Pandora ring

Pandora Papers: the mayor of the Catalan Popular Party was linked to a company created in a tax haven | Spain

Sr Garcia

Xavier García Albiol, the current mayor of the city of Badalona and the former head of the Catalan branch of the Conservative Popular Party (PP) until 2018, held the general power of attorney for a company in Belize, a small tax haven in the North Central America. This was handled through an Andorran company linked to the private bank Andbank, the second bank by size of assets in the microstate.

García Albiol was secretary for municipal policy in the Catalan branch of the PP when he was linked to the opaque company in 2005. Before that date he was president and municipal councilor of the PP in Badalona and general secretary of the PP in Barcelona.

García Albiol’s name is included in the Pandora Papers, a massive document leak to which the International Consortium of Investigative Journalists (ICIJ) had access, and whose stories are published in Spain exclusively by EL PAÍS and the network of La Sexta television. For more than a year, more than 600 journalists from 117 countries have studied 11.9 million documents from 14 offshore service providers around the world.

Analysis of this data reveals that García Albiol was linked to a company in Belize called Luverne International Inc. on April 7, 2005. This is according to a document signed by Notary Diómedes Edgardo Cerrud in Panama City. The mysterious firm was created on January 1, 2005 and was dissolved on December 9, 2015.

We do not know what the power of attorney was for – a generic 23-point document -. But the document gave García Albiol the power to act in the buying and selling of properties, bonds, stocks and businesses. It also gave him the ability to open and close deposit and savings accounts in “domestic and foreign institutions”.

The document granting the general power of attorney to García Albiol.
The document granting the general power of attorney to García Albiol.

In addition, the document allowed the mayor of Badalona to manage safes in “bank safes”. He could also use the Belize company to start and dissolve businesses; present public and private calls for tenders; buy and trade goods, stocks and assets; as well as billing rents and loans, withdrawing funds or writing checks.

Point number 15 of the legal text underlined the ability “without any limitation” to “take real, tangible or symbolic possession of all asset classes that correspond to the company”. The document includes the name, surname and Spanish identification number of García Albiol, who joined the ranks of the PP in Badalona in 1990.

Myrna Navarro, who is linked to Bahamas Latin American Holdings Ltd., appeared as secretary of Luverne International Inc., and its director was Edgardo E. Díaz, a lawyer who appears to be the leader of dozens of companies in documents from Alemán. , Cordero, Galindo & Lee (Alcogal), the Panamanian law firm that managed Luverne and which is at the center of the Pandora Papers data breach. Alcogal is a law firm dedicated to building convoluted networks of companies in tax havens such as the Bahamas and the British Virgin Islands, and also works in countries such as Switzerland.

The mayor of Badalona did not have to travel to Central America to deal with the paperwork. Afsi, a small Andorran law firm established by Andbank in 1997, was in charge of handling the business, according to the documentation. Thanks to the banking secrecy of the microstate, enshrined in law until 2017, as well as the fact that its laws did not include tax offenses, Asfi has secured clients like Pep Guardiola, the coach of the Manchester City football team. This factory of Andorran firms also worked for anonymous clients who, over time, would appear in forensic investigations for belonging to the money laundering network of Chinese businessman Gao Ping or to the known Brazilian corruption investigation. under the name Operation Car Wash.

One of the files of the company Luverne International Inc., and which was transmitted to a manager linked to Andbank.
One of the files of the company Luverne International Inc., and which was transmitted to a manager linked to Andbank.

A story that changes

García Albiol offered two different versions to EL PAÍS and La Sexta when asked about his connection to Belizean company Luverne International Inc. “This is news for me. I have no idea. In Andorra? In my name ? I’ve no idea. I have never been to Belize, ”he replied on Tuesday, adding that he did not know that this company had been created by a company from Andorra. “And the office is in Andorra?” I’m flabbergasted, ”he said over the phone.

In a second phone call on Wednesday, the mayor acknowledged the existence of the opaque company and claimed that it was created by his family to open “business projects” in Spain and Central America, but that the business had no income. “In 2005, I decided with other people to study the possibility of creating business projects in Spain or abroad. At the time, I had contacts in Central America, El Salvador, Honduras and Guatemala. It is true that [the company] was in Belize. It was a business that at no time brought me any economic returns, any increase in wealth. I didn’t win a euro, ”said García Albiol, who was appointed in 2020 chairman of the PP mayors committee, an internal group of the conservative party made up of 2,000 PP mayors.

Xavier García Albiol during his second swearing-in as mayor of Badalona, ​​in May 2020.
Xavier García Albiol during his second swearing-in as mayor of Badalona, ​​in May 2020.Europe Press

On Wednesday, after the story came out, García Albiol spoke to La Sexta to say he was involved in the business “with a group of people who had nothing to do with politics or the PP”. The company was created, he added, as an alternative to his professional life in politics. “They explained to me the possibility of appearing as having a general power of attorney.”

García Albiol’s second answers contrasted sharply with what he had said just a day earlier when asked about Luverne International Inc. “I have no idea. Zero, zero, ”he said on Tuesday, after confirming via a WhatsApp message that the ID number on the notarized document was his.

An analysis of the official succession of this politician, who once headed the provincial branch of the PP in Barcelona and held numerous public positions over three decades, does not show a disproportionate fortune. In his last municipal declaration of assets in 2019, the 53-year-old said he owned three apartments (one of which he co-owns), two cars – an Audi Q5 and a BMW GT650 – bank accounts to € 121,000 in funds, € 56,000 in shares and a Bavaria yacht valued at € 80,000.

Since December 2004, García Albiol has also been the sole director of a real estate rental company called Incendo SL, which has no assets in his name but a heritage of € 103,973. The company declared a loss of € 1,070 in 2016, the last year of presentation of its accounts in the commercial register, according to the Informa database.

Using an offshore company is legal if declared to the tax agency in the owner’s country of residence. But many owners use these companies to avoid paying taxes, since they offer low taxation and the protection of anonymity. Thus, through the network of opaque companies in tax havens like the British Virgin Island and Belize, the equivalent of 10% of the gross domestic product (GDP) of the European Union is diverted, according to the European Commission, which estimates that 46 billion euros in taxes for public treasuries are lost each year thanks to these devices.

García Albiol was mayor of Badalona from 2011 to 2015. After this first term, he returned to the post in 2020. His return to the town hall of the city – which has 223,166 inhabitants and is the fourth most populous in Catalonia – was made possible due to disagreements between the left and the resignation of his predecessor, Álex Pastor of the Socialist Party (PSOE), who was caught breaking last year’s coronavirus lockdown and driving under the influence alcohol.

A key figure in the PP, Gracía Albiol made headlines during her first term as mayor of Badalona. Her uncompromising speech against foreigners – depicted in leaflets, xenophobic slogans such as “Cleaning Badalona” and images reminiscent of those used by French far-right leader Marine Le Pen – had an impact on immigrant neighborhoods and turned the city into a point of reference for the most extreme wing of the PP. His controversial decisions include restricting aid to foreigners and stopping a mosque project. In a speech he linked the Roma community to crime. “These are plagues that only came here to commit crimes,” he said. SOS Racismo sued him for inciting hatred and discrimination, but he was acquitted. García Albiol is now facing a new court case over allegations of embezzlement of public funds and procrastination. The politician will have to explain to a judge why he authorized the installation without authorization of two mobile telephone antennas at the headquarters of the local police in Badalona, ​​the Guardia Urbana.

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