Spain PM to speak out on corruption scandal

Fresh allegations of corrupt payments in Spain's ruling party raised pressure on Prime Minister Mariano Rajoy Saturday as he prepared to speak out for the first time since being named in the scandal.

Rajoy was due to speak at an emergency gathering of party leaders which he called after his conservative Popular Party was forced to deny reports that he and other top members received secret payments.

The scandal came at a tense time for Spain and for Rajoy, who last year defied speculation that the country would need a financial bailout only for a political scandal to erupt in the new year.

Leading centre-left newspaper El Pais on Thursday published account ledgers purportedly showing that donations were channelled into secret payments to Rajoy and other top party officials.

The party has said the ledgers published by El Pais were false and insists that its accounts were transparent. But more allegations emerged in the press on Saturday.

El Pais and centre-right daily El Mundo said police had found accounts revealing that Ana Mato, now health minister, and her then-husband received gifts and travel expenses between 2000 and 2004 from suspects in a separate affair.

Mato denied receiving any payments and Jesus Sepulveda, who was her husband and a mayor at the time, said he was the only one answerable for the transactions.

The allegations gave a bitter twist to protests by Spaniards suffering in a recession that has thrown millions out of work, while the government imposes tough spending cuts and other measures.

Protesters say ordinary Spaniards are being made to pay for an economic crisis brought on by the collapse of a construction boom which many blame on corrupt politicians and unscrupulous banks.

Demonstrators rallied outside the Popular Party's headquarters in Madrid on Thursday and Friday, calling for Rajoy's resignation. Protestors on Twitter called for further demonstrations during Saturday's meeting.

An online petition at calling for Rajoy to resign, launched on Thursday, had gathered more than 600,000 signatures by Saturday morning.

On Thursday El Pais cited ledgers kept by two former party treasurers, Alvaro Lapuerta and Luis Barcenas, apparently showing payments including 25,200 euros ($34,000) a year to Rajoy between 1997 and 2008.

Former IMF managing director and senior Popular Party official Rodrigo Rato was shown receiving similar payments. He, too, denied the allegation.

The newspaper said the alleged fund was made up of donations, mostly from construction companies, adding that such payments would be legal as long as they were fully declared to the taxman.

El Pais on Saturday also published other extracts of accounts found by police which it said backed up some of the payments shown in the so-called "Barcenas papers".

Deputy Prime Minister Soraya Saenz de Santamaria insisted Friday that the "government enjoys great stability" and defended Rajoy personally.

"I have been working with him for 12 years... and what I have seen in that time has always been exemplary conduct. I have never seen him break the rules," she said.

Saenz added however that "undoubtedly, the institutions of Spain need to be strengthened," with numerous corruption cases pending.

Even the royal family has been hit by scandal, with King Juan Carlos's son-in-law Inaki Urdangarin being investigated for suspected embezzlement.