Spanish minister under fire over talks with ex-IMF chief Rato

MADRID (Reuters) - Spain's interior minister said on Tuesday he would give an explanation to parliament over a private meeting he held with Rodrigo Rato, a former IMF chief who is the focus of a tax and money laundering investigation.

Opposition politicians say it was improper for the minister, Jorge Fernandez Diaz, to meet someone who is under investigation and suggested Rato, a former leading light in Spain's conservative ruling People's Party (PP), might be receiving preferential treatment.

Police unions also criticised Fernandez Diaz over his July 29 meeting, held at the Interior Ministry, with Rato, a former Spanish economy minister.

The meeting could prove damaging for Prime Minister Mariano Rajoy's PP several months before a parliamentary election in which it faces a challenge from insurgent parties which have highlighted corruption in political and business circles.

Facing calls to resign, Fernandez Diaz asked to appear before a parliamentary committee as soon as possible to explain the meeting.

The interior ministry has insisted the meeting dealt with an unspecified personal matter and had nothing to do with the investigation, but Rato told El Pais newspaper they had discussed his personal situation as well as political issues.

"The minister must explain to us if he is lying or Rato is lying and whether they spoke about the police investigations," the opposition Socialists' parliamentary spokesman Antonio Hernando told reporters.

"There are no personal subjects when you meet an accused person at the ministry," he said.

Police responsible to the interior ministry are involved in the money laundering investigation of Rato.

RATO DENIES ANY WRONGDOING

A separate case that is examining what investigators believe was the flawed 2011 flotation of bailed-out bank Bankia, where Rato was chairman, is currently underway.

Magistrates are also looking into the alleged widespread misuse of company credit cards for personal expenses during Rato's tenure at the bank.

Rato, 66, denies wrongdoing in all the cases.

He served as managing director of the International Monetary Fund from 2004 to 2007 and before that was Spain's deputy prime minister.

Hernando said the prime minister must have known about the meeting, but Rajoy dodged questions about the affair, saying Fernandez Diaz would address parliament on Friday.

The parliament said no date had been confirmed for the minister's appearance.

(Additional reporting by Inmaculada Sanz; editing by Sarah Morris and Gareth Jones)

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