Rajoy's Popular Party has been equally shaken by widespread newspaper reports that the same former party treasurer, Luis Barcenas, also allegedly distributed under-the-table bonuses to party leaders in payments from construction firms.
Spain's economic crisis stems greatly from the collapse of its once booming real estate sector in 2008.
The Popular Party has denied all wrongdoing and promised Monday it will commission an external audit of its finances to fend off the corruption allegations. Spokeswoman Maria Delores de Cospedal said an internal investigation would be conducted and that anyone found to have received inappropriate payments would be expelled from the party.
The Barcenas case follows other scandals involving bankers, politicians, town councilors and even the royal family.Chief among them has been the perceived mismanagement of one of the country's top financial entities, Bankia by former Popular Party minister and ex IMF chief Rodrigo Rato. Bankia last February reported â¿¬309 million in profits for 2011 but three months later changed that to â¿¬3 billion in losses. It has since been nationalized and been given a bailout of â¿¬18 billion. The royal family, meanwhile, has been busy battling to limit the damage caused by the naming of the king's son-in-law as a suspect in a case in which he and his partner allegedly funneled about â¿¬5 million in public money their nonprofit foundation received for conferences between 2004 and 2006 to other companies they controlled. A recent poll by the government-run Center for Sociological Research showed seven out of every 10 Spaniards felt the country's political situation was bad while political parties were ranked as the country's third biggest problem after unemployment and the economic crisis. "People are angry and this can be seen in the polls. But so far it hasn't spilled onto the streets. There is still a sense of skepticism that no matter how much you protest you're not going to achieve that much," said Olmeda.