The corruption that plagues the Ministry of Transportation during the mandate of José Luis Ábalos – his main collaborator, Koldo García, allegedly charged illegal commissions for facilitating the business for a specific company – has resurrected suspicion regarding the colossal looting that occurred in the sale of masks to the public sector, taking advantage of the emergency situation of the first three months of the pandemic. Several hundred businessmen made huge gains—million-dollar profits, easy and quick—at the expense of selling masks to administrations for exorbitant prices. In that period, the public sector awarded up to 2,000 million euros in health supplies with hardly any controls, suspended by the alarm decree: it was allowed to contract emergency health products without competing bids, or price limits, or accreditation of solvency or experience. in the sector. The Congress and the Senate are now preparing to investigate these events following the so-called scandal broke out. Koldo case.
Between 2020 and 2022, the Court of Auditors audited thousands of contracts from the central administration (ministries of Health, Transport and others), the most populated municipalities in Spain and autonomous communities. In the majority of these contracts it found numerous irregularities: the successful bidders who did not demonstrate their solvency or had proven experience in the sector set apparently excessive prices, but they did not find any criminal reproach, since these operations took place at a time when the rules were suspended due to the health emergency that the country was suffering.
Under these conditions, numerous unscrupulous businessmen achieved profits far superior to those of their usual activity. The Court of Auditors put in its reports hundreds of examples of this situation, protected by the alarm decree that the Government approved on March 14, 2020.
Ministry of Health: price multiplied by 10 in just eight days. Health went from paying 0.27 euros per mask on March 20, 2020 to 2.67 euros just eight days later. The highest price for masks paid by the National Institute for Health Management arrived on April 3, 2020: 4.17 euros. The judicial and fiscal investigations opened so far have proven that the majority of intermediaries who offered masks in the first weeks of the pandemic bought them in China for an average of two euros.
Chaos in the Madrid City Council: 93% of hand-picked contracts, exorbitant prices and million-dollar scams. The Court of Accounts audited 59 covid contracts of the Madrid City Council, the city that paid the most for masks at the beginning of the pandemic of the large cities audited. Madrid only requested offers from more than one company in 7% of the contracts analyzed; the rest (93%) was awarded by hand, something allowed in the alarm decree. Among those contracts, there are two that ended up in court due to the scam perpetrated by their successful bidders. A New York-based consultancy owned by Philippe Solomon sold 500,000 masks for 2.5 million euros. The City Council advanced, through the Funeral Company, 1,250,000 euros. The material that arrived was so defective that the general coordinator of Budgets, Elena Collado, tried to return it without success. The police do not locate Solomon at first and the City Council tries to recover the money advanced in court. The second contract, for 11 million euros, was awarded to intermediaries Luis Medina and Alberto Luceño, without any prior relationship with the health sector. Both arrived at the City Hall window through a cousin of the mayor, José Luis Martínez-Almeida. They made 6 million euros in commissions for their intermediation in the sale of defective products – and in addition to the most expensive ones in those days, at 6.24 euros per mask – for which they have been prosecuted.
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The urgency fueled the looting: “We have to close tonight, we have a million at six euros.” The joint company of Funeral Services of the Madrid City Council had sufficient liquidity and very agile processing mechanisms to address the health emergency of the pandemic. When the Madrid City Council decided to contract with Luceño and Medina, without knowing that they were going to collect multimillion-dollar commissions, on March 24 and at dawn, it ordered the funeral company to approve the award: “They offer us one million graphene masks, effective and high quality at 6.6 euros per unit. We must close the operation tonight with a 50% advance.” Something similar, although with less burdensome economic consequences, occurred between the Ministry of Transportation and the Puertos del Estado company. The undersecretary called: “A supplier has eight million masks, if we do it quickly we will get it.” The ministry, following an order signed by Ábalos, paid 2.5 euros per mask. The company that benefited from the contract allegedly paid illegal commissions to the minister’s main advisor, Koldo García. It is the first known case where a part of the ball obtained by the successful bidder ends up in the hands of an employee of the ministry that awarded the contract.
“Some made a normal profit, but others took the plunge.” A mayor of one of the 12 large cities investigated by the Court of Auditors explained the situation like this: “The problem is not that the company or intermediary that offered us the material lacked experience in the health sector, that was not the important thing in That moment. The problem was the price they charged for that service. Some made a normal profit, but others took the plunge. And the worst thing is that nothing can be done.” One of the “sablazos” most investigated by the Prosecutor’s Office was the sale of 250,000 masks for 1.5 million euros (one million was netted by the successful bidder following buying for 2 euros what he sold for six euros). The beneficiary was a businessman friend of Isabel Díaz Ayuso, president of the Community of Madrid, who hired the brother of the popular leader to obtain contracts for the sale of masks. Tomás Díaz Ayuso received 269,000 euros for that work. But influence peddling might not be proven. Ayuso’s friend and brother offered the masks at the window of the Ministry of Health. And the contract was awarded to them by hand without knowing that they were people linked to the regional president, as concluded by the Prosecutor’s Office.
The courts absolve transparency. The then mayor of Valladolid, Óscar Puente, now Minister of Transport, informed the plenary session of the City Council in April 2020 that they were going to buy masks from a friend of his for 3.35 euros and left this statement to the municipal groups following consulting with the intervener in a situation of pressing need. The PP now denounces these events, although at the time a complaint was filed by an individual that the courts filed due to the transparency that had followed that procedure, where there was no payment of illegal commissions to anyone.
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