Photo Gallery: Money Laundering and Bribery in Marbella

Foto: Daniel Perez/ Getty Images

Spain's Corruption Capital Trial Highlights Extent of Building Boom Sleaze

Spain's construction boom attracted many hustlers, particularly to the Costa del Sol's luxury resort town of Marbella. But now a singer's high-profile trial for bribery and money laundering is exposing the extent of the abuses and turning the city into a symbol of the consequences of an unsustainable growth model.

The Spanish tabloids and private TV stations had waited months for these images: The country's best known folk singer, and currently its most high-profile defendant, on the way to her trial. It seemed as if she were on stage as she walked up the steps to the glass-enclosed entrance of the provincial court on the outskirts of Malaga. It promised to turn into a courtroom operetta, a trial to rival the economic crisis.

The diva kept her face hidden behind oversized black sunglasses, with her long hair tied tightly into a ponytail. Dressed entirely in beige, with a white shawl over her shoulders, she stretched out her head and smiled like a benevolent queen.

Several vans full of police officers had been deployed to shield the defendant from her overzealous fans. "Guapa, guapa," you beautiful woman, they called out to her, as if she had just performed a flamenco dance for them. They held up signs with the photo of their idol, which they had decorated with flowers and medallions of the Virgin of El Rocío. The word "Innocent" was printed on the signs, invoking the patron saint of Andalusia, who is venerated as the "White Dove."

Whether Isabel Pantoja, 55, is truly innocent will emerge over the course of the 49 days of the trial, which is likely to drag on until next spring. The popular Seville native has been charged with money laundering, and the prosecution is asking for a three-and-a-half-year prison sentence and a fine of €3.68 million ($4.64 million).

The investigative judges believe that they can prove she laundered at least €1.84 million, using half a dozen fictitious companies registered in her name, on behalf of her former domestic partner, a former mayor of the luxury resort town of Marbella on the Costa del Sol.

According to the prosecution, Julián Muñoz solicited his then girlfriend to launder a portion of the more than €3.5 million he had allegedly collected in bribes during his tenure as mayor. Muñoz could face seven-and-a-half years in prison and a €7.6-million fine. His former wife, Maite Zaldívar, who also allegedly helped him, could face a similar sentence to Pantoja's. For formal reasons alone, the defense attorneys question the validity of the indictment.

Trail of Corruption

Regardless of the outcome of the trial, the high-profile trio has already played its part in turning Marbella into Spain's corruption capital. It is a symbol of the undeniable consequences of the Spanish disease -- a growth model that was based almost entirely on an unfettered construction boom that attracted hustlers and became fertile ground for their criminal activities.

It was the conservatives, under former Prime Minister José María Aznar, who stimulated the boom in the real estate market, which fostered growth exceeding the European Union average for an entire decade. The liberalization of Spain's land-use laws in 1998 enabled municipalities to increase their revenue by zoning parcels of land as building sites. It was practically a license to print money. As a result, there was more new construction in Spain than in Germany, France and Italy combined.

Of course, bribing officials made it easier for developers to build all the apartment complexes and tourist hotels. A broad trail of corruption wound its way through the entire country, from Marbella to Galicia, and from Valencia to the island of Mallorca. Local politicians from almost all parties collected bribes for issuing permits.

Some business owners would call the offices of local politicians to ask where they should drop off the sacks of bribery money. Agreements were reached over cocktails at nightclubs to determine who was to receive concessions for services like garbage collection in the new developments, circumventing the public bidding process -- in exchange for small contributions to the local town-hall mafia.

In return for the permits to build oceanfront dream houses, a luxury apartment would occasionally fall into the lap of an official who had signed the papers assigning the land to the developer. When the machinations and malfeasance surrounding the Marbella construction boom were exposed in 2006, the Madrid government had to replace an entire municipality under receivership for the first time in the history of the Spanish democracy.

Construction Mafia On Trial

Muñoz and Zaldívar, now divorced, are also in the dock in Courtroom Number 4, at a suitable distance from La Pantoja, who greeted her former lover with a cool kiss on the cheek. Muñoz, with his hair gelled, a wide tie and a white pocket square in his dark jacket, took notes for three hours. His ex-wife, in a garish pink T-shirt, kept looking over at him. Pantoja sat there quietly, gazing at her hands in her lap.

She played the part of the stoic, suffering woman. Her attorney asked the court to drop the charges against her. He accused the investigative judge of unleashing an "inquisition" against his client and her family in 2007 "without any grounds," and of having violated her constitutional rights.

The Pantoja case is actually just a small part of a major case that has been conducted against the Marbella construction mafia for the last two years. Trials are being conducted in the same courtroom, at the "City of Justice" in Malaga, against some 85 former city council members, attorneys who acted as front men, police officers and government officials, as well as a few of the most important construction and real estate developers in Andalusia. The main defendant is the former head of the planning office and subsequent head of the building department in Marbella, Juan Antonio Roca. The court is expected to render a verdict against him soon. He had discovered a true gold mine. Since the beginning of the 1990s, some 7,000 new apartments were built each year in the rapidly growing beach resort, and officials collected their bribes for every administrative deed.

Roca's attorney is also trying to win his acquittal, arguing that her client, as a successful businessman, did nothing but profit from the Spanish real estate bubble. "Sometimes he earned profits that were unscrupulous," she said, but noted that speculation can be "amoral, but it's legal." With these words, she sought to justify the €125 million Roca had made during his 14 years in Marbella.

But in the fourth year of the crisis, facing a European unemployment record of almost 25 percent, the Spaniards have no sympathy for such excesses. Citizens are now deeply outraged over the daily reports in the media, citing the latest details of corruption scandals in politics, the economy and even among associates of the king.

Fallen Idol

The rage of all those who run the risk of losing their homes in the current real estate crisis is now directed at those who filled their pockets in the boom years. Protesters gather in front of courthouses in Palma de Mallorca and Valencia, scornfully berating the defendants as "chorizos," the fatty dry sausage typical of Spain. They cloak their anger in the saying: "No hay pan para tanto chorizo," or "There isn't enough bread for so much sausage."

But many would prefer to forgive their idol Pantoja. The singer is a national deity of sorts, an embodiment of great suffering and great emotions.

The daughter of a flamenco artist and a dancer from Triana, a Romani neighborhood of Seville, Pantoja began her stage career at 13. Since her marriage to "Paquirri," a matador from the legendary Rivera family of bullfighters, the paparazzi have not left her side. Pantoja and Paquirri were the epitome of Spain's dream couple, the beautiful gitana and the torero, and the nation identified with them. When the celebrated bullfighter bled to death in 1984, after he was gored by a bull named "Avispado" in an arena near the Andalusian city of Cordoba, the "widow of Spain" became a legend once and for all. After that, the lyrics of Pantoja's songs were all about her private loves and tribulations, and the entire country sympathized with her.

Her romance with the mayor of Marbella, the former waiter Julián Muñoz, began at the beginning of 2003, when he hired the Andalusian singer to appear in an ad promoting the luxury resort town. At the time, according to investigations by the "Special Unit in the Fight Against Drugs and Organized Crime," her accounts were in the red. During the three years of her relationship with Muñoz, prior to his arrest in their house in Marbella, more than €1.1 million was deposited into Pantoja's personal accounts and those of her companies. Most of the deposits consisted of small sums of about €3,000 in cash, so as to circumvent bank scrutiny under a law against money laundering. In the space of two weeks in April 2004, for example, €293,000 was deposited into the accounts. Pantoja claims that she knew nothing about this.

The prosecution, however, is convinced that she was only too familiar with the "illegal origins" of the bribery payments to her domestic partner. Together, the couple purchased "Mi Gitana," a 650-square meter (6,995-square-foot) chalet in the upscale La Pera development, for more than €3 million. Muñoz also allegedly gave her €350,000 for an apartment in the luxury Hotel Guadalpin complex. As evidence, the prosecution submitted an orange folder marked with the initials I.P., J.M. and M.Z. -- for Isabel Pantoja, Julián Muñoz and Maite Zaldívar -- which contained a certified copy of the purchase agreement for the apartment by one of Pantoja's companies. The compromising documents were found in the offices of Roca, the ringleader of the Marbella bribery cartel.

Outed By the Jealous Wife

Pantoja's attorneys have now submitted invoices that are meant to prove that she did have high legal revenue through a restaurant she owned and a bar managed by her son Kiko. According to the documents, 100 meals of the restaurant's specialty, "Chicken Pantoja," were served at €120 a plate. The next day, the identical meal was already priced at €150. According to local residents, however, the restaurant was usually empty. Pantoja was forced to close it in early 2005.

The singer claims that she was almost always paid in cash for her gala performances at home and in the United States, and that she earned €19 million between 1999 and 2010. Why then, say her attorneys, would she have laundered her boyfriend's money?

The Special Prosecutor's Office Against Corruption became aware of the colorful activities of the mayor and his girlfriend after Maite Zaldívar, the jealous wife, had gossiped about them on a TV show. The jilted wife said that garbage bags filled with money had frequently been dropped off at the family estate. About a year after her boyfriend was arrested, the police picked up Pantoja from her chalet at night in May 2007 and brought her before the investigative judge in Málaga. After spending a night in a jail cell, she was released on a €90,000 bail.

The ensuing multimedia fight for her good reputation is driving Pantoja's admirers to her concerts. Many are also curious to see with their own eyes how the trial, in which she is sharing the dock with her lover and her rival, is affecting her.

Both the audience in the courtroom and the majority of her fellow Costa del Sol residents are convinced that Pantoja will not go to prison. "No pasa nada," or "nothing will happen," whisper the chauffeurs waiting for passengers in front of the monumental buildings of the City of Justice in Malaga. Celebrities have always gotten off scot-free in Spain, they say. Local journalists predict that if she is sentenced to less than three years, the sentence will be suspended.

Meanwhile, seemingly oblivious to the crisis, the fiesta continues in Marbella, where Italian billionaire and former Formula One magnate Flavio Briatore has just opened the first Spanish branch of his Billionaire Club. The complex, complete with a bar, restaurant and nightclub, is on the golden mile between the center of town and the Puerto Banús marina. There appears to be no lack of wealthy individuals willing to pay up to €1,000 for a table reservation. But today the guests drinking the cocktails are Northern Europeans and, even more so, Arabs and Russians, while the increasingly impoverished Spaniards are left outside.

Even the local politicians, once so adept at raking in the cash, are no longer part of the game today.

Translated from the German by Christopher Sultan
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