scandal in Spain troubles the government
have discovered that the chief executives of Spain's Banco Bilbao
Vizcaya Argentaria (BBVA), have been redirecting profits of the
bank into offshore tax havens. The purpose was to increase the
directors' pensions and allegedly bribe Latin American politicians
to gain control of national banks.
and former board members are involved in criminal proceedings.
This has added to the misery of BBVA, which had to set aside $1.2
billion for a possible write-off of losses in Argentina last year.
the pro-business government and the opposition Socialists accuse
each other of covering up.
new CEO, Francisco Gonzalez Rodriguez has fired all executives
implicated in the scandal to clean up BBVAs image. He has
appointed a new board and is also planning to make the salaries
of executives public.
BBVA has $275
billion in assets and controls many banks in more than a dozen
Latin American countries.
the regulators, the shady dealings began in 1987 when BBVAs
branch on the English Channel island of Jersey, BBV Privanza,
started setting up trusts in Jersey and Liechtenstein. These were
meant to finance share repurchases and to shake off foreign predators.
The trusts grew through profits from stock-trade but these profits
were used to less worthy ends.
in 1998-99 went straight to the presidential campaign of Venezuela's
Hugo Chavez to protect itself from nationalisation. Bribes were
also paid to acquire banks in Peru and Mexico.
was also deposited with American Life Insurance Company of Wilmington,
Delaware, in 2000 to increase the pension packages of 22 former
bank board members.
Baltasar Garzon, Spain's top investigating magistrate, took over
the case from the central bank.