The controversy that opened in 2013, when the Water Consortium approved the payment formula to Inalsa's creditors, will end up being investigated in a new criminal case. This has been requested by the Provincial Prosecutor's Office of Las Palmas, which sees "verified irregularities" and indications of possible crimes in that action, after investigating a complaint filed by Alternativa Ciudadana almost two years ago.
At that time, the Consortium's auditor issued a report in which she warned that the agreements to pay creditors were "null and void" and "attacked the interests of the Cabildo", since Inalsa's debts were being paid with money from the tender with which the management of the water was privatized. However, based on two external reports (one of them commissioned to Ignacio Calatayud and the other to Pedro Lasso), it was decided to proceed. Shortly after, the auditor submitted her resignation.
"She has plenty of reasons to submit her resignation and I have plenty of reasons to dismiss her. She has plenty of reasons to worry," said the president, Pedro San Ginés, after the auditor left her post, anticipating her dismissal by San Ginés. The Intervention reports came to light at the hands of the opposition, who made them public. Among other things, based on these reports, the opposition denounced that the Consortium's money was being "given away" to Inalsa, the public water company, which was bankrupt and was going to be dissolved, so it was never going to return that sum.
Asset liability of managers
Different formations then denounced that what was intended was to free Inalsa's managers from the responsibility they may have had in its bankruptcy, and that could have led them to respond for the debt with their personal assets. One of the most critical parties was Alternativa Ciudadana, which in July 2013 decided to file a complaint with the Prosecutor's Office, warning of this and other facts that could be criminal in the management of Inalsa since 2006. Now, the prosecutor's office has agreed with them on a good part of their complaint.
After investigating the facts, the prosecutor Miguel A. Hernández González concludes that there are indications of different corporate crimes and embezzlement or misappropriation of public funds. For this reason, in a letter notified this week to Alternativa Ciudadana, he asks that the complaint be sent to the Courts, so that proceedings can be opened and several of the facts denounced by this party can be investigated.
Regarding the agreement to pay creditors, the Prosecutor's Office requests that the minutes of the Consortium's assemblies of May 23, July 8 and July 11, 2013, where these agreements were discussed, as well as the auditor's report and the external reports commissioned to Ignacio Calatayud and Pedro Lasso, be requested. In addition, it requests that a report be commissioned to the Court of Auditors detailing whether this decision complied "with the law", in case "the facts could have criminal relevance".
"It means completely ignoring the function of the commercial judge"
In his account, the prosecutor recalls that the General Assembly of the Water Consortium analyzed the negative report of the auditor in one of those meetings, that of July 8, and what it agreed was to "obtain an external legal report". "Only two days after the president was mandated to commission the legal reports," the prosecutor emphasizes, a second meeting was held, where it was agreed to "continue with the processing of the creditors' agreement in the terms foreseen, so that it is the commercial judge who decides whether the creditors' agreement complies with current legislation".
However, the Prosecutor's Office strongly criticizes this argument. "It means completely ignoring the function that the legislation grants to the commercial judge," says the prosecutor, who recalls that he only has powers to ratify an agreement between creditors and debtor, "escaping his control whether the decision to pay Inalsa's debts by the Consortium, and the way in which coverage is given to said agreement, complies with administrative law". That is to say, that the judge responsible for the bankruptcy process is not there to decide whether or not the form of payment by Inalsa or where that money comes from is legal.
"The ruling puts an end to the controversy raised by the report of the already former auditor of the Consortium," San Ginés then declared in a statement, in which he again questioned the work carried out by that professional. Now, however, the Prosecutor's Office maintains that what the Commercial Court resolved had nothing to do with the objections raised by the auditor in her report. In fact, the prosecutor points out that not even the external reports on which the Consortium was based really addressed this issue.
"These legal reports deal with examining whether the Water Consortium, as the creator of Inalsa and the true owner of the public water supply service, should be liable for the debt of its material entity, but in no case do they examine whether the loan formula, or the assignment or transfer of future rights that the Consortium makes of a service originating in a concession, violates any legal precept," the Prosecutor's Office emphasizes.
Asks the Commercial Court to qualify the bankruptcy
In addition, the Prosecutor's Office considers that the creditors' agreement itself shows that the bankruptcy qualification section should have been opened. This involves determining whether the bankruptcy is declared guilty, which would mean that Inalsa's managers would be liable with their assets. In fact, in his writing, the prosecutor reveals that he has already addressed the Commercial Court Number 1 of Las Palmas to proceed "to the immediate opening" of this procedure, "with the purpose of purging the possible responsibilities in which the administrations of Inalsa could have incurred in relation to the causation or aggravation of the state of insolvency of the same".
In this regard, the prosecutor recalls that the agreement set a "wait" of five years to carry out the qualification of the bankruptcy, which have not yet elapsed, but the Prosecutor's Office has demanded that it be initiated now. In any case, he clarifies that this does not prevent the initiation of this criminal investigation as well, since he considers that the facts "could constitute a crime of punishable insolvency".
In a forceful writing, the prosecutor concludes that there are indications of crime in several of the facts denounced by Alternativa Ciudadana, and that date back to 2006. For this, he has analyzed different documentation, including the reports of the bankruptcy administrators, the audits of Inalsa and the entity's own accounts.
"Accounting irregularities for high amounts"
"It is unknown how, having verified the accounting irregularities and for such high amounts, no measure was taken by the administrators of Inalsa since 2006 to avoid their reiteration and clarify the destination of these funds that, as amounts obtained for the provision of the water supply service, are considered public funds," the prosecutor emphasizes in his writing. Among other "verified irregularities", the Prosecutor's Office emphasizes the "imbalances related to inventories, repairs or spare parts", including material that did not appear registered in Inalsa's warehouses, as well as the unreconciled differences between the data related to billing and collection".
From this, he asks that the former councilor of Inalsa, Plácida Guerra, and the former manager of the company, Rafael Elorrieta, both convicted in the Unión case for the payment of false invoices to Francisco Rodríguez Batllori, initially respond. However, the prosecutor clarifies that the list of "responsible parties" could be expanded during the judicial investigation. In fact, a good part of the facts that the prosecutor considers could have been criminal do not correspond to the stage of Plácida Guerra at the head of Inalsa, since she left that position in the past legislature.
