Chapter 3 | Three open fronts | Economy

Francisco González began 2018 with the clairvoyance that it was already his last year at the head of BBVA. In January he announced to the press that he would leave the following year, once the process of rendering accounts had been completed before the shareholders' meeting. It would be the brooch, way of 75 years, to a career that began as a programmer of Nixdorf, continued as broker, was catapulted after his appointment as president of Argentaria (an entity that brought together public banks) by the Government of the PP and was consolidated in the merger with BBV and the subsequent takeover of BBVA.

However, last May 24, at 18.22, a new front placed him before an unwanted reality. The newspaper Public It brought to light documents that reflected payments of 242,000 euros from BBVA to a company of the retired curator José Manuel Villarejo Pérez to discover the dirty laundry of Luis Pineda, president of Ausbanc, now in prison for extorting the bank for years, among other entities. In mid-September, by surprise, FG (name that put his stock company and as it is known in the market) decided to advance his march to December 31, 2018 and, against what was announced (leave all positions), remain as president of honor of the bank and the BBVA Foundation.

The professional life of FG is characterized by its proximity to the political right and, above all, thanks to his connection with the deputy of the PP Manuel Pizarro, exchange agent and Stock Exchange like him. FG has starred in dark episodes, some of which have gone through the courts. In those more than 30 years of manager, has configured a profile of winner, survivor without feelings, willing to everything, even supposedly to espionage, to succeed. The Iceman. "He is an expert in living on the edge of the cliff, anyone would be nervous and worried in a situation like this, but he dominates times and situations of tension," says a former bank advisor who witnessed the great crisis of the entity when in 2001, FG denounced secret accounts in Jersey and forced to resign to the advisers who came from the old BBV, to which it received one to one, at intervals of fifteen minutes.

Francisco González observes the plant where 'traders' operate in investment banking at BBVA.
Francisco González observes the plant where 'traders' operate in investment banking at BBVA. THE COUNTRY

The shadows of FG

Subsequently, he fought hard to get rid of the attempt to remove him from the presidency of the entity in 2004 by the construction company Sacyr and the families of Neguri, (traditional shareholders of the bank belonging to the Basque oligarchy). The support of the Bank of Spain, governed by Jaime Caruana, allowed him to overcome the obstacle, despite the enmity of a part of the Government. In that fight came out some accounting irregularities of 5.24 million known in the sale of FG Inversiones Bursátiles to Merrill Lynch in 1996. And before it was involved in the sale to Banesto Mario Conde of Oil Dor, a network of gas stations, in which FG had 4% and acted as valuer.

A bunch of episodes that is completed with the matter of the retired curator Villarejo. According to the published information, the police delivered to the Hearing the documents that certify that the BBVA paid to Club Exclusivo de Negocios y Transacciones (Cenyt), a Villarejo company, between June 2016 and December 2017. That is, when the millionaire policeman was detained by Operation Tandem accused of criminal organization, money laundering and bribery.

After knowing these payments, in June 2018, BBVA opened an internal investigation. On October 11, after five months of investigating, the case became a potentially unprecedented scandal. Other way, The Independent, published invoices that showed that Villarejo had billed more than five million BBVA between 2012 and 2017 for jobs called "intelligence services". The BBVA admitted it and stated that everything was done according to the law. The list of companies that worked with Cenyt was also published and none exceeded 10,000 euros in turnover, which made BBVA an extraordinary case due to its amount. Ex-directors of the bank believe that Gonzalez, if he ordered to work with Villarejo, he could never think that the retired commissioner would end up spreading his private documents, which explains why BBVA did so many commissions.

The bank starts an investigation

The bank placed people close to González at the head of the internal investigation. The one who was his chief of staff until 2018, Joaquín Gortari, piloted the investigations as the new head of internal audit. He was accompanied by Eduardo Arbizu, head of the Legal Department for more than 15 years, and the new director of the Legal Area, María Jesús Arribas. They joined the usual law firm, Garrigues.

On January 10 came the third blow when they heard the new eaves allegedly ordered by BBVA Villarejo to investigate the assault attempt Sacyr. González's replacement, Carlos Torres, hired PwC and Uría and Menéndez to investigate all internal documents. On January 14, Torres sent a letter to the staff stating that he had not found evidence in the wiretaps, which he considers "reprehensible." However, he admitted that Cenyt worked for BBVA.

The repercussion of the case has meant that even the vice president of the European Central Bank (ECB), former Minister of Economy Luis de Guindos, with whom FG faced, urged BBVA to clarify as soon as possible the relationship he had with Villarejo because of the impact it can have on his reputation and on that of the sector. "Time is essential," he stressed.

Villarejo, in the courts of Plaza de Castilla in 2017.
Villarejo, in the courts of Plaza de Castilla in 2017. THE COUNTRY

The case has reached the courts. On January 15, the magistrate Manuel García-Castellón, who investigates the plot of the commissioner, opened a separate piece and ordered to seize the information held by the two media that published the wiretaps, The confidential Y Almost at the same time, the Anti-Corruption Prosecutor acted ex officio in case there could be an offense for allegedly entrusting wiretapping. According to the aforementioned media, Villarejo spied 15,000 calls for González's BBVA. Among the clicked phones were Miguel Sebastián, responsible for the Economic Office of the President of the Government; the one of the vice president of the CNMV, Carlos Arenillas; those of Luis del Rivero, president of Sacyr, and other members of the so-called "hostile group", as well as those of different journalists, some of EL PAÍS and Grupo PRISA. The audits came to the Bank of Spain itself (those responsible for Communication) and even to those of the BBVA press office.

The role of the BBVA security chief

Who commissioned the eavesdropping? Who knew and authorized them? and who paid them? At the bank, according to unofficial sources, these expenses could not have been made without being analyzed by the general intervention, in addition to the internal audit. "At BBVA, expenses are strictly controlled, such important bills of more than 50,000 euros, can not go unnoticed," says an executive who asks for anonymity, like so many others consulted. The chain of command of the Villarejo link, Julio Corrochano, director of Security of BBVA, who left the entity in April 2018, "because he retired" according to the bank, has also been questioned. The fact is that his departure occurred weeks before the start of the internal investigation. He was booked in 2002 when he was general commissioner of the Judicial Police.

During the siege of Sacyr, Corrochano depended on the person in charge of Human Resources and Services, Ángel Cano, a manager from Argentaria and very close to González. Cano, in turn, depended on the CEO, José Ignacio Goirigolzarri. The current president of Bankia, who came from the BBV, has denied knowing all this plot. FG went on to invest Goirigolzarri as future president. "The normal thing is for me to succeed Goirigolzarri" he said in 2005. However, in 2009 he removed him and placed Cano.

In the recordings there is a reference to Cano, when Corrochano says that he was being asked for "aggressive and destabilizing actions" and that "Ángel, my director, sees it that way too". The environment of Cano denies that it had relation with Corrochano for these questions. "If he dispatched on those matters, he always did it with the president," they assert. In other conversations, in which he mentions "presi", Corrochano asks Villarejo to provide him with "bombs" against his rivals. "Especially for when they call me (because they call me every 10 or 15 days the pressure) and to have three or four stories ready, that they see that we are ...", is heard in another recording.

González, in an interview with El País Semanal published on December 30 last, says he heard about the eavesdropping "when the first news appeared a few months ago, I knew that the bank was carrying out intelligence work to defend itself". Also, he says that Corrochano did not depend on him, and rivets: "That issue for me has no relevance, the security department does it with very strict rules, as far as I know, things have been done the way they should be done."

FG: "The bank carried out intelligence work to defend itself"

Former directors of the bank reject this version: "The conversations between Corrochano and FG were among them, fortunately." However, remember that Gonzalez boasted of knowing details of the private life of Sebastian, who commented as a joke in relaxed moments. They add a relevant fact: "The security officer had delegated powers to pay bills, although they should have derived, ultimately, to the general intervention." These sources highlight the enigmatic phrase of FG: "The bank carried out intelligence work to defend itself". And they consider that it would not be strange that he had to explain it to the judges.

Other sources recall that Carlos Torres was appointed CEO in 2015, instead of Cano, and, according to the alleged published invoices, BBVA was paying Villarejo until 2017. That is, Torres was also a senior bank manager while these were being produced. payments, and was, indirectly, responsible for Corrochano until his departure.

Carlos Torres Vila, Francisco González and Onur Genç on the board of BBVA.
Carlos Torres Vila, Francisco González and Onur Genç on the board of BBVA. THE COUNTRY

An executive outside the bank, but close to Gonzalez, understands that what must be proven is whether the then president ordered Corrochano to hire Villarejo or if the initiative was the head of Security itself. A version that does not fit with the audios. In his opinion, "we must show that FG knew that the plot Villarejo existed," says this source that anticipates that he does not think so, since Gonzalez himself commissioned Garrigues to investigate what happened. And he remarks: "It's worse what is coming out [del contenido de las escuchas] that what happened. "In his opinion, the BBVA council is not going to ask him to leave and he even ventures that Gonzalez will file a lawsuit against anyone who says he did espionage, in this sense, Torres, at the Davos Forum, He told a group of journalists that he has not asked FG to leave the presidency of honor and that he is calm, convinced that the investigation will not bring anything against him.

The bank has insisted that the invoices were legally paid and that they have the VAT declared. However, the descriptions that appear in these documents could open the front of the false invoices. Among the larger bills, some point to generic concepts such as "Professional services for locating assets and patrimonial structures" and "Provision of funds". Total, 737,500 euros. Another is a "success premium in accordance with the contract dated February 16, 2010; final settlement", without further explanation, with an amount of 2.57 million. Did they exist as they have been published? The bank says it has not found them for now. And if they were paid, who knew? The question has not been answered by BBVA.

The farewell of González

González suggested in February 2018 to the press that he would leave throughout 2019, but he left before and through the back door, without making an assessment of his 18 years of management. He left the forum, which avoided uncomfortable questions about the evolution of the entity. BBVA is worth half of Santander, despite the fact that in 1999 it was more valuable. During almost two decades of leadership he had four CEOs in BBVA (in Argentaria he had three), an unprecedented turnover in banking. Seven CEOs in 22 years.


Evolution of the weighted value since December 2001 (base 0)

Source: Bloomberg.

In that meeting with the press last year, FG he expounded on Sacyr: "I have never liked that the relationship of politicians with entrepreneurs goes beyond a point, because when it happens, brutal corruption arrives and that is fatal for society." Frankly, not much has been written about all this and it is very serious In any developed country that had happened what happened to us, the actors would have gone to jail. " And he added, in clear reference to the socialist government: "The group has not allowed itself to be obscured, or rather, to bend, before the political power."

The advance of the march of FG raises if he had knowledge of what was going to be published and when. Some sources say yes and that's why he hastened his withdrawal. However, if it sensed the reputational problem that would come to BBVA, why did not it completely abandon the bank to separate it from the case? Some exejecutivos who worked with him believe that being president of honor can defend better than if he were out, "although the reputational cost has been included in BBVA".

The pressure is now in Torres; in the new CEO, the Turkish Onur Genç, who does not speak Spanish, and in the rest of the directors. Among them Jaime Caruana, who was in the pools to replace him as non-executive president. Caruana, friend of FG, who worked with FG in Renta 4, was governor of the Bank of Spain during the Jersey scandal and in the attempted assault of Sacyr. Subsequently, he held a senior position in the IMF and was general director of the International Bank of Payments (BIS). In February 2018, FG appointed him a director of BBVA. Another heavyweight is José Manuel González-Páramo, former Minister of the Bank of Spain and former member of the Executive Board of the ECB from 2004 to 2014, who will also want to take care of his reputation. The third key man is José Miguel Andrés Torrecillas, chairman of the Audit and Compliance Committee and coordinating director, that is, he can call the board without authorization from the president. He directed Ernst & Young Spain from 2004 to 2014.

Reputational problem

Three fronts remain open: the closing of the BBVA investigation, the decision of González and the justice movements. In financial areas, it is speculated that the ECB, if considered responsible for a reputational problem, could withdraw the bonus of the last three years (about 4.5 million) because they are linked to good conduct. However, they do not believe that they could demand anything from his bulky pension (79.8 million), which he placed outside of BBVA in 2009 and which he has already collected. For Elena Herrero-Beaumont, director of the Vinces Institute for Public Affaires, dedicated to research on transparency and ethics, "the board of directors, if the investigations confirm the current accusations, should recommend the resignation of FG as the bank's honorary president, accompanied by a public act of forgiveness and a promise by the CEO to change corporate culture. "

With this scandal open around FG, paradoxical sounds his latest statements to El País Semanal: "Oppose the bad practices and corruption has defined my presidency."


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