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Spanish PM denies knowledge of illegal party financing

SPANISH PM DENIES KNOWLEDGE OF ILLEGAL PARTY FINANCING

Spanish Prime Minister Mariano Rajoy -- speaking as a witness in a high-profile corruption trial on Wednesday -- denied any knowledge of illegal party financing, irregular donations or cash payments reportedly made to his ruling Popular Party (PP).

"My role was political," Rajoy said during his two-hour testimony, maintaining he knew nothing about the financial side of his party.

There is a "clear and precise separation" between the political and economic wings of the party, Rajoy insisted, as he made history by becoming the first acting Spanish premier to testify in a trial.

The case is the result of nearly 10 years of investigations and revolves around a purported kickback scheme in the PP, in which high-profile party members allegedly granted public contracts in exchange for cash or other gifts, sometimes for personal use and sometimes for illegal party financing.

This scheme is suspected of being related to more than €350-million-worth ($407 million) of public tenders granted during the time of Spain's construction boom.

The boom contributed to a property bubble which devastatingly burst during the 2008 financial crisis, leading to massive unemployment and an economic downtown throughout the country.

In the wide-ranging case, 37 politicians and businesspeople are on trial -- including former PP treasurer Luis Barcenas who is accused of creating a parallel account for the party in Switzerland, where he allegedly stashed €48 million ($56 million).

During his testimony, Rajoy confirmed he sent an SMS to Barcenas when the scandal broke in April 2012, saying: "Luis, nothing is easy, but we will do what we can."

Rajoy defended it however, saying he "replied and that's it," and only because Barcenas had sent him a message first and it was courteous to reply.

The prime minister was not implicated in the scheme, but as president of the PP since 2004 and a high-profile party member before that, he was compelled to give testimony. This part of the corruption case focuses on the period between 1999 and 2005.

While Rajoy said nothing personally incriminating, Pablo Iglesias, leader of the left-wing Podemos party, has defined the historic moment as "a disgrace".

"It is a shame for the leader of a country to have to declare illegal party financing within the party that is currently ruling," Iglesias told the media in a news conference.

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