Spain, Mariano Rajoy... and Conflicts

The need for politicians to disclose their interests and independent sources of income is recognized as a means of ensuring their accountability and eliminating corrupt practices in a modern democracy.  In Spain, however, it seems that the practices of old still have some way to go before they catch up with modern standards of [accountability].

One of the most privileged professional classes in Spain is the Property Registrar.  The position is available only to a select few as the number of registries is fixed in Spain.  Each registrar must pass an exacting exam before entering this elite group, at which time their activities become far more difficult to examine.  The government minister who nominally oversees the registrars earns a fraction of what they do and has little if any control over their behavior.

We do know that registrars in Spain make a lot of money.  A normal registry requires three to four hours work a day from the registrar; work that basically consists of signing documents, for which the registrar's income can easily exceed €60,000 per month.  Here is how it works:  the registrar receives commissions on the transaction of properties in his territory and is then entitled to 60% of the fees generated by his or her registry.  People who actually do the bulk of the work between them (usually 6 or 7 people) share in 30% of the registry earnings.  This amount also goes to office expenses (outside of the property costs which are funded directly by taxpayers).  Approximately 10% is used for fixed salary employees (although this is controlled directly by the registrar).

However, the registrar always has first access to the income of the registry, meaning that if the registry typically brings in a €100,000 per month, but takes only €70,000 in commissions in one given month, the registrar could still take €60,000 based on the budget.

On this basis, the leader of the main opposition party in Spain, Partido Popular (or PP) has some explaining to do.  Recently, when confronted by a widow complaining about her meager pension of €300 per month, Mariano Rajoy replied that he barely makes ends meet with his monthly salaries:  €3,000 as a member of the Spanish parliament and a further €5,000 as his party´s leader.  This was notable not only for the marked discrepancy in their relative incomes but also because Mr. Rajoy has proved reticent in the past when questioned on his income.

As a member of Parliament and the Leader of the Opposition, Rajoy has removed himself from his former role as registrar in Spain's north east and has handed his registry to a substitute.  While he has this right under Spanish law and a replacement now signs the documents on his behalf, this measure falls short of the rigorous standards of accountability one might expect of a senior politician.  His reason for choosing a substitute is not clear but while Rajoy fills his role as a registrar with a substitute, he is in a position to contract to share the registry earnings with this substitute and so continue to earn the majority of the income from the registry.  Such an agreement has never been disclosed publicly, but nor has Rajoy confirmed that he has signed over the entirety of the income from his registry to his substitute.  

A registrar will always benefit financially from the commercial growth of his registry because its income is derived from the number of properties built and sold in that area.  The registrar, therefore, has a clear interest in the laws governing development and the processes by which new construction is permitted.  The property scandal that has plagued the northeast of Spain has occurred in a region dominated by PP local governments.  In appointing a substitute, one can suggest that Rajoy is not "at arm's length" from his registry and certainly that this arrangement falls far short of the blind trust that would be required for his interests in other countries.

Even if we leave aside the question of current income from the registry, Rajoy's leave of absence guarantees his seniority and position when he retires from public life and rejoins the “registry class.”  And he is not the only one in his family to enjoy this status:  two of his siblings are also Registrars of Property in Spain.  Rajoy’s interests and that of his family means that they have much to benefit from his leadership of the PP.

Registrars, naturally, deny corrupt practices or unfair dealings, but without full disclosure, it is easy to conclude otherwise.  Imagine the outcry if the Leader of the Opposition in the UK was found to earn what was likely to be the majority of his income from the commercially motivated property registry in an already scandal-plagued domestic property market - and then contrast this with the ongoing silence on this issue in Spain.  

It is rumored that the power of the registrars is such that the socialist government, which also counts registrars among its party members, has avoided scrutiny of this subject for fear of bringing embarrassment to both parties.  The national press, too, appears disinclined to pursue the issue.  Of the all the scandals in the Spanish property market this is the one that gives the most cause for concern, but about which we have heard the least.  
The leader of Partido Popular in Spain has some explaining to do.  Recently in Spain Mariano Rajoy has been asked several times about his income.  He has told people that he barely makes ends meet with his €3000.00 as a member of the Spanish parliament and €5000.00 per month to be his party´s leader.  A widow who was complaining about her meager pension of €300.00 per month was recently greeted with that response when she confronted Mr. Rajoy during a recent tour promoting his party for the May elections.  Everybody thought he was telling the truth, finally, about his income, but is he really telling the whole truth?  

For most of us, it would be thinkable that the leader of the opposition or a member of parliament or a minister could be earning an enormous income from undisclosed commercial interests in the Spanish property market.  Of the all the scandals in the Spanish property market this is probably this most cause for concern.  
What does democracy look like in 21st century Spain?  Young though democracy is there, Spaniards often wonder out loud why they are not seen by the world in the same league as Germany, France or the United Kingdom.  Actually one doesn`t need to look very far for the answer,s although the Spanish still seem remiss about admitting their shortcomings.

In few democratic countries does is government financing of any church or, in this the case of Spain, the Catholic Church, still considered a separation of Church and State, a fundamental political of democratic life in democratic countries principles in many democratic countries.  Never mind the control that ominous organizations like such as Opus Dei play in the running of the church and the distributions in the distribution of those hundreds of millions of euros from public funds – not church funds, but taxpayers’ dollars/euros.  Then the Spanish government complains about their fair share of EU funds. The Mormons or Hindi or Buddhists receive euro for euro a proportional share from government coffers.  
One of the most privileged professional classes in Spain is the Property Registrar.  This is a position which is for only a select few as the number of registries is fixed in Spain.  Each registrar must pass an excruciating exam before entering this elite group.  The government minister who “oversees” the registrars earns a fraction of the pay that a registrar earns and has little if any control over their behavior.

What we do know is that registrar in Spain make a lot of money and enjoy enormous perks.  They are like self-employed government employees.  In fact, it is rumored that because that socialist government also has registrars among their ranks that the parties avoid this subject for fear of embarrassing both parties.  The registrars have this much power.

Rajoy is the Leader of the Opposition and is not sufficiently at arm’s length from his role as an absentee registrar- although he does not sign the documents, he must clarify what income he still receives from this register.  He has removed himself and given his registry to a substitute. It is true that he has the right to do under Spanish law and a replacement now signs the documents on his behalf, but this measure cannot be considered “at arm’s length” and certainly is not equivalent to the creation of a blind trust as is the norm in most democratic countries.

What he fails to tell the public is that as long as he has a substitute he can continue to earn the majority of the income from the registry and by contract share his earnings with the substitute.  This agreement has never been disclosed publicly by Mr. Rajoy.  He could claim that he has given all his income to his substitute but this wouldn´t make any sense, as he enjoys the privilege of leave of absence, which guarantees his seniority and position when he retires from public life and rejoins the “registry class.”   It is also worth noting that two of his sibling are also Registrars of Property in Spain.  Making an arm's length relationship with the registries even more tenuous to assert.

The only reason for choosing a substitute is to continue receiving earnings from his registry.  All the registries earn a percentage of the property transactions in the region.  It is important to understand the amounts of money involved. A normal registry requires three to four hours work a day from the registrar; work that basically consists of signing documents.  The pay for this can easily exceed €60,000 per month.  Here is how it works:  the registrar receives commissions on the transaction of properties in his territory and is then entitled to 60% of the fees generated by his or her registry.  People who actually do the bulk of the work between them, usually 6 or 7 people, share in 30% of the registry earnings who must share the expense of the office, but not large expense such office rent which is provided directly by the taxpayers.  Approximately 10% is used for fixed salary employees although is controlled directly by the registrar.

The registrar has first right to the money, however, meaning that if the registry makes a €100,000 in a particular month they earn only €70,000 the registrar (in this case Rajoy) could take his €60,000 based on the budget; secondly the expense and other, say, €10 000 to pay the contracted workers are deducted from the registrars share and from 30% share of the other 6 or 7 workers who have percentage contracts. Indeed, instances of just this situation are known to have occurred where the workers have received next to nothing for a 50 to 60 hour work week.  

The history of the registrars is that they deny this happens, but then why don´t they disclose what is really happening within the registries in Spain.  Why not put the cards on the table.  
The leader of the Official Opposition, Mariano Rajoy, does not, as you might expect, collect all his pay as we would expect from his elected office, but rather from commercial interests over which his party has much influence.  Imagine in the UK that the outcry if the leader of the opposition in the UK earned what is almost certainly the majority of his income decided to opt out of his [ministerial?] pay and perks because his previous receipts as a civil servant (from the commercially motivated property registry in the already in an already scandal-plagued filled property market in the northeast of Spain) paid moreSpanish property market.  

It is unthinkable to us that the leader of our an opposition party or a prime minister or a president were to receive their monthly pay according to the movements in the property market, however, that is exactly the type of behavior the Spaniards accept and do so without questioning why they are not considered part of Europe´s elite countries.  In Spain, Mariano Rajoy, the leader of the opposition enjoys the exorbitant pay that the registries provide.  It is true that Mr. Rajoyhe removed himself as he has the right to do under Spanish law and a replacement now signs the documents on his behalf, but this measure does not even get close to arms length never mind can not be considered “at arm’s length” and certainly is not equivalent to the creation of a blind trust as is the norm in most democratic countries.

It is, however, important to realize how big a conflict of interest we are talking about here this is.  The very closely guarded pay structure leaves him Rajoy with 80% of the commercial earnings of the territory of his registry and the substitute a mere 20% of the registry earnings.  Don´t feel too bad for the substitute, however, as they have their own registry too and naturally, of course, retain these earnings of their own registry also.  

A normal registry requires three to four hours work a day from the registrar; work that and basically consists of signing documents.  The pay for this on a monthly basis can easily exceed €60, 000 per month.  Here is how it works:  the registrar receives commissions on the transaction of properties in his territory and is therefore then entitled to 60% of the fees generated by his or her registry.  Lowly workersPeople who actually do the bulk of the work, between them, usually 6 or 7 people, must share in 30% of the registry earnings and approximately 10% is used for fixed salary employees and expenses.  The registrar however has first right to the money, however, meaning that if the registry needs to make a €100, 000 in a month to break even and in a particular month they only earn only €70, 000 the registrar (in this case Mariano Rajoy) would take his €60, 000 based on the year`s budget;  the other €10 000 would pay the contracted workers and expenses and the other 6 or 7 workers could potentially earn nil nothing, despite while working 50-60 hour weeks.  Indeed, instances of just this situation are known to have occurred where the workers have received next to nothing for their long hours of work. (and cases of close to zero are known).  Mariano Rajoy should be ashamed to be part of such a system, but it seems it runs in his family - t.  Two of his siblings are also registrars as well and, like their brother, also in controversial areas hold this post in areas of Spain where the registries have been subject to controversy.

The more houses built and sold in the registry area, the more money that is earned by the registrar.  This means that Mariano Rajoy, like any registrar,  benefits financially from the commercial growth of his registry.  He and therefore has a clear conflict interest in the laws of the land that regarding the construction and development of houses and apartments, and the systems by which construction is granted.  Mariano has further conflicts, however, two of his siblings also have registries which mean the much of the family benefits from his leadership of the Partido Popular.   The property scandal that has plagued northeast of Spain is largely run by Partido Popular local governments. Rajoy’s interests and that of his family mean that they have much to benefit from his leadership of the Partido Popular.pular.


It must be asked if Mariano Rajoy’s situation is any different at the most basic level from the scandals which plagued Berlusconi while he was in office at the most basic level when it comes to conflicts of interest and shady dealings while preaching democracy.  It is clear that their these men hold an idea of democracy is defined by their own little minds.   It also is clear the Spaniards must need to understand that until they get bring issues like this in under control for themselves, the world is never going to take them seriously.


Ok, so lots of comments.  

I think you are trying to make too many points, and it just looks like an attempt to smear Rajoy without a specific issue, which I’m sure is not the case.

The basic structure of your argument is (I think):

Spain wants to be taken seriously as a democracy
 The operation of the registries is extremely lucrative for the registrar in any region with high levels of development, but this is a fundamentally unfair system as those who do most of the work do not receive a fair share of the profits and, in some cases, get next to nothing
Rajoy is the Leader of the Opposition and is not sufficiently at arm’s length from his role as registrar- although he does not sign the documents, he still receives income from this post.  (Not clear whether he also takes a parliamentary salary or not, you need to clarify)  Also, 2 of his siblings are also registrars
There has been an (unspecified) scandal around the registries in the regions in which Rajoy and his family hold office – you need to provide more background on this.
There is a link between Rajoy’s office, the PP and the granting of construction permits that lead to the lucrative nature of the registrar’s post (this is implied throughout the article, but not supported or explained)
Spaniards need to understand that accepting this level of corruption confirms the worldview of Spain.   as a small place still finding its way to true democracy with true accountability.  Once they start to question and change these systems, the rest of the world will see them as equal to other European democracies.

The Church/State bit at the beginning is gratuitous unless you link this back to Rajoy and PP.  The structure is wrong – you need to explain the operation of the registries before you mention Rajoy so the reader has the context.  You also need to support your thesis that the Leader of the Opposition has the ability to influence planning decisions etc (are these made at a Govt or local govt level)?  Maybe another paragraph explaining the PP and it influences at a sub-govt level.

You need specific examples of regions in which the 30% workers have received no money and you can’t imply that this has happened in Rajoy’s region without really good proof.

The article doesn’t mention accountability once, although this is the principle that underpins the problem –ie in more developed democracies, politicians are required to be visibly accountable in a way that Rajoy, currently, is not.

You need to address the fact that nobody much outside of Spain knows about this, so this specific issue is not, in fact, what confirms other countries think of Spain.  Rather, this is an example of the type of corruption & lack of accountability that the world still EXPECTS from Spain.

(Written by Kreg Mills, 2007)