"I only saw the last sheet, the one with the payment order, because all the others were removed." That is what the treasurer of Arrecife, Antonio Cabrera Panasco, declared about the 250,000 euros that the City Council paid to the owner of Proselan, José Daniel Hernández Arráez. The treasurer, who testified as a witness at the trial this Tuesday, explained that until 2008, the payment orders came to him "more complete." However, in that year they did not send him the files, only that last document that is the one that obliges him to make the payment.
In the case of the 10 invoices paid to José Daniel Hernández and his company, they were signed by the three defendants in the case: the head of the Technical Office, Rafael Arrocha, the former Finance Councilor, José Miguel Rodríguez (who acknowledges that with his signature he "contributed to embezzling" that money), and the auditor, Carlos Sáenz. And the latter, according to the treasurer, is the one who has the mission of auditing the payments.
"The Treasury manages the funds and controls the collection, but the Intervention is the one that does the prior audit," declared Cabrera Panasco, detailing that the auditor's job is both the formal audit (related to the budget of that expense) and the material audit (confirming that the service has actually been performed). "If the payment order is signed, it is mandatory for the treasurer," he explained.
"I received pressure to pay invoices"
In his first statement in the Courts during the investigation of this case, Cabrera Panasco stated that at that time he received "pressure" as treasurer to pay certain invoices. And he confirmed the same thing again at the trial, although when questioned by the defense he specified that he had not received them in the specific case of payments to Proselan.
"The objection made by the treasurer is that it was very simple, that it had to come with more foundation. But even so, I signed," declared José Miguel Rodríguez, who was then the Finance Councilor, during his statement as a defendant last Monday. In that statement, the former mayor explained that he signed the payment of the invoices to the owner of Proselan, despite that warning from the treasurer, because he had previously "benefited" from payments to other companies, for which he is accused in other parts of Unión (and already convicted in one of them). And according to Rodríguez, in all cases there was the same "modus operandi" in which the one who "had to always be there was Carlos Sáenz." In fact, he explained that he "consented" to sign those invoices to José Daniel Hernández because before the auditor "had consented to others in the same way so that I or my party could profit."
More than 200 transfers in one day
When questioned by the lawyer of one of the defendants, the treasurer explained that on the same day that the invoices were paid to that businessman, December 26, 2008, the City Council made more than 200 transfers for a total amount of about 5 million euros. "So it wasn't strange that in December, at the end of the year, the payments were finished adjusting?" the lawyer insisted. "If there was liquidity, yes," the treasurer replied.
In the case of payments to Proselan, he also explained that in addition to stopping the payment of another four invoices from the same businessman in 2009, the City Council also initiated a reimbursement procedure to claim the return of the 250,000 euros paid in 2008.
It was after Operation Unión broke out and the government pact between the PSOE and the PIL was broken that the Department of Festivities became aware of those invoices and warned that the work had allegedly not been provided. For this reason, they adopted these internal measures and also reported the events. Now, in this trial, the City Council is present as a private prosecution and demands the return of that quarter of a million euros.
"Have you seen any increase in assets in Carlos Sáenz?" one of the defense lawyers asked Cabrera Panasco. "I don't know, I have no relationship with him," the treasurer replied.
Work or service?
Another of the axes of the interrogations during the trial has revolved around the type of "contract" in which the alleged work provided by José Daniel Hernández fit. According to the defense of the accused, it was a construction contract. According to the Prosecutor's Office and the private prosecution, a service contract. And the difference is essential, because in the case of works, the maximum amount to award them directly, without competition, is 50,000 euros; while in services the limit for it to be considered a "minor contract" is 18,000 euros.
In the case of José Daniel Hernández, he carried out alleged "assembly and use of lines, poles, projectors, panels, accessories and maintenance" for different Arrecife festivals. And for each of those festivals, he charged two invoices (one for assembly and one for disassembly) that totaled more than 40,000 euros.
"According to the text seen on the invoice, my opinion is that it is a service. There may have been some construction, but the most important part is service," the treasurer declared in this regard during the trial. And the same thing was pointed out by the coordinator of Festivities of Arrecife, José Nieves, who explained that "lighting is contracted as a service."
For her part, Elena Martín, who was then the head of Contracting (daughter of Dimas Martín and charged in another part of Unión), also appeared as a witness this Tuesday but did not clearly state whether it was a construction or a service. After explaining that she has been "detached from the Contracting department for a couple of years" and "on leave for a year", Elena Martín pointed out that "if nothing else is specified", an electrical installation is "a construction". However, the prosecution maintains that in this case it was not an "installation" that was being carried out, but an alleged specific assembly and disassembly for the festivals.
"Difficult to discern", according to the former head of Contracting
"For me, in some cases, it is difficult to discern whether it is a construction or a service," said the person who was the head of Contracting of the City Council during the trial. Asked if in the case of these invoices she went to the auditor to ask him if it was a construction or a service, as she apparently said in her first statement as a witness, the official stated that she "does not remember", although she considers that it "would be normal" that she had done it, because "he is a colleague".
Whether the alleged commission was for construction or service is not only important to determine whether the work should be put out to tender or not, but also because of an additional charge that was added to the invoices. Specifically, the prosecutor considers that there was a "fraudulent" increase of 22 percent, for concepts that should not be included in a service contract (the surcharge of 16 percent for general expenses and 6 percent for industrial profit can only be applied in construction invoices).
In addition, part of the defense of the auditor and the head of the Technical Office is also based on maintaining that they were minor contracts. In the case of Rafael Arrocha, because the opposite implies that he would have had to put the award out to tender, instead of making the alleged commission directly to that businessman. In the case of the auditor, because his defense maintains that he is not obliged to audit minor contracts.
His lawyer asked a worker from Arrecife, who served as accidental auditor in 2014, Sandra Leticia Estellé Padrón, about this point. And according to this municipal employee, "minor contracts are not audited", because the law does not require it. However, during his statement, the treasurer of Arrecife assured the opposite and defended that an audit must be carried out in all cases.
