“I do not comment on legal issues,” stated Emilio Botin, chairman of Banco Santander SA during the annual shareholders meeting in the northern city of Santander, Spain, on June 17. Botin was clearly not interested in discussing the tax fraud and forgery investigation opened against him and 11 members of his family. Instead, he stuck to reporting that Santander’s profits are the third highest of all global banks.

 The origin of the investigation came from last year’s disclosure by HSBC employee Hervé Falciani of the existence of several undeclared Swiss bank accounts. The Botin account is one of the 3,000 accounts that Spanish citizens have in Switzerland. It was opened in late 1936 when the father of the current chairman of the bank had to flee Spain after the outbreak of the Civil War. During that time, he lived in both London and Basel. 

 When Botin’s father died in 1993, he bequeathed his Swiss fortune to his children and grandchildren, including Emilio’s daughter, Ana Patricia Botin, head of the bank’s U.K. operations. The bank also has a strong presence in Portugal, Germany, Brazil, Mexico, Chile, Argentina and the U.S.

When Falciani’s information was made public, the Botins noted that they had already paid the Treasury department about 200 million euros (US$ 284 million) in back taxes. The Botins were certain that this would settle the matter, but that has not happened. Instead,  the Treasury department sent the information to the antifraud prosecutors the day after the May 22 municipal elections, during which the ruling socialist party suffered a serious setback. The Treasury department stated that it was not possible for it to establish whether the fiscal statements presented by the family were complete and truthful. 

According to Manuel Romera, director of financial studies at the IE Business School, the actions taken by the Spanish authorities do not have legal ground. The origin of the information is fraudulent, and the Spanish criminal code clears those who voluntarily regulate undeclared money to the Treasury, he says. The reason that the Botins made the 200 million euro payment, he adds, is because “they don’t want to give a public image of not complying with the law.” The Botin family is expected to face a long judicial process which, according to Romera, they would prefer to be brief in order to avoid any erosion of the bank’s reputation.

Some experts suggest that if the Botins can prove that their statements and actions were in fact truthful and complete, that they will most likely be acquitted. “If ‘Mr. Smith’ [i.e., an anonymous citizen] were the one charged instead of Mr. Botin, then the process would be straightforward,” says Romero.

All this drama is taking place at a time when the Spanish economy is experiencing 20% unemployment. In addition, a group of “outraged citizens” have been taking their protest to the streets since May 15, railing against what they say is the ineptitude of the political class with regards to the economic crisis. The protestors place a great deal of blame upon the banks.

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