Montemadrid Foundation

Fundación Montemadrid is the brand under which the Fundación Obra Social y Monte de Piedad de Madrid is presented, a Spanish foundation based in Madrid and whose objective is to the development of social work and the management of the cultural heritage it possesses, as well as the operation of several montes de pieta in some Spanish cities.

The foundation is heir to what was Caja Madrid (Madrid Savings Bank and Monte de Piedad), the oldest of the Spanish savings banks, founded on December 3, 1702 as Monte de Piedad by the Aragonese priest Francisco Piquer Rodilla. It is the second oldest company in Spain after Codorníu (founded in 1551). The savings bank existed until December 14, 2012, which was transformed into the special foundation Fundación Especial Caja Madrid. Later, its name was changed to the ordinary foundation Fundación Montemadrid.

History

Monte de Piedad in Madrid

Founded by Father Francisco Piquer in 1702, the Monte de Piedad of Madrid is one of the oldest Spanish montes de pieta, created in the likeness of the Italian montes de pieta and joined the small group of montes de pieta that existed or they had existed in Spain until that date where they included, at least, the Monte de Piedad de Dueñas (c. 1550), that of Toledo (century XVI), that of Málaga (1612), that of San Francisco de Cuéllar (1636) and that of Calahorra (1659).

The purpose of the Monte de Piedad in Madrid was to meet the demands of the social classes most in need of protection, through the granting of free loans, guaranteed with jewelry and clothing. It was a charitable-social institution, protected by the Royal Board of Trustees and individuals who contributed donations and made onerous deposits; No interest was charged on the loans.

Madrid Savings Bank (Caja Madrid)

In 1836, for the first time, the collection of an interest in the loans granted, to cover the administrative expenses generated by the activity of the Monte and to ensure the economic future of the Monte. Under the impulse of the Marquis Viudo de Pontejos, on October 25, 1838 it was founded by Real Orden, the Caja de Ahorros de Madrid, which retributed the deposits received. Its Regulation is approved by Royal Order one year later, on July 17, 1839.

In the following years, Caja Madrid widely expanded its banking activity outside its original area of influence, opening offices throughout Spain. In 2009, the savings bank had 2,113 branches spread throughout the country (the second in number of offices behind La Caixa).

In 1998, the entity changed its name from "Caja de Madrid", a name it had had since the 1980s, to simply being called "Caja Madrid", also modifying its logo, which until then had been the stylized silhouette of a bear. locked in a piggy bank, and from then on only the bear was left.

Social work

The sociocultural work that by law corresponds to the savings banks was carried out in Caja Madrid, through Obra Social Caja Madrid and the Caja Madrid Foundation, in the welfare, social, educational, cultural and environmental fields. In 2005, the total expenditure allocated to carrying out the different Social Work and Foundation programs amounted to 161 million euros. In January 2013, Caja Madrid itself became a foundation, the Fundación Especial Caja Madrid (later, Montemadrid). That year, it had a budget of 31.6 million euros.

Presidency of Miguel Blesa (1996-2009)

Caja Madrid, like the rest of the non-profit savings banks, could not have a professional government, but rather a board of directors made up of "representative organizations of society", so its board was made up mostly of political parties. and unions. In 1996, Miguel Blesa, a personal friend of José María Aznar, was appointed president at the proposal of the Popular Party, and whose appointment was approved with the votes in favor of the PP, Izquierda Unida and Workers' Commissions.

In 2008, Caja Madrid bought 83% of City National Bank, based in Florida for 628 million euros. Along with the purchase of the international entity, Caja Madrid paid 10.5 million euros to the local real estate company Peña Appraisal Services for the purchase of a luxury mansion in Miami, with the aim that the representative of Caja Madrid in Florida, Borja Murube, could reside there, as well as the rest of the directors who had to travel to the city.

During the presidency of Miguel Blesa, in 2007, a scandal related to one of the directors of the financial holding of the savings bank came to light: Carlos Vela. The director had granted a loan to the real estate company Martinsa-Fadesa for one billion euros and in April, a few months after this event, he left Caja Madrid and signed as CEO of the real estate company.

Just one year later, the bursting of the real estate bubble in Spain led Martinsa-Fadesa to bankruptcy, leading to one of the largest bankruptcies in the Spanish stock market, leaving a hole for its creditors, in mostly banks and savings banks, and among which was Caja Madrid, with more than 1,200 million euros. Carlos Vela, after the bankruptcy, left the real estate company and paradoxically was hired again in the Caja Madrid financial corporation that he himself had left. The strong controversy aroused around the director by this fact led him to only a few more months After having regained his position at the cash desk, he presented his resignation.

Presidency of Rodrigo Rato (2009-2010)

In 2009, the process of electing a new president of the board of directors of Caja Madrid was complicated by the fact that there were two candidates who publicly competed for the position: Ignacio González, who had the public support of Esperanza Aguirre, and Rodrigo Rato, with the endorsement of Mariano Rajoy.

Finally, on November 11, Ignacio González resigned his candidacy, thus giving way to the appointment of Rodrigo Rato, which was finally made effective in the General Assembly on January 28, 2010.

That same year, the City National Bank resulted in million-dollar losses, so Caja Madrid injected 233 million euros, buying the rest of the shares that remained in the hands of its founders (17%) and thus controlling 100 % from the bank. A year later it injected 242 million euros more.

Segregation of the financial business (2010)

In 2010, in the midst of the restructuring of the financial system in Spain, Caja Madrid formed a SIP with six other Spanish savings banks: Bancaja, La Caja de Canarias, Caja de Ávila, Caixa Laietana, Caja Segovia and Caja Rioja, which was socially called Banco Financiero y de Ahorros (BFA). Caja Madrid led this union with 52% of BFA's shareholding, followed by Bancaja with 37.7% of the ownership of the new bank, so it was decided that the headquarters of the new bank would be located in Valencia, but the headquarters main operation would be in Madrid. The distribution of dividends for the benefit of BFA to Caja Madrid would provide the capital necessary to maintain the social work of the savings bank.

The assets, banking business and assets of the entity (client portfolio, offices, financial products, capital...), with the exception of some buildings considered historical heritage of Caja Madrid such as La Casa Encendida or paintings and works of cultural value, were segregated in BFA, and this later segregated them in Bankia S.A.

Transformation into a foundation (2012-present)

On June 27, 2012, the nationalization of BFA by the Government of Spain was formalized through the Fund for Orderly Bank Restructuring (FROB), making the state entity the sole shareholder of the bank with 100% of the capital, Therefore, Caja Madrid and the rest of the savings banks that had formed the bank in 2010 were left out of the new structure of the entity and, ultimately, lost control and any relationship with BFA and Bankia.

Having lost any source of income after the departure of Caja Madrid from Bankia, the Government of Spain, following the recommendations of the European Commission, legislated a regulation by which savings banks had to be transformed into foundations under the protectorate of the corresponding autonomous government, so that it was possible to maintain the social and cultural work that the savings banks had been carrying out.

Thus, by public deed dated December 31, 2012, Caja de Ahorros y Monte de Piedad de Madrid was transformed into a special non-profit foundation and merged by absorption with the Caja Madrid Foundation, renamed Fundación Caja Madrid. Caja Madrid Special, under the protectorate of the Government of the Community of Madrid.

Subsequently, it became an ordinary foundation and was renamed Fundación Caja Madrid.

On July 14, 2014, it was announced that Monte de Piedad de Madrid and Banco Santander had closed an agreement by which the bank took charge of the financial management of Monte de Piedad de Madrid, making it available to clients del Monte its office network since July 21 of the same year.

Finally, it changed its corporate name to Fundación Obra Social y Monte de Piedad de Madrid (Fundación Montemadrid).

Scandals and legal cases

Gescartera Case

In 2012, the National Court forced it to pay 12.22 million euros for its civil liability in the Gescartera Case in addition to the interest accrued since January 14, 2001, the date of its intervention.

City National Bank Case and Blesa Case

The City National Bank case was opened in 2013 as a result of a popular accusation against Caja Madrid for the Marsans Case, in which all the members of the Financial Committee of Caja Madrid were already accused - among them, Carlos Vela - for the loans that the savings bank had granted under dubious solvency conditions to Gerardo Díaz Ferrán —who had been former president of the CEOE and was charged with a corporate crime for his involvement in the bankruptcy of Viajes Marsans—. Carlos was also charged within the investigation Vela for corporate crime and document falsification, due to the credit granted to Martinsa-Fadensa.

As a result of this case, the judge decided to investigate the purchase by Caja Madrid in 2008 of the City National Bank of Florida. The audits carried out on the American entity stated that more than double the market value had been paid for the entity, and that its mismanagement had led to losses of more than 570 million dollars in just two years. According to the audit, decisions were made “under a dangerously very permissive and reckless risk admission perspective.” The purchase, according to the investigation, had been ordered despite warnings from the Bank of Spain and the United States government. All of this led to the accusation of the person who had been the president of Caja Madrid during that time, Miguel Blesa. Finally, Judge Elpidio José Silva orders his imprisonment for this incident on May 16, 2013, which can be avoided by paying bail of 2.5 million euros. Miguel Blesa spent only twelve hours in the Soto del Real de Madrid prison, paying bail the day after he was admitted.

Just two weeks after leaving prison, on June 6, the magistrate in charge of the case against Miguel Blesa received a report from the Civil Guard in which hundreds of corporate emails from Caja's top management were seized Madrid, which were included in the case summary. Among them were some exchanged during the purchase of the Bank of Florida that caught the judge's attention, such as one sent by the bank's also accused general financial and risk director, Ildefonso Sánchez Barcoj. In said email, sent by Ildefonso to Miguel Blesa, it was said: "As you know, at the time we covered not only the entirety of the two purchases, but also 100 more kilos in case something became available." to which Blesa replied: «It was not only the increase in price, but the authorization limit by the Community of Madrid. Let someone get involved, we will give them a good pass." From these emails it was deduced that both intended to evade any type of public control during the administration, and had also reserved 100 million more for the purchase of another entity without it being able to do so. be supervised or controlled by public authorities or the control bodies of Caja Madrid. That same morning, the magistrate again summons Miguel Blesa to testify urgently regarding said emails, and after hearing his statement, the judge immediately once again orders his admission to prison, this time without bail.

Fifteen days after entering prison, the Provincial Court of Madrid, with the criteria in favor of the prosecution, declared null the judicial decree that sent Blesa to prison, believing that the judge had reopened the case without having new evidence of sufficient significance to dictate a new admission to prison and the accused was being punished twice for the same reason. The defense of the accused, the prosecution and the Provincial Court also maintained that the emails should be excluded as evidence since they were a private document that had been obtained without the owner's consent. The judge defended this measure since he understood that Caja Madrid's corporate email accounts were not private or intimate documents owned by its users, but rather they are property of the savings bank and are intended exclusively for professional use, so they did not constitute a attack against the privacy of the accused.

After his departure, Miguel Blesa declared to the media that he felt he was a victim of personal persecution by Judge Elpidio José Silva, for which his lawyers finally filed a complaint against the judge for having received impartial treatment and for prevarication after being sentenced to prison without real judicial motivation. For this reason, the Provincial Court recused Judge Silva from the case while these facts were being clarified, and Judge Fernando Andreu, who was already in charge of the Bankia Case, remained in charge.

Email scandal

In November 2013, an email arrived at the headquarters of Party From this source, the party received an archive of more than eight thousand emails sent by Miguel Blesa between 1996 and 2009 (the time he was presiding over the fund). Many of them were those that Judge Silva had included as evidence in the case and that had subsequently been excluded, but that did not come to public opinion as they were under summary secrecy. Party to the journalists of the digital newspaper elDiario.es, which brought this case to its front page and made said emails public. The set of emails contained messages exchanged between Blesa and very relevant figures in politics and business.

The publication of these emails caused a great media scandal as little by little the information contained in them was revealed. Some stood out in which Miguel Blesa spoke about the sale of preferred shares that Caja Madrid was selling at that time and which were later revealed to be a scam to its clients. In one of them Miguel Blesa responded: «1.3 billion euros in a single day!!!!! How barbaric. And we had deceived the clients. What I have learned is that, if the unions don't like it, it is probably a good product." Another series of notable emails showed how Caja Madrid maneuvered in Iberia LAE—being the airline's reference shareholder box at that time—to prevent a group of Spanish businessmen from buying the airline and it finally ending up being merged with British Airways. Another email that caught the attention of the media was that Blesa had threatened the president of the Telecinco television channel with withdrawing Caja Madrid advertising on his network as a result of a joke about the savings bank that had been made in a fictional series..

The emails also demonstrated how Blesa personally assisted and mediated to facilitate loans and mortgages under advantageous conditions to politicians and their families. Among them, the emails talked about how Blesa had mediated in favor of the former minister José Barrionuevo or a relative of Esperanza Aguirre. There were also emails between Blesa and José María Aznar Botella - son of the former president of the government of Spain - in which he recriminated to Blesa for not having accepted that Caja Madrid enter into his father's million-dollar business: "With the hair he has left for you, and there have been many, what you have done or have not done seems unpresentable to me."

The rest of the emails brought to light the luxurious life that the president of Caja Madrid led, in which he discussed with his colleagues his many trips around the world, hunting, buying jewelry and luxury cars, among others. One of them revealed that Caja Madrid paid Miguel Blesa and the senior managers of the Caja for a luxury wine list that included bottles valued at more than 600 euros. In said email, Ildefonso Sánchez Barcoj wrote to Blesa: «President, these are the wine lists that we have prepared [...]. There is one for you with fine wines (Château d'Yquem included), and another for the directors with good wines as well, but without the sublime ones, which are for the exclusive use of the Presidency. "Our hair is falling out of the pasture."

Finally, Judge Andreu decided to include Blesa's emails in the Blesa case and in the case of the preferential ones in Caja Madrid, justifying the "seriousness" and "social and economic significance of the alleged scam", however, instead of including them all in bulk as his predecessor did, he decided to screen them and include only those that were not personal in nature and sent during 2009 (the year in which the preferred ones were put on sale).

Case of opaque cards

The case of the opaque cards or black cards was a scandal that came to light in October 2014, in which it was revealed that practically all of the directors of Caja Madrid (and later Bankia) during at least the presidencies of Miguel Blesa and Rodrigo Rato, had had a Visa credit card issued by the entity with which they had for years carried out personal charges valued at hundreds of thousands of euros charged to the accounts of the savings bank, and presumably, without declaring any of them to the Treasury.

The case has its origin in Miguel Blesa's emails that had been published by elDiario.es a few months before from a source derived by Party X. On December 13, 2013, elDiario.es published the exclusive on the opaque cards, based on one of those emails.

The email that sparked the case was written on September 1, 2009. At that time there was a change in the secretariat of the Board of Directors: Enrique de la Torre left his position and was replaced by Jesús Rodrigo. In the email, the outgoing secretary informs the new secretary of the remunerations that he must receive in his position. In said email, which was sent with a copy to Miguel Blesa and under the subject "Confidential", De la Torre reported:

Members of the Control Commission, in accordance with the regulations of Caja Madrid, may not belong to Filial Councils or participate. They therefore only charge daily subsistence allowance for the meetings of the Commission ($1350 gross). In addition, each has a Visa card of representation expenses, black for tax purposes so far [...], of 25 000 € per year except its President, which has a coverage of 50 000 €.

After the publication of the first news in eldiario.es, José Ignacio Goirigolzarri, president of Bankia, decided to open an internal investigation and order an audit of said cards. Bankia completed its audit in the spring of 2014. In the document, the amounts that each one had spent with their corresponding black card during the period in which they used it were detailed for the 86 directors. The audited expenses were carried out at Caja Madrid and later at Bankia during Rodrigo Rato's presidency at the bank (until 2011). According to Bankia, the expenses incurred with these cards were charged to Caja Madrid's loss account - an account designed to cover expenses associated with computer errors, compensation to clients or theft - and that is why they were not reflected in none of the audits carried out until then.

Bankia made available to its shareholder, the FROB, the results of the investigation, and this in turn brought them to the attention of the prosecution, which ordered the opening of proceedings for these facts.

In October 2014, the complete list of the 81,570 charges made by the holders of the opaque cards during the period they owned them was released to the press. This list, which detailed the owner, concept and amount of each position, caused a media stir. In it, expenses were discovered that were far from being conventional representation expenses and that were of all kinds: purchases in supermarkets, expenses of more than a thousand euros at parties in nightclubs, household appliances, luxury restaurants, shopping in shopping centers, trips and stays in luxury hotels during vacation periods and even purchases of women's lingerie. This list showed that the holders had made very intensive use of these cards, since they made more than 50 weekly payments using them.

After the publication of these extracts, some managers such as Arturo Fernández accepted that these expenses were real and that they had been incurred since, in their opinion, the entity had given him said card to cover personal expenses, as if it were a complement salary was involved. For their part, other Antonio Romero directors said they did not recognize these expenses and declared before the judge that their cards could have been cloned. Rodrigo Rato, who had spent a total of 100,000 euros during his presidency, decided to return part of the money (only the part corresponding to what he spent presiding over Bankia, not Caja Madrid), since a charge was published for which the manager withdrew 1,000 euros from an ATM with a charge to his opaque card two days after announcing the bankruptcy and rescue of Bankia and his expulsion from the entity.

At the end of January 2015, the judge of the National Court Fernando Andreu charged 78 former directors and former directors of Caja Madrid with alleged crimes of unfair administration or misappropriation.

On February 23, 2017, the National Court announced the sentence condemning 62 former directors and former directors of Caja Madrid and Bankia to prison terms for continued crimes of misappropriation. Miguel Blesa was sentenced to six years in prison and Rodrigo Rato to four and a half years.

On October 3, 2018, the Supreme Court ratified the ruling of the National Court by which Rodrigo Rato was sentenced to four and a half years in prison.

Cases related to Bankia

Social work

The sociocultural work that by law corresponds to the savings banks was carried out in Caja Madrid, through Obra Social Caja Madrid and the Caja Madrid Foundation, in the welfare, social, educational, cultural and environmental fields. In 2005, the total expenditure allocated to carrying out the different Social Work and Foundation programs amounted to 161 million euros. In January 2013, Caja Madrid itself became a foundation, the Fundación Especial Caja Madrid (later, Montemadrid). That year, it had a budget of 31.6 million euros.