Rueda de prensa contra impunidad Santander y sus abusos en el mundo

The End of the “Botín Doctrine” -> SANTANDER Bank in the dock or #BrandEspaña: What the hell are we exporting -> SANTANDER is the main culprit for the bankruptcy of Puerto Rico



By 15MpaRato y Xnet

Bad times are coming soon for Santander.

The justices finally dared to touch the once untouchable Santander Bank, whose president benefited from custom-made doctrines that helped him avoid being prosecuted. This became possible with the famous “Botín Doctrine” in which bankers were pardoned, an example of this is the scandalous case of Zapatero with Alfredo Sáenz. These doctrines and pardons exemplify the collaboration between politicians and bankers to plunder the citizens.

We need to be aware that the great step of this small victory brings against the impunity of Santander, by implicating 7 of its directors for money laundering. We also need to be aware of the enormous public pressure and the weight of the evidence from the Falciani list that have been necessary in order for this moment to finally come. Public pressure and vigilance by everyday citizens must continue now more than ever.

We must acknowledge that today, June 12, 2017 is a historic day. For us this must be the end of the “Botín Doctrine”. Not only this, Santander Bank is taking over Puerto Rico. Today we must make visible that it is not just “bad banking practices” but global designs that perpetrates abusive, anti-democratic and economically devastating models.

We must make clear, as we did with 15MpaRato in the Bankia case that it is not about dysfunctions or isolated facts, but about a modus operandi of systemic and far-reaching coexistence.
We convened a press conference in the presence of deputies of the “Commission for the Investigation of the Crisis of the Financial Sector and the Bank Bailouts” so that this historical opportunity and this responsibility are not missed, because as we are going to explain next it is global.

That is why today we will talk about Santander in two aspects:
1 – how it operates here and what it represents.
2 – how it operates in a globalized world and what consequences of domino effect it can create globally.

Not everyone knows that Santander is the main architect of the recent bankruptcy of a country: Puerto Rico.

Let’s go piece by piece:

Santander: a modus operandi endorsed by the State
By Alex Madariaga – Attac

The Santander Bank is the largest financial institution in Spain by profit volume, and it emerged strengthened by the financial crisis.

Although Santander has not been one of the entities stained by loud mismanagement scandals such as with Caja de Ahorros or Bankia, in which perhaps due to the strong politicization of its managers led them to feel completely immune and to act in an openly criminal way with an absolute sense of impunity, and therefore it is not an immaculate entity. Its operations have simply been much more professional and careful; It is a traditional, non-politicized Bank, and that is where it’s authentic power resides. Really the level of political and media influence of Santander Bank has been far superior to that of other entities, and this has allowed it to escape unharmed from possible scandals.

The tax regularization of the Botin family, the subsequent judicial process and its shameful ending with the so-called “Botin Doctrine” shows us the level of power we are talking about. How is it possible for the family that owns the main bank of the country to acknowledgea millionaire tax fraud millionaire (200 million euros, the largest known) through accounts of HSBC in Switzerland and the subject is simply filed away and forgotten?

The family declared this income not spontaneously, but due to the leaking of their data through the so-called “Falciani list”, and there everything remained. There was no investigation as to whether there were more accounts in other places, the origin of the funds, the operatives, the laundering, etc. Nothing. The subject was filed away thanks to a doctrine constructed “ad hoc” for the patriarch of the family, and without accusation by the prosecutor or a private party accusation, there is no case. Shameful.

For years it has been known through the publication of the reports of the entity, that Santander Bank has subsidiaries in tax havens (21 in 2015). According to data from its own reports and annual accounts in these subsidiaries, a profit of almost 1 billion euros was obtained, with zero or low taxation. Is this legal? Possibly; But this is only what is declared and could be only the tip of the iceberg. How far does the use of offshore institutions go by Santander? What is hidden in these subsidiaries? It is surprising the lack of investigation of these issues by the national authorities. Another example of the royal treatment given to Santander Bank.

The investigation by the National Court of the upper echelons of the bank for money laundering opens a trail to justice that cannot fade away. The highest leaders of the bank responsable for the prevention of money laundering must now make declarations before the Judge of the investigating court number 5 because their activity allegedly aided in concealing funds to those investigated by the Spanish Treasury for the List Falciani. Again the HSBC. How is it possible that the executives responsible for complying with the Law on Prevention of Money Laundering, use all their knowledge to collude, allegedly, with the laundering of fraudsters investigated by the Treasury? This fact should be investigated in depth. We must stop the impunity of these entities.

Santander is responsible for the bankruptcy of Puerto Rico
Puerto Rico: The Corporate Colony

By Platform Citizen Debt Audit (PACD)

Puerto Rico faces one of the most acute crises in its history, the public debt for 2017 is approximately 74 billion dollars (10 times higher than the average of the different states of the United States), which represents 99% of GDP. That is, the public debt is similar to the anual production of the island, evidencing the unsustainability of this and the economic catastrophe that looms.

The public debt relative to the current population of Puerto Rico is approximately $19,867; that is to say that each individual in Puerto Rico shoulders a debt of approximately $20,000, which represents a little more than what a worker earns annually in the country.

Banco Santander is the primary responsible party for this debt. We can say that it is practically and almost literally the owner of the population of Puerto Rico.

Digression – Carlos García: The Rodrigo Rato from Puerto Rico
By Hedge Clippers (Puerto Rico and USA), Puerto Rico Student Communication Center

Carlos García is the Rodrigo Rato of Puerto Rico. He is the example of the revolving door between the government of Puerto Rico and the Santander Bank. He was executive of Santander Securities, which handles municipal bonds, toxic bonds that were the main culprits of the population’s brutal indebtedness – when he was appointed to head the Governmental Development Bank of the island in 2009. As President of the GDB he was the architect of the law that dictated the layoffs of thousands of government workers.

The same law opened the way for more toxic loans on the island – just like Rodrigo Rato with the preferential loans. Garcia returned to Banco Santander when he left the GDB. At the time of the recent bankruptcy of the country, Garcia was placed on the Fiscal Control Board a colonial and anti-democratic system, that the United States government has imposed to control Puerto Rico, politically and economically – an equivalent to the Troika.

Despite being called “Freely Associated State” Puerto Rico remains a US colony, and one more territory of this country. Unlike all other US territorial communities, whether cities or states, Puerto Rico can not declare bankruptcy, as Detroit did in 2013. That act would allow it to renegotiate its debt without the threat of lawsuits that the creditors always carry out in this type of situation.

Odious and Unsustainable Debt: The origin of this debt stems largely from the colonial status of Puerto Rico and from US domination over this territory. Thanks to a series of tax breaks, especially the famous triple tax exemption on Puerto Rican debt securities, it became,for a while, a tax haven for US companies and investors. The crisis of 2008, the decline in tourism and austerity measures taken in the last 15 years have finally defined the state of the island. The consequences of this situation are simply disastrous for the population, which is suffering from a real humanitarian crisis with a deepening of poverty and inequalities. Hundreds of schools have been closed, and so will hospitals because of lack of resources and personnel; the emigration to the United States reaches record levels.

Illegal debt: The VAMOS4PR group, which brings together civil society organizations, trade unions, local elected officials and ordinary citizens, set up an audit commission. They have already produced a first report pointing out several indications of illegality of Puerto Rico’s debt. The debt was contracted in opposition to the Constitution of the island.

Effectively the Puerto Rican Constitution sets out several obligations for the government that are being violated:

  • The maintenance of a balanced budget and the prohibition of borrowing to end the deficit. However, Puerto Rico has borrowed more than 30 billion dollars to finance its deficit since 1979.
  • The prohibition of spending more than 13% of their income on the payment of interest on the debt. Currently, this spending ranges from 14% to 25%.
  • The prohibition of issuing securities with a maturity of more than 30 years. However, the government of Puerto Rico transforms the debt into a “snowball”, as it occurs in almost all the countries of the world, that is to say that it borrows to repay the previous debts. The commission cites as example a debt issued in 2014, contracted to refinance a debt issued in 2003, and that same debt was contracted to refinance a debt of 1987.

Illegal debt: Despite the fact that the Constitution of the island contains very strict rules on the management of public debt, the State and public companies were able, with the help of the banks, to reach an absolutely outrageous level of indebtedness. And this thanks, especially, to the phenomenon of the capitalization of interests.

  • Capital Appreciation Bonds (CABs): These are obligations over which the issuer will not pay interest or refund the principal until the maturity of the security. But, in the meantime, each year the accrued interest is converted into capital and added to the initial capital. Of the $37.8 billion of CAB debt in Puerto Rico, the initial capital represented only $4.3 billion. Therefore, there is talk of an amount of $33.5 billion of interest, and therefore of benefit to the banks. If it is calculated on classical bonds, it would be equivalent to an interest rate of 785%!
  • Refinancing the debt: Although illegal with respect to the Constitution, Puerto Rico seems to be a master in the art of making its debt enjoy the “snowball” effect, that is to say it contracts new debts to be able to repay the old ones. Although it is a current practice in most countries, it reaches its maximum expression as far as the island is concerned. Puerto Rico and all public companies currently accumulate $134 billion of debt, of which about half, exactly 61.5 billion dollars, were issued to refinance old debts.

PROMESA: The Act establishing the Fiscal Control Board “the Troika of Puerto Rico” to which the Puerto Ricans call the Junta (in reference to the Military Dictatorships):

To provide a response to the debt crisis of Puerto Rico – without the least worry for the humanitarian crisis that accompanies it – the federal government of the United States used its heavy artillery, with nothing less than a mini home grown IMF called Fiscal Control Board, that is, a Fiscal Control Commission, to which the inhabitants of Puerto Rico have given it the nickname “La Junta”.

This commission, instituted by the PROMESA law, passed in July 2016, is made up of seven members, four of whom are appointed by the Republican group of the House of Representatives and the other three by the Democrat group. The Governor of Puerto Rico is also a member of the Commission, but without any decision-making or voting power. The function of this Commission is to restore the “fiscal responsibility” of the government of Puerto Rico and thus allow it to access, once again, the financial markets to finance its investments.

But the Commission does not have the task of “refloating” Puerto Rico, since it is not a bailout like the banks. The missing money will have to be found in Puerto Rico itself, through a wise mix of cuts in public spending, layoffs and privatizations. For those who are not familiar with this recipe, it is exactly the same as that of the Structural Adjustment Plans, the Poverty Reduction Strategy Paper, the HIPC Initiative, the Greek memos, and other bitter medicine of the same type applied for more 30 years on a large scale, without having produced anything more than a carnage from which only some vultures will benefit. Apart from its program, which will not bring any improvement to the economic situation of Puerto Rico and will further aggravate the already dramatic situation in which the population is, this Commission raises many problems in several areas:

1. It is imposed by the federal government of the United States, which the Puerto Rican people can not even choose.
2. It has the power to carry out profound neoliberal reforms, which always served only to engender more misery, inequalities and great economic dependence, without obligation to consult the Parliament of Puerto Rico, quite the opposite.
3. It is made up of people far removed from the daily reality of the population of Puerto Rico, and its Puerto Rican members have a great responsibility in the current economic situation of the island.
4. Conflicts of interest tarnish their résumés, even before their first meeting was held. (See box)

In summary, the establishment of the Fiscal Control Board reinforces the colonial domination of the United States over Puerto Rico and legitimizes it by calling the former governments of Puerto Rico irresponsible and should be placed under the superior authority of the Fiscal Control Commission.

Santander: toxic products and looting
By the PAH International Commission

In Spain we know closely the mortgage scam orchestrated by the Santander Bank through its subsidiary UCI, which granted thousands of subprime mortgages with the terrible results already well known today. Mortgages that, in many cases, were sold to companies such as Altamira, owned by the vulture fund Centerbridge Partners, at a sale price, forcing us to negotiate with them.

Who are they?
Real Estate Credit Union (UCI) is a financial institution that has developed a fraudulent system of commercialization of subprime mortgages in Spain that belongs to the Santander group. Through the network of real estate intermediaries (APIs), it places junk mortgages using customer deception through the use of complex contracting mechanisms that make the consumer believe that they are arranging a highly advantageous product. Yet, these mortgages entail a high risk of non-payment (financing of 100% or more of operating costs for people with labor instability or insufficient incomes – young people, immigrants – or for highly risky home exchange transactions), reduced lien fees, interest capitalization, promotion of the sale of VPO above its price, among other illicit conditions and serious economic and personal damage.

UCI uses the fundraising system through artificially lowered initial quotas to make the mortgage product attractive (quota-hook). The loan amount is ultimately determined by the lender, which raises it artificially through brokerage expenses, opening commission, appraisal expenses performed by an appraiser with a strategic agreement with UCI, notary expenses chosen by UCI, various types of insurance – mortgage insurance with US insurers GE Mortgage and AIG, the latter being rescued several times by the Federal Reserve in the context of the subprime crisis, etc.. Some modalities include initial periods of deprivation with capitalization of interests (anatocism, Greek ana-repetition, tokismos-usury)

1- UCI Mortgages
To show how financial mathematics can be used at the service of usury, a button: the entity deliberately charges monthly installments that do not cover all the interest accrued, so that capital increases and generates more interest. The resulting debt will be infinite, exponential, unassuming. Surprisingly, or not so much, the National Court has refused to investigate a fraudulent framework that affects half a million people. So there is nothing left to do except through civil law.

2- Mortgages Tranquility
Banco Santander again uses brands and subsidiaries to violate consumer rights. Banesto’s Tranquility Mortgages implied a misleading advertising message, because with confidence the entity was not referring to the bank’s profits, but to the fact that the quotas were stable. The appearance of stability was achieved by confusing exposure to the depreciation system and the applicable interest rate, which are two distinct elements. In sum, the bank included a system of amortization of increasing share combined with a fixed interest rate for about ten years, which would then become variable. What the bank never explained is the real scope of the progressive amortization system (with a ratio of 2 or 2.5%), which implies paying many more interest than with the usual system. And the worst: it is now when customers are beginning to discover that the system of increased amortization would remain in the period of variable interest rate. The judicial battle has just begun.

3- College Loans
Banco Santander is holding its “investments” in the university. Here is a fraud cum laude with the invaluable government collaboration. In 2007, an income-loan system was created to finance postgraduate enrollment, an instrument usually presented as an alternative to traditional scholarships. Nothing is further from reality. Although the terms of the loans of 2007 could be considered reasonable (repayment of the loan conditional on surpassing a rent of 22,000 euros and without interest), the advantages disappeared in successive calls. What better than an almighty bank’s commercial network to place poisoned loans without proper information. Today these young graduates are part of the most educated generation of our history, but also at risk of being the most precarious. Many have yet to start working and are already in debt. Fortunately they are organizing, the first step to achieve a fair solution. It is their right to do so and the reasonable thing to do in light of this predicament.

4- Santander values
Valores Santander are high-risk financial instruments that Banco Santander marketed in 2007. The bank needed money to finance the acquisition of a Dutch bank. And you already know what happens when a bank wants money… The entity created out of nothing a five-year convertible bond that targeted small lifetime savers or investors who did not know the true scope of what they were hiring. Obviously, the entity’s customers suffered substantial losses when the obligations were converted into Bank shares. Due to the widespread non-fulfillment of its information obligations, the numerous lawsuits filed in the Courts are, in general, a notable success. And is that the Santander Securities could well be known as “Santander’s preferred.”

5- Banif Real Estate
The first thing that catches the attention of the Banif Inmobiliario case is that it managed to elude the media focus promptly. The fraud figures are dizzying: 45,000 people and 2,500 million euros. Banif Inmobiliario was an investment fund involved in housing speculation. And of those powders … After the housing bubble burst, a controversial extraordinary taxation motivated that the investors wanted to rescue its money, causing the liquidity of the fund. Not even the investors recovered all their money, nor the Justice estimated its pretensions. One fact: the banker responsible for Banif, Alfredo Sáenz, was pardoned by the government in 2011. The crime for which he had been convicted had nothing to do with the Banif Real Estate Fund, but with a false claim for another murky affair.

Thousands of families seeking a better future for their children and for themselves by taking out a mortgage to satisfy their basic housing need have passed by PAH.

Banco Santander, the leading bank in Spain, treats families such as Paola, Alex, José, Vicente or Consuelo [2] as second-class citizens, forcing them to negotiate with third entities and refusing to agree to a payment. They claim that these families, who paid for years for houses that no longer have because they have been executed, continue to pay even after losing everything. This anomaly in Spanish mortgage legislation allows giants like Banco Santander to continue to profit from the vulnerability of thousands of families.

That same bank that pretended to worry when they wanted us to sell their mortgages today harasses us, lies to us, refuses to make offers in writing, and coerces us to accept unfeasible agreements that will not finish solving our problem and that will leave us and our guarantors, indebted for life.

For this reason we join the global fight against Santander Group. From Puerto Rico, where we know that this financial giant is behind the country’s unjust and unsustainable debt, to the offices in the USA, where the workers do not even have the right to organize. The families of the PAH know what it means that a few get richer without measure while thousands are left homeless and indebted for life. Today we say ENOUGH and join our struggles. We are more and now we walk together. Yes we can!

National Confederation of Bank Workers in Brazil denounces massive and improper dismissals despite the fact that the Brazilian unit is the most lucrative in the world.

Santander and labor abuses in the US and Brazil
By Action Center on Race & the Economy, ReFund America Project

Santander has threatened retaliation against its workers in the United States and Puerto Rico who are trying to organize themselves into unions.

Santander workers in the US are not unionized and do not have the salaries of their colleagues in the rest of the world. For example a Santander worker in Spain earns

$15,000 more than an average worker in the US. Also in the USA Santander is the author of the most toxic vehicle loans in which most of the victims are Latinxs or African Americans. In the USA. the CWA union, the Community Organizations New York Communities for Change, and Make The Road are working to unionize the workers of Santander in the USA to ensure that they have a voice and can defend consumers from the predatory practices of Santander.

The coordination of convening organizations is composed of:

Xnet & 15MpaRato (Catalonia / Spain) with Hervé Falciani (Responsible for the Falciani list)
La PAH (Catalonia / Spain)
– Plataforma Auditoría Ciudadana de la Deuda (PACD) (Catalonia / Spain)
– Observatorio de la Deuda en la Globalización (ODG) (Spain)
ATTAC (Spain)
Kalmanovitz Initiative for labor and the working poor-Georgetown Univerisity Washington DC (USA)
Hedge Clippers (USA and Puerto Rico)
Action Center on Race & the Economy (Chicago/Detroit, USA)
ReFund America Project (Chicago, USA)
Center for Popular Democracy (New York, USA)
Make the Road CT (Connecticut, USA)
Centro de Comunicación Estudiantil (Puerto Rico)
Confederação Nacional dos Trabalhadores do Ramo Financeiro (Brasil)


[1] Members of the Fiscal Control Board:
The Fiscal Control Board consists of seven members and the governor of Puerto Rico, but the latter does not have the right to vote in decision-making. Among those seven, four were nominated by Republican members of Congress and three by Democrats. In addition, five of them have relationships with financial institutions in the public sector and the private sector.

José B. Carrión III: Director of an insurance company, is the president of the Commission. He is a man who has a particularly good backgroud: his father was the director of the largest bank in Puerto Rico, Banco Popular (a position now occupied by his cousin). His sister works for a bank and is also a consultant on Wall Street. She is married to the representative of Puerto Rico in the United States Congress, Pedro Pierluisi, who is accused of introducing laws that benefit his wife’s clients.

Andrew G, Biggs: Republican, a fervent supporter of the privatization of social security and pension cuts when he was Bush’s economic advisor. His very presence on the board exposes the White House’s lie that the PROMESA law will protect pensions.

Carlos M. Garcia: Former Banco Santander executive, current president of the Banco de Desarrollo de Puerto Rico. He is part of the team who started the system of interest capitalization (previously developed) which served the interests and present a great advantage to his former employer. He is also the metalsmith of Law 7, which allowed the government to temporarily declare fiscal urgency and fire thousands of public sector employees in response to the financial crisis. It should be noted that the Financial Industry Regulatory Authority (FINRA) sentenced Santander a fine of $6.4 million for fraudulently re-selling Puerto Rican debt securities to individuals without informing them previously of the risk they assumed.

José R. González: is also a former Banco Santander executive in Puerto Rico, along with Carlos M. García. He worked at several banks, including Crédit Suisse in Boston.

Arthur J. González: Worked for a long period of time with the IRS, afterwards worked as a private lawyer for large corporations, and continued his career as a judge in the United States Bankruptcy Court. He had the “good fortune” of working within the three biggest bankruptcies of the last years (Enron, WorldCom and Chrysler–lacking only Lehman Brothers).

Ana J. Matosantos: The only woman in the Board, also the former director of the California Department of Finance and current president of Matosantos Consulting.

David A. Skeel Jr.: Professor of bankruptcy law.

With a team like this, one thing is certain: the creditors of Puerto Rico can sleep peacefully. All of these board members have important and personal ties with the private sector, including some direct connections with several creditors of Puerto Rico. It’s evident that they will endeavor to defend the interests of creditors, and certainly not those of the people.

As an anecdote: one of the advisors of Rob Bishop, the republican author of the PROMESA law, Bill Cooper, wrote the part of the PROMESA law which concerns the island’s energy transition to natural gas, and it was implied that he could be the chairman of the Fiscal Control Board. In the end he had to resign due to conflicts of interest. Bill Cooper had forgotten to mention that he had been the President of the Center for Liquefied Natural Gas, the group that lobbied for the producers and conveyors of this fuel.


Paola and her ex-husband bought a house to start forming their home outside their country. When the two became unemployed, the economic problems increased and culminated in the rupture of the relationship. Even though Paola started a new life and was about to become a mother, she still had the mortgage problem.

With an income of €400 from Paola’s unemployment and 1,200 from her ex-husband, Aktua (the company to which Santander sold her mortgage) assumed she would cover the mortgage and rent of the house in which the ex-husband lived. Seemingly, eating and living was none of her concern. The house, which was appraised at the time of purchase for 234,000 euros was re-priced at 69,000 euros and Aktua intended to leave a debt of 40,000 euros which was more than double the debt that would have been left in the case of going to auction. The intransigence and bad services of Santander caused tremendous stress in the final weeks of Paola’s pregnancy. In the end, with the support of the PAH, and after several actions and occupations, Paola got a “dación en pago” and social rent in her very own house.

Alexis and Lucia are a marriage with a 9 year old son who for 3 years fought to get the “deed in lieu of foreclosure” without any result. During this time Banco Santander, with its policy of non-negotiation, only made them dizzy. Leaving them without a solution and silence as an answer, even though they had presented all the required documentation on numerous occasions.

By the 3rd year Banco Santander informed Alexis and Lucia that their mortgage was to be managed by Altamira (sold to the vulture fund Centerbridge Partners) and that they had to negotiate with them. Altamira continued to systematically ignore the family. Only the pressure put on by the PAH was able to get Alexis and Lucia their “deed in lieu of foreclosure” and social rent.

Vicente Ferrer and Consuelo, who are 77 and 70 years respectively and have serious medical problems (him with a serious depression that leads him not to want to go out and she with type B diabetes) witnessed as one day Banco Santander, through Aktua, was auctioning their house.

Con unos ingresos de 700 € al mes tenían que hacer frente a sus abultadas facturas médicas y a las cuotas de otros préstamos personales que les concedió el Santander en su momento para que fueran pagando la hipoteca. Con deudas con la comunidad de vecinos y con las compañías de luz y agua Vicente y Consuelo no tenía quien les pudiera ayudar. Su único hijo los avaló pero su vivienda estaba también hipotecada y en proceso de ejecución con otra entidad. La oferta de Aktua era quedarse con su casa, con todo lo cobrado hasta entonces y dejarles con una deuda de por vida de 30.000 €. Con la lucha de todas conseguimos la dación en pago y un alquiler social.

With an income of 700 € monthly, they had to pay their inflated medical bills and other personal loan installments that Santander provided them at the time to pay the mortgage. With the debts they owed to their neighbors and to the water and electricity providers Vicente and Consuelo did not have anyone who could help them. Their only son backed them but his home was also mortgaged and in the process of being foreclosed with another entity. Aktua’s offer was to take their house along with everything charged to them until then and leave them with a lifetime debt of € 30,000. With everyone’s effort and struggle we managed to get a “deed in lieu of foreclosure” and a social rent.