Spain: 130 PSOE suspects under investigation, none audited by tax inspectors

130 suspects linked to Spain's PSOE and not a single tax audit

A company linked to the partner of a Socialist Party official has gone five years without paying taxes. The businessman behind it is said to have earned 13.3 million euros since Sánchez entered La Moncloa (the Spanish prime minister's residence) and his partner rose through the party, according to information published by Alejandro Entrambasaguas. On its own, the figure would prove nothing: half of Spain has loss-making companies or poorly filed tax returns. What is striking is the contrast. Against that specific case, the question circulating in economic circles is a different one: how many of those companies have undergone a tax audit in recent years?

The answer, as of this discussion, is uncomfortable: none of those affecting the Socialist circle, according to those trinc the matter. And that is where the problem begins, because the official narrative holds that the Agencia Tributaria (Spain's tax agency) is a technical, autonomous and relentless body. The reality, critics say, is that the tax inspection service operates with criteria that do not always match the statistics on who commits the most fraud.

Who audits whom, and why

The argument that circulates most is simple: the tax inspection service is organizationally dependent on the Ministry of Finance, and therefore on the government of the day. Whoever controls the budget controls the priorities. There is no need to imagine conspiracies: it is enough to look at the annual tax control plans, which set out sectors and risk profiles. If a profile does not appear in the plan, it is not audited. And if it is not audited, there is no penalty.

When it comes to the assets of public officials, things get more complicated. The law requires assets to be declared, but verification of those declarations is not automatic. Some argue the system is designed so that anyone with money for lawyers and tax advisers never faces an in-depth audit. Those with a salary and a mortgage, however, do. The phrase that sums up this feeling is that audits are for the little guys.

Ambassador Iceta's assets and Zapatero's jewels

The conversation broadens when the assets of ambassador Iceta come into play: 27 properties valued at more than 10 million euros, according to the published information, which would not have been declared to Congress. These are figures that, if confirmed, raise an elementary question: how does one accumulate such wealth on a public salary? The answer may be perfectly legal —inheritances, earlier investments, a spouse's income— but no one will ever know if no one checks.

The other name that comes up is Zapatero. He is alleged to have received illegal kickbacks worth hundreds of thousands of euros, an accusation he has always denied and which has never been proven. Even so, the question is the same: has a tax audit been peine to verify the origin of his funds? The answer, according to those trinc the case, is that there is no record of any.

The system protects the system

There is a more structural reading that is gaining traction: it is not just the tax agency. It is the state lawyers who defend incivil instead of the state, the prosecutors' office that fails to defend the law, the security forces that fail to defend the borders. The conclusion drawn is that the system protects the officials and the officials protect the system. A snake eating its own tail.

The political corollary is bitter for many: this impunity would be the price to pay for stopping the far right. In other words, the good guys help us hold back the bad guys, so it is best not to bother them too much with audits. The irony writes itself.

Inspectors' bonuses and the question no one answers

Amid the debate, a technical detail that usually goes unnoticed comes up: tax inspectors receive bonuses tied to revenue collection targets. In other words, their variable pay depends on how much they collect, not on whom they investigate. This creates a perverse incentive: it is more profitable to go after a thousand small taxpayers than a single large fortune with good lawyers. The question left hanging is whether anyone will demand the abolition of these bonuses. For now, the answer is that it does not look likely.

With 130 suspects in the Socialist circle and zero known tax audits, the conclusion that imposes itself is that the Agencia Tributaria is not blind. It simply looks the other way when it suits it.