Rodrigo Rato
Rodrigo de Rato y Figaredo (Madrid, March 18, 1949) is a Spanish banker and politician, former member of the Popular Party.
Graduated in Law, he was Vice President of the Government of Spain and Minister of Economy during the governments of José María Aznar. He held the position of managing director of the International Monetary Fund until his resignation on June 19, 2007, he led the Bankia financial group between 2010 and 2012, and since 2013 he held the position of advisor for Latin America and Europe at Telefónica.
On April 16, 2015, he was arrested and released, after several hours of searching his home by the Tax Agency, for the alleged crimes of fraud, seizure of property and money laundering. On February 23 In 2017, he was sentenced to four and a half years in prison, for a continuous crime of misappropriation between 2003 and 2012, in the case of black cards. On October 3, 2018, the Supreme Court ratified the sentence of the National Court and on October 25, Rato entered the Soto del Real prison.
Biography
He was born in Madrid in 1949, although his family is of Gijón origin, being the great-grandson of Faustino Rodríguez-San Pedro y Díaz-Argüelles (lawyer, minister, deputy, senator and mayor of Madrid during the reign of Alfonso XIII) and son of businessman Ramón de Rato Rodríguez-San Pedro, who was imprisoned in 1967 for evading money to Switzerland through his Banco Siero, and Aurora Figaredo Sela. Both Asturian families (the Ratos and the Figaredos) own industries and hold titles of nobility.
After studying with the Jesuits of Chamartín at the Colegio Nuestra Señora del Recuerdo and starting university at ICADE, he graduated in Law from the Complutense University of Madrid in 1971, obtained a Master's in Business Administration from the University of Berkeley (California) three years later and, already being Minister of Economy of Spain, received a doctorate in 2003 in Political Economy from the Faculty of Economic and Business Sciences of the Complutense University of Madrid.
Beginnings in his political career
He entered politics in 1979, appearing as a candidate for Cádiz of the Alianza Popular (AP) party, that is, the predecessor of the Popular Party (PP). After serving on the party's executive committee since 1980, he won his first seat in the Congress of Deputies in 1982. He was thirty-three years old. Being one of the most active AP deputies in Congress, he supported the nomination of José María Aznar as a candidate for president. Others who also supported him were Federico Trillo or Juan José Lucas. During the years of Aznar's opposition, he was his right-hand man and spokesman for him in Parliament.
Minister of Economy
After the victory of the PP by a simple majority in the 1996 general elections, he promoted the pacts that allowed the PP to govern. He was appointed Second Vice President of the Government and Minister of Economy and Finance, a position he held until April 17, 2004. The main milestones of his tenure were:
- It carried out the privatization of Argentaria and Tabacalera.
- He was a promoter and responsible for the tariff deficit, through Law 54/1997 of the Electrical Sector, a system by which the end user did not pay all the costs of the electricity received, leaving a part to be paid in the future. This brought an unreal containment in the price of electricity in Spain, generating a hole in the finances of the estimated state in 2011 at 20 billion euros.
- It carried out widespread tax breaks, more specifically the IRPF, in two reforms carried out in 1999 and 2003, respectively.
- He was governor for Spain at the Boards of Governors of the IMF, the World Bank, the Inter-American Development Bank, the European Investment Bank and the European Bank for Reconstruction and Development.
- He regularly attended the meetings of Ministers of Economics and Finance of the European Union and represented the European Union, as Minister of Economics of Spain, when he held the Presidency of the European Union at the meeting of the Group of Seven (held in Ottawa in 2002).
- He was also the minister responsible for the international trade relations of the Spanish government and represented the country at the ministerial meetings of the World Trade Organization (held in Seattle in 1999, Doha in 2001 and Cancun in 2003).
At the end of 2003, his name was considered as a possible successor to José María Aznar at the head of the PP and as a candidate for the presidency of the Government, but Aznar finally named Mariano Rajoy as his successor. Even so, in 2012, Aznar revealed in his book Memories I, that Rato was his first option to succeed him in the PP, and that the fact of finally opting for Rajoy was because Rato rejected even in the offer twice for various reasons. Specifically, Rato accompanied Aznar, along with other former ministers such as Eduardo Zaplana, at the presentation of the book of memories in November 2012. After the departure of the Rajoy government in September 2003 to prepare the elections, Rato was appointed first vice president of the government.
BBVA forgave him a debt of 312,000 euros. The counterpart Rato provided is unknown.
Managing Director of the International Monetary Fund
In the elections of March 14, 2004, he ran as number two on the lists of the PP in Madrid and was elected deputy, a position he resigned in a little less than three months after being appointed managing director of the International Monetary Fund (IMF).) on May 5, 2004. He resigned on June 28, 2007, alleging personal reasons. His resignation became effective four months later at the annual meeting. Until then, he held different councils.
An internal IMF report dated January 10, 2011 criticizes the agency's actions between 2004 and 2007, a period in which there were three managing directors, including Rodrigo Rato. The report notes that there was a bubble of optimism as the biggest financial crisis since the Great Depression of 1929 brewed. The conclusion was that internal deficiencies prevented the crisis from being prevented. The report cites organizational deficiencies, infighting, miscommunication, analytical bias, political pressure, self-censorship, and a lack of oversight and control by IMF management. The report also acknowledges that many of those issues were inherited by Rato and arose a decade earlier.
President of Caja Madrid / Bankia and his relationship with private companies
On December 4, 2007, it was announced that he was joining the international division of Lazard, a French-American investment bank established in London and with powers in Europe and Latin America. At the beginning of 2008, he became an international advisory director of Banco Santander.
Rato has been president of Caja Madrid (since January 2010) and Bankia (since December of the same year). On May 7, 2012, he announced his resignation. He had previously resigned from his positions as senior general director of investment banking at Lazard, external director of Criteria (the holding of companies owned by La Caixa) and on the International Advisory Board of Banco Santander.
During his management as president of Caja Madrid, he configured Bankia as the merger of the banking business of seven savings banks (Caja Madrid, Bancaja, La Caja de Canarias, Caja Ávila, Caja Segovia, Caixa Laietana and Caja Rioja) in what it became the largest financial integration operation in Spain. In February 2011 he officially presented Bankia and five months later (on July 20, 2011) he took it public in the largest Public Subscription Offering (OPS) recorded that year in the entire world financial system. In October 2011, Bankia became part of the Spanish Ibex 35 selective index, with an approximate capitalization of 6,500 million euros; it was also part of the STOXX Europe 600. Bankia was excluded from the Spanish selective (on January 2, 2013) due to its restructuring process and was finally replaced by Jazztel (on April 23, 2013). As of (April 29, 2013) its capitalization barely exceeds 225 million euros, thus having lost most of its initial value.
In December 2011, Rodrigo Rato presented the entity's Strategic Plan until 2015, according to which the Bank would be one of the four Spanish financial leaders. In 2011 Bankia announced profits of 305 million euros, in a year marked by its merger process, going public and carrying out an internal capacity adjustment that closed 800 branches, establishing the number of branches in its network at 3,500. Deloitte detected in Bankia's 2011 accounts a patrimonial gap of 3,500 million and chose not to sign the audit report, a fact that precipitated the resignation of Rodrigo Rato as executive president. The entity proceeded to reformulate its 2011 accounts to introduce the write-offs made in the loan portfolio, in the foreclosed assets and the market value of the integrated investees, in such a way that the accounts showed losses of 2,979 million euros in 2011, far from the 309 million profit previously announced.
In December 2011, the Bank of Spain forced Bankia executives to publish their salaries, making it public that Rodrigo Rato received an annual remuneration of 2.34 million euros, one of the highest among Spanish savings banks. Five months later, Rodrigo Rato resigned as Bankia's president after having presented a plan for the entity that was rejected by the authorities, where it was stated that the entity would have to receive some 6,000 million euros of public money through the Fund of Orderly Bank Restructuring (FROB), while Banco Financiero y de Ahorros (BFA), Bankia's parent company, had not managed to significantly reduce exposure to the real estate and developer sector, which amounted to 37,517 million euros.
After being considered by the IMF the main risk for the Spanish banking system, in May 2012 Bankia became controlled by the Spanish State after the takeover of BFA, Bankia's parent company. Bankia's situation has been considered a turning point in the country's financial crisis, placing it one step away from intervention. After the rescue of this Spanish bank, in June of the same year the EU decided to rescue the Spanish bank, contributing a maximum of 100,000 millions of euros. The IMF pointed to Bankia as the main person responsible for the rescue.
As a result of his tenure at Bankia, he was named fifth worst CEO of 2012 by the economic magazine Bloomberg, after being investigated for fraud, price fixing and embezzlement in connection with the fall and subsequent rescue of Bankia. The magazine cites that Bankia announced profits of 309 million euros in 2011, which after the abandonment of Rato turned out to be 3,000 million euros of losses.
Bankia's investigation
In July 2012, he was summoned to testify as accused by the National Court for the management of Bankia along with the entire management leadership. There are three complaints filed, the one by UPyD and 15MpaRato filed in July 2012 (admitted for processing) and the one by IU filed in April 2014 and which was not accepted after being described by the judge as humiliating "by pretending to achieve this type of advantage through the exercise of popular action", in reference to the involvement of charges from Izquierda Unida in the case. acquitted Rato and the other defendants of the crimes that they had been accused of in the trial for the IPO of Bankia.
Rodrigo Rato was also implicated in the scandal of the opaque cards of the same entity. Between 10-24-2010 and 11-28-2011, Rato made 519 purchases charged to the till, for an amount of €99,041. Expenses include purchases in clothing stores, alcoholic beverages, perfumes, musical instruments or luxury restaurants. In addition to the purchases, from the end of February 2012 to May 7 of that same year in which he resigned, the then Bankia president managed to withdraw €16,000 in cash, at a rate of €1,500 a week. On Saturday May 5, the same day that the Minister of Economy, Luis de Guindos, summoned the Ministry in view of the delicate situation of the entity and the need for a new reorganization and recapitalization plan, Rato withdrew his last €1,000 and the On the day of the resignation, a last charge was made to card B of €341.63 for a dinner. According to the breakdown of expenses, Rato charged his credit card for expenses in a single day of €3,547 in alcoholic beverages, almost €1,000 in a shoe store, and he made up to 18 cash withdrawals, 17 of them for €1,000 at ATMs of his institution.
On November 27, 2014, the Popular Party announced the removal of Rodrigo Rato as well as "all his affected militants" at the end of an internal investigation into the case of the opaque cards of Caja Madrid managed by the Rights and Guarantees Committee. In November 2015, Antonio Serrano-Arnal, investigating judge of Court number 31 of Madrid, decided to charge, for his involvement in the Rato case, to Miguel Ángel Furones, president of the Publicis advertising agency, and Rafael Lorca, executive director of the Zenith media center. Another investigation examines Rato's family accounts, in which he is charged in the cause, with possible crimes of money laundering, bribery and embezzlement of public funds.
Signing by Telefónica
The Appointments, Remuneration and Good Governance Committee of Telefónica, S.A. approved on January 4, 2013, the incorporation of Rodrigo Rato to the Advisory Council of Telefónica Latam and Telefónica Europe, which bring together businesses in Latin America and Europe.
2012 tax amnesty and detention
On February 17, 2015, the Director General of the Tax Agency announced the investigation of 705 taxpayers who availed themselves of the tax amnesty approved by the executive of Mariano Rajoy in 2012. As a result of said investigation, on February 16 On April 2015, the prosecutor's office announced an investigation into Rodrigo Rato for alleged crimes of fraud, seizure of assets and money laundering. Court number 35 of Madrid thus ordered the search of his home in the Salamanca neighborhood, in Madrid. Three hours after the start of the search by the Customs Surveillance Service, Rodrigo Rato was arrested by the judicial police. He was later released.
In April 2016, following the publication of the Panama papers, it became known that he used several companies in tax havens to hide money from the Spanish State. According to investigations, in 2013 Rato resorted to the Panamanian law firm Mossack Fonseca, of where the documents called the 'Panama papers' come from, to liquidate the two opaque companies where he kept 3,672,410 euros. According to the investigation, Rato intended to prevent his offshore companies from being located with this maneuver, which did not prevent Court number 31 of Plaza Castilla from instructing proceedings against Rato for money laundering, corruption between individuals.
On October 3, 2018, the Supreme Court confirmed the sentence of four years and six months in prison for Rodrigo Rato for the black card case.
On October 25, 2018, he was admitted to the Soto del Real prison.
Collaborations in Grupo Intereconomía (since 2017)
Since 2017, Rodrigo Rato has published opinion columns in La Gaceta in a space titled "Calle 19" in which he presents his liberal vision of the economy and society.In the Grupo Intereconomía he has also collaborated in the program El gato al agua , where he was interviewed on 9 January 2018.
Posts held
- Deputated by the province of Cadiz at the Congress of Deputies. (1982-1989)
- Member of Madrid at the Congress of Deputies (1989-2004)
- Spokesman of the Popular Group at the Congress of Deputies. (1989-1996)
- Second Vice President of the Spanish Government (1996-2003)
- Minister of Economy and Finance (1996-2000)
- Minister of Economics. (2000-2004)
- First Vice President of the Spanish Government. (2003-2004)
- Managing Director of the IMF. (2004-2007)
- Director of Caja Madrid. (Since 2010)
- Director of Bankia. (2010-2012)
- Advisor to Telefónica Latam and Telefónica Europe (2013-Update)
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