Eugenio Hidalgo used to love wearing his Armani suits and driving his red Porsche convertible along the quayside in Andratx. As mayor of Andratx, a town on the west coast of the Balearic island of Mallorca popular with German, British and Spanish yacht owners, Hidalgo's power was as absolute as that of the Sun King.
Before moving to Mallorca, he had been an officer with the Spanish military police, the Guardia Civil, in the desperately poor region of Extremadura on the mainland. He shed his uniform, tried his hand as a car salesman and eventually discovered the lucrative businesses of real estate and politics. "I won the lottery twice," says this self-made man who joined the conservative People's Party two years ago. But now his string of good fortune has come to an end.
The mayor of Andratx and two of his partners were arrested last November. The island's special prosecutor for corruption has accused Hidalgo of cultivating ties between officials at the building supervision office and building authorities in order to obtain illegal construction permits. He also stands accused of having profited from bribes and ill-gotten contracts for his real estate company.
Fearing that he could destroy evidence and intimidate witnesses, the judges in the Mallorcan capital Palma sent Hidalgo, designer clothes and all, to prison awaiting trial. If convicted, he could face a prison term of up to 18 years.
The case prompted Mallorca's island council to suspend the regional development plan for the town of 10,000. Until further notice, no new development can be approved in Andratx, whose population can easily swell to five times its normal size during the summer vacation season.
Because of the suspension, work which has already been approved is proceeding at full speed, bringing construction cranes and pneumatic hammers to even the most remote corners of the town. Jürgen Linkenbach, 63, from the eastern German city of Erfurt, stands on the terrace of his house on Cala Moragues holding his hands over his ears. "When we bought, they told us this was a nature reserve," Linkenbach complains.
A similar thing happened in another exclusive Spanish seaside resort, Marbella, last April. The regional authorities in the state of Andalusia took the drastic step of revoking the town government's authority and placed Marbella under forced administration. The government's move was prompted by rampant corruption in the town since the early 1990s involving not only the mayors -- including the recently arrested mayor Marisol Yagüe -- but also members of Yagüe's government and earlier administrations, some of whom had forged shady alliances with developers, tourist agencies and lawyers.
The Marbella scandal set an unprecedented anti-corruption campaign in motion throughout Spain. Hidalgo, the small-time king of Andratx, was one of those caught in investigators' crosshairs.
The mayor had acquired property on Cala Llamp, a protected bay zoned to allow only the construction of single-family homes. At Hidalgo's instruction, the town council quickly revised the zoning plan and approved a new development on wooded terrain with an unobstructed view of the Mediterranean: 26 condominium buildings with more than 150 units. This development alone could yield more than €10 million in profits.
"Everyone knew what was going on here. I'm surprised that it took so long to come to light," says film director Dieter Wedel. A native of Hamburg, Wedel sees himself as a victim of the construction frenzy. The condominium development was built directly below his house on Cala Llamp. When he filed a complaint, the police never even responded.
But the authorities have been taking more notice in recent months. Hardly a day goes by without the newspapers reporting new arrests of corrupt local politicians. The trail of corruption stretches throughout the country, from Murcia to the town of Ciempozuelos near Madrid, and from Valencia to Galicia and across to the Canary Islands. More than 100 arrests were made last year alone in scandals that have left hardly any political party untouched.
Part 2: "Spaniards will do anything to own their own house"
With regional and municipal elections approaching in May, political leaders in Madrid are now under pressure to rethink their campaign lists and search for untainted candidates. The Spaniards are angry, giving their politicians extremely low marks in a Europe-wide opinion poll conducted by Transparency International, an anti-corruption non-governmental organization. Only the Italians and Poles hold a lower opinion of their elected representatives.
In 1998, when the conservative government of then Prime Minister José María Aznar liberalized the country's pro-development construction law, a relic from the days of dictator Francisco Franco, the country's municipalities were given license to devise creative local development policies. The new laws allowed communities to raise funds by arbitrarily zoning land for development.
In many instances this became little more than a license to print money -- and it was used enthusiastically. Average real estate prices throughout Spain have increased by 183 percent in the last nine years -- and this despite the fact that there has been more new construction in Spain in the last two years than in Germany, France and Italy combined.
The United Nations in late 2006 took the unprecedented step of sending a specialist to Madrid to investigate the Spanish real estate market -- something that had never happened before in any country of the European Union. Afterwards Miloon Kothari, the Special Rapporteur on adequate housing from the Office of the United Nations High Commissioner for Human Rights, complained that unethical practices are now the norm in Spain. According to the UN report, rampant and uncontrolled real estate speculation has resulted in almost a quarter of the Spanish population being unable to find housing fit for human habitation.
Not unlike in Mafia-plagued Italy, the rule of law appears to be under threat in Spain -- at least in the construction industry, a sector largely responsible for the country's economic growth being higher than the EU average. Complaints filed by citizens and environmental groups, warnings issued by regulatory agencies and court demolition orders are simply ignored.
Many elected officials even pride themselves on their machinations. In one case, the deputy of the recently arrested mayor of the town of Mogán on the resort island of Gran Canaria admitted having bought votes for the People's Party and spied on the commissioner investigating the case.
The daily newspaper El País criticizes what it calls "shameless profiteering" from urban construction and the destruction of the countryside. Paradoxically, democracy has made it possible for a new caste of local politicians to emerge by allowing mayors to serve multiple terms, says political scientist Santos Juliá. Those who manage to solve their constituents' problems -- by whatever means necessary -- are re-elected. "Corruption is a plant that takes root easily," says Juliá.
Jesús Lizcano, an economics professor at the Autonomous University of Madrid and president of Transparency International's Spanish chapter, believes that tolerance of unlawful practices is greater in traditional Catholic Spain than in the Protestant north. Friendships, he says, imply preferential treatment. Another factor is Spaniards' attachment to their home region. "They'll do anything to own their own house," he says.
The surge of economic growth that began when Spain joined the EU close to 21 years ago flushed money into the country. But the Spaniards preferred to invest their savings in real estate than in the stock market. According to Lizcano, it is common to specify a ridiculously low price on a sales contract, because the lion's share of the purchase price is paid in cash under the table -- a fact confirmed by Arno Meuser, one of the many German attorneys licensed to practice in Palma de Mallorca. More than three million properties stand empty because money was invested in them only as a means of avoiding having to pay taxes, says Lizcano.
Both the UN expert and Transparency have recommended to the government that it join forces with the opposition in fighting the Spanish disease of cronyism. The socialist government is already preparing an amendment to the construction law. But Prime Minister José Luis Rodríguez Zapatero has postponed reforming the law that governs municipal administrations until after the elections, arguing that the opposing political parties are unlikely to reach any agreement before then. During a recent event to introduce the Socialist Party's candidates, Zapatero vowed that his government would "relentlessly fight corruption in the construction industry ... regardless of the political persuasion" of mayors or regional politicians. Meanwhile, opposition leader Mariano Rajoy has complained that the authorities are only going after the members of his party.
Despite Rajoy's grievances, in Andratx he had no choice but to look for a new candidate for mayor. The scandal has extended into the government of the Balearic Islands under President Jaume Matas, jeopardizing the People's Party's chances of remaining in power. Matas's interior minister had warned Hidalgo, a fellow party member and protégé of Matas, a few hours before he was arrested. The scandal comes at an inopportune time for the conservatives, who had planned to use the local election as a dress rehearsal for next year's parliamentary election, when they hope to unseat the Socialists.
Meanwhile, Prime Minister Zapatero is placing his bets on fresh faces, and has put forward an independent as candidate for mayor of the Spanish capital. Zapatero hopes that Miguel Sebastián, a banker and Zapatero's economic advisor, as unknown as he is untarnished, will appeal to voters distrustful of professional politicians in the important Madrid elections.
The Socialists failed four years ago in their attempt to take control of the regional government in Madrid. The loss was blamed on two members of parliament who defected from the party when a developer aligned with the People's Party helped them hide during the election of the region's president. Because their decisive votes were missing, new elections had to be called. The conservatives emerged victorious six months later.
Translated from the German by Christopher Sultan