(Bloomberg) — Rodrigo Rato, the former head of the International Monetary Fund and deputy prime minister of Spain, was detained by customs agents in Madrid on Thursday night as the tide of corruption allegations swamping the country’s political establishment reached a fresh high.
Rato, 66, is being investigated for possible money laundering after he took advantage of a 2012 tax amnesty to repatriate previously undeclared offshore funds, Justice Minister Rafael Catala said earlier on Thursday. After a court ordered a search of his home in the exclusive neighborhood of Salamanca in downtown Madrid, Rato was led to a car wearing a dark blazer and driven away by agents shortly after 8 p.m.
“This will be the image the people remember from the crisis,” Jose Carlos Diez, an economics professor at the University of Alcala, said in a telephone interview. “This is the iconic moment that marks the end of a cycle.”
Once the face of Spain’s economic resurgence after guiding the country into the euro, Rato became the most senior international policy maker in his country’s history when he took over the IMF in 2004. He cut short his term in Washington to return home and was handed the chairmanship of Bankia SA, which collapsed on his watch in 2012 forcing Spain into a bailout.
Rato is already an official suspect in the National Court’s criminal investigation into Bankia. He told parliament he is innocent of any wrongdoing.
In 2013 the former treasurer of the governing People’s Party Luis Barcenas said that he’d run a secret slush fund for senior officials including Rato and Prime Minister Mariano Rajoy for over a decade. Rajoy denied receiving the payments and Rato’s lawyer Ayala declined to comment through an assistant when contacted at the time.
