Alfredo Sáenz has an extensive resume: he helped save Banca Catalana and Banesto from bankruptcy, played a key role in the mergers of banks of Bilbao and Vizcaya, and also in the Santander Central Hispano Bank’s. He is a man of character with a determination to do things well, and low profile; in fact, it is a perfect stranger to the general public. He has not been seen with yachts, jets, mansions, or antics and his biggest extravaganza seems to be working hard for more than 50 years in complicated managing positions.
The case that can cost him this undeserved withdrawal starts in July 1994, when Alfredo Sáenz was working, taken over after Mario Conde scandal (Conde and his collaborators were responsible for a monumental collapse, with more than €3bn in debts, as well as for criminal behavior).
In July 1994, when Banesto was legally still public, it did everything it could to leave its debts behind. It is well-known that when a bank is intervened, companies in difficulties tend to pay them later and put other entities they do business with first.
One example was this client from Barcelona, Harry Walker, a company that sold boat sailing supplies. It has €3.8 million debt and Banesto managers believed that there was evidence of movement of funds of the company that they interpreted as an attempt to empty the company. They decided to file a criminal complaint by concealment of assets, which would subsequently be extend to fraud, against minority shareholders of the company. According to Banesto’s lawsuit these shareholders had pledged to personally answer for the debts of the company. Something that they denied.
On August 3, 1994 the case goes to a court in Barcelona while the judge was on vacation. Another judge, Pascual Estevill, takes the case and summons the legal representative of Banesto to ratify the complaint and the accused businessmen, who testified 14 September without the presence of a prosecutor and were sent to jail by Estevill. They came out days later after presenting millionaire bails. Months later, in January 1995, the cause was discontinued.
Those businessmen filed a complaint against Pascual Estevill who, himself, was found guilty by the Supreme Court in July 1996 of prevarication with illegal detention. They also accused judge Estevill of bribery, under the assumption that Banesto would have “bought” him to put them in jail so they would pay their debts. The Supreme dismissed the case in 2002 since no evidence of payment from Banesto to the judge was ever found
The four businessmen simultaneously launched a legal battle against Banesto that they initially lost. However, one of them filed a lawsuit which ended in the Supreme Court. Surprisingly the judges suggested that if accusations of procedural fraud were to be added the case would be reopened. The trial was rescheduled.
On December 28, 2009, Barcelona Provincial Court condemned Alfredo Sáenz of filing a false complaint. The sentence was confirmed by the Supreme Court in March 2011.
Therefore, the same facts have been considered and dismissed depending on the occasion, but legally the sentence that matters is the the one condemning Alfredo Sáenz, under the assumption that because of his position at the bank he should have been aware that Banesto had filed a complaint on concealment of assets against a few customers and have had both power and means to prevent it. That is, that he allowed a criminal complaint against a few customers, knowing that such complaint was false.
This seems out of all logic, since it is difficult to believe that Sáenz was involved in a lawsuit to recover a 650 million loan in Barcelona, while he was in Madrid with a half-trillion pesetas problem. The operation was minimal compared to his financial problems. The sentence includes weak evidence that shows that Sáenz knew that a complaint would be filed, but nothing that actually led to think that he had the smallest detail of the facts, something that is absolutely essential.
In November 2011, eight months after the condemnation of the Supreme Court, the Government of Rodriguez Zapatero reprieved Saenz and pointed out that the pardon would spread to ‘any other legal consequences or effects of the sentence, including any impediment to exercise banking activity, if no intentional offense were to be commited within 4 years’. However, the Catalan businessmen decided to continue with their appeals, and the Chamber for contentious administrative of the Supreme has decided that the Government has not the power to allow Saenz to be a banker.
The text of the sentence has not been made public but it is understood that the decision of whether Sáenz can be a banker is up to the Bank of Spain. According to Royal Decree 1245 / 1995 on banks, those who “have a criminal record” “lack of honor” to be counselor of a bank.
The Bank of Spain has in its hands the future of Alfredo Sáenz, but there are more relevant things going on that might have an impact on this case. A new Royal Decree draft which is transcription of the guidelines published by the European banking authority (EBA) in November of last year says that “the requirements of good repute, experience and good governance of credit institutions is to be modified”.
The new regulation states that a condemnation does not automatically imply the loss of good repute. The Bank of Spain shall evaluate the situation and allow the condemned to continue being a banker, according to certain parameters: if there has not been any money laundering, offenses against public finances or Social Security, nor prejudice to third parties, that the punishable fact has not been in self-dealing, that crime occurred a long time ago, that there has been no reiteration. Also good behavior subsequent to the facts which caused the condemnation will be extenuating.
In the midst of a process of collapse of savings banks, as it is the case of Bankia, Caixa Catalunya, Caixa Galicia or the Bank of Valencia, which have required an enormous effort for taxpayers, the one that is at risk is the CEO of Banco Santander, someone with an exemplary career, including a great public service, such as he carried out while he was in Banesto.
The Bank of Spain will have to deal with this in a moment were bankers’ image is the worst in decades because of some “cashiers” management, and this is likely to be in the mind of the judges. But what would be really shocking was if the Bank of Spain does not know to distinguish between Alfredo Sáenz, who, even by dragging an incredible sentence, has proven its capabilities in the construction of the first bank in the euro zone which never needed money from taxpayers, and those lords of the cajas, the savings banks, who led their entities to bankruptcy and enjoyed fantastic perks just until they left their positions.
Who can benefit from this unfortunate end? No one.