Former Director Of IMF Gets Prison Time For Fraud
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Rodrigo Rato, former Director of the
International Monetary Fund, was sentenced to four years and six months
in prison last Thursday by a Spanish Court.
Credit – Europa Press
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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