alone but admitted there were no receipts.

He also reportedly admitted the authenticity of ledger sheets handwritten by him and published by El Mundo last week that allegedly documented other under-the-table payments to Rajoy and other party leaders.

El Mundo said last week the documents showed Rajoy received at least 42,000 euros in payments while serving as a minister between 1997 and 1999.

Earlier, party leaders strove to defend the party and government.

"The Popular Party has nothing to fear, our books are clean," said Carlos Floriano, the party's deputy national organizer.

"It's Barcenas who is in jail and it's up to him to explain where he got the money in Switzerland from," he said.

Barcenas initially claimed the money stemmed from private business deals. But last week El Mundo cited him as saying the Popular Party has long been illegally funded.

Economy Minister Luis de Guindos dismissed suggestions that the scandal was affecting the county's image economically.

"As regards international investors, nobody has asked me about this," he said, pointing out that Spain's bond prices and stock exchange index had not fluctuated greatly yesterday.