There is a high risk of corruption in Spain’s public procurement sector. Almost half of businesses believe corruption has prevented their company from winning a public tender in the past three years (European Commission, Feb. 2014). A majority of firms report that too close links between politicians and businesses leads to corruption (European Commission, Feb. 2014). Businesses believe that favoritism in the decisions of public officials and diversion of public funds are both common (GCR 2017-2018). Nearly half of Spanish citizens believe officials issuing public tenders are corrupt (Eurobarometer 2017). Alleged corrupt practices, particularly kickbacks, are endemic in the construction and waste-collection sectors. Other common irregularities in public procurement procedures involve tailor-made specifications for particular companies, abuse of negotiated procedures, conflicts of interest in the evaluation of the bids, collusive bidding, and amendments of contractual terms after conclusion of the contract (EUACR 2014). Added to the list in a report published by the Spanish Court of Auditors is the use of unjustified emergency procedures, the splitting of contracts into minor ones, unjustified contract modifications, and unjustified exceptions for the obligatory publishing of tenders (Corruption Research Center Budapest 2015). Procurement corruption and mismanagement is particularly widespread in local politics, where municipalities often suffer from poor oversight mechanisms and where local officials can act with discretion (European Commission, Feb. 2014; EUACR 2014).

In Spain’s biggest corruption case, 40 people are to stand trial. Among them several politicians and businessmen, including three former treasurers of the ruling Popular Party (PP) and even former Prime Minister Rajoy himself. The date has not yet been set. The case revealed the far-encompassing kickback scheme maneuvered by the politician and leader of a group of corrupt businessmen, Francisco Correa Sanchez. The businessmen allegedly paid kickbacks to PP governments in Madrid, Castilla-La Mancha and Valencia, in return for lucrative contracts. Luis Barcenas, former PP treasurer, allegedly handed out envelopes of money to PP ministers for as long as he managed the finances of the party, while former Prime Minister Rajoy was at the receiving end of an annual sum of EUR 25,200 in cash. The courts have ordered 36 of the 40 suspects to pay a combined bail bond of EUR 449 million. The 40 suspects will stand trial on crimes carried out between 1999 and 2005, yet investigations are still looking into the connected crimes which have continued into 2006 and 2009 (Olive Press, Feb. 2014; The Local, Mar. 2015). As of late 2017, the case is still ongoing; Rajoy testified in court that he had no knowledge of the illegal funding racket in his party (The Guardian, Jul. 2017). In May 2018, Spain’s High Court convicted 29 people, including a number of senior officials from the PP, to a combined 351 years of imprisonment (Politico, May. 2018). In addition, the PP was ordered to repay EUR 245,000 it had received in kickbacks (Politico, May. 2018). Mariano Rajoy was forced to resign in the wake of the scandal after losing a vote of no-confidence in parliament (BBC News, Jun. 2018).

Companies are recommended to implement special due diligence procedures to counter the likelihood of encountering corruption in Spain’s procurement process.