When José María Aznar was Prime Minister of Spain, he put Miguel Blesa in power at Caja Madrid. The political bickering and backscratching that erupted around the bank obfuscated Blesa's extreme management mistakes. But now a judge has sentenced Blesa for his actions at Caja Madrid.
Blesa was named CEO of the banks thanks to a pact between the Peoples' Party and the Spanish Socialist Workers' Party even though he did not have the necessary background and profile for the job. But he pursued the position, asked Aznar for it and got what he wanted. Even though Blesa is fully responsible for his actions, it is apt to ask what bank managers did to protect Caja Madrid from Blesa. They structured agreements, looked the other way and gave their consent to deals like the Citi National Bank of Florida purchase, which was carried out without proper approval from the Madrid government.
Blesa tried to push the deal around the bank's administrative board, which approved it unanimously. Most of the people seated at the boardroom table didn't have strong business knowledge, but got there because they belonged to a particular political party or labor union -- a corruption of the democratic process -- without saying no to cushy salaries they received for jobs poorly done. In Madrid, Gllardón, the Finance Ministry councilman Juan Bravo and ana Botella struggled with Esperanza Aguirre for control of the bank because she was getting them financing that was not part of the bank's budget. This was one more addition to the dangerous cocktail of political and economic interests. Fortunately, financial reforms have allowed business to go back to normal to some extent by lessening the harmful blend of politics and finance.
