Corrupt network took commissions from energy-efficiency contracts

A suspected corrupt network of businessmen and politicians that was broken up by the Civil Guard on Monday apparently found a way to extract money from the public purse in the midst of the economic crisis: via energy-efficiency contracts.

Around 35 people were arrested in Monday’s raids, including high-profile figures such as former Madrid regional deputy Francisco Granados; the head of the León provincial authority, Marcos Martínez Barazón, and a number of mayors. They are suspected of participating in a scheme that saw politicians award €250 million of public contracts over the past two years in exchange for kickbacks from companies.

According to sources close to the case, dubbed Operation Púnica, the network made use of contracts aimed at bringing down electricity costs for municipalities, from which illegal commissions of two or three percent were charged.

French firm Cofely and its affiliate in Spain were the major beneficiaries of the €250 million of contracts

“It’s curious to see that during these two years of an incredibly tough crisis for citizens and the municipal coffers, when there wasn’t even any land around for rezoning or construction, the suspects managed to find a way to take money out of methods that were aimed at creating savings,” said Civil Guard sources.

French firm Cofely and its affiliate in Spain were the major beneficiaries of the €250 million of contracts handed out for works and public services. Until last night, the company’s website explained how it had won a contract in the Madrid satellite town of Parla covering “energy services for a number of municipal installations” for the value of €54.7 million. The result was to create savings of 40 percent in public lighting costs, according to the company’s press note, published on July 4 last year.

By Tuesday morning, the note had been deleted, although it is still visible via a web search. “A total of 92 companies, 154 command centers and 10,348 public lighting points are covered by the contract, as well as 51 traffic light crossings.” it stated. The note also included this declaration of intent: “This is the third contract of this kind that Cofely has signed with the Madrid regional government in recent months. As such, Cofely is consolidating its position as a service provider in energy efficiency for public groups and is taking a further step in its ambitions to drive the creation of sustainable cities for the future in our country.”

It’s curious to see that during the crisis the suspects found a way to take money out of methods for creating savings” Civil Guard sources

Civil Guard investigators are planning to take statements from many of the suspects today, most of whom spent Monday night in custody in the Madrid towns of Tres Cantos and Las Rozas.

The officers on Monday also carried out searches of the council headquarters in the Madrid suburbs of Móstoles and Casarrubuelos. The searches finished shortly before 6am, and saw a large number of documents seized for analysis.

A note released by the anti-corruption prosecutor on Monday incorrectly spoke of 51 arrests. The actual total so far is 35 arrests, two detentions still outstanding and 14 official suspects.