European bankers have enlisted help from many quarters in the struggle against government regulation. But few can boast of a line-up put together by Miguel Castillejo, the president of Cajasur, in the south of Spain.
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Priest: In the name of the father, the son and |
Castillejo has been embroiled in a long struggle for control of the bank with the regional government, the Junta de Andalucia. Last month Castillejo finally prevailed, with a little bit of help from God and the trade minister.
Cajasur is an unusual financial institution. Founded by the church and part-owned by the regional government, it is also one of few banks in the world to be run by a priest: Castillejo himself. In commercial terms, Castillejo has certainly done a good job. “As in the miracle of the loaves and the fishes,” one in-house eulogy told him, “you have had the wisdom to take a small savings bank from Cordoba and transform it into the second largest in Andalucia and one of the most important in Spain.”
But Andalucia’s junta was concerned about Cajasur’s other responsibilities. Unlike commercial banks, Cajas de Ahorro, regional savings banks, are owned by the state and foundations, so they direct their profits to social projects rather than shareholders. The junta felt that Castillejo could have done more in this respect. Although Castillejo is profuse in his devotion it doesn’t prevent him from taking his share of worldly goods. His total pay in 2001 was over e3m – this in a bank with deposits of e7.5 billion. The conflict between God and mammon is at the heart of the affair.
The problems began in the mid-90s when Andalucia’s socialist-controlled junta introduced a new law governing the regional savings banks. The law was designed to increase the Junta’s control over the cajas.
Priest appeals for intervention Castillejo interpreted this, fairly accurately, as a direct attack on his power base. He appealed to the newly-elected centre right national government of José Maria Aznar’s Partido Popular and thus set in motion a drawn-out legal process. Towards the end of last year, the plot thickened when the national government’s new financial law was published. It included clauses which approved Castillejo’s request to reduce the representation of the local government on the board at Cajasur, effectively overruling the junta.
Meanwhile, in Cordoba, the bishop, Javier Martinez began to voice his concerns that the role of bank president was incompatible with that of a priest.
In response, Castillejo embarked on a comprehensive charm offensive. He went to see the papal nuncio in Madrid and then on to the Vatican in search of support. He has also courted the Spanish press.
“Perhaps this is the cross I have to bear,” he told the conservative Spanish daily ABC, “I must fulfill the historic duty that has been entrusted to me. I must save this institution that the church has bestowed upon me and prevent it passing into other hands.”
“My social obligations, both in material terms and in compassion, are far greater than those of any other priest,” he told El Mundo.
And so it proved. At the end of February an investigation by the junta into Cajasur’s accounts revealed not only that Castillejo’s remuneration was almost e3.4m in 2001, but also prompted it to make a number of accusations of embezzlement, false accounting and unjustified expense claims against the priest and other directors in the bank. At the beginning of March the anti-corruption office of the public prosecutor was authorised to begin its investigation into the allegations. However, a Cajasur spokesman is not unduly worried. “The Junta is always making charges against us,” he says.
Meanwhile Castillejo’s charm offensive seems to have paid off. On March 13 national trade minister Rodrigo Rato approved the changes to the constitution of Cajasur – increasing the church’s presence and reducing the state’s.
The following weekend the Vatican announced that the troublesome priest, Javier Martinez, was moving from Cordoba – with a conveniently timely promotion to archbishop of Granada. The move had long been rumoured as observers became increasingly sure which way the church would side. No other senior figures had spoken out in support of Martinez, even when Castillejo disobeyed his order to postpone changes to the bank’s constitution. Castillejo had enjoyed public support from senior church figures such as the archbishop of Seville.
In a written statement Martinez insisted that his move to Granada had nothing to do with the Cajasur saga. But he went on to add: “The people of Cordoba should be able to see Jesus Christ in the Church and only Jesus Christ. The clergy should serve to make Christ recognisable in a purer, simpler, more authentic way. And for nothing else.”
Castillejo wasn’t bothered. The new constitution was approved at a board meeting and a good week for him concluded with his non-appearance before the junta. Instead, he wrote them a letter saying that the ministry of finance now had jurisdiction of the caja.
With the public prosecutor’s anti-corruption office still conducting its investigation, there is a chance that Castillejo may yet have to answer charges. But if, as he claims, he has God on his side, the prosecutor may be hard-pressed to make them stick.
