From Power to Prosecution: Spain’s Socialist Party on the Brink

Financial corruption or outright robbery is a common theme in Left-wing politics, going all the way back to Stalin robbing banks to finance the Revolution.

From The European Conservative

By Javier Villamor

The party that governs Spain may soon be in the dock for illegal financing.

Spain's entire Socialist Party (PSOE) is facing possible indictment for illegal financing, as a corruption investigation targets key figures in Prime Minister Pedro Sánchez’s inner circle. An extensive report drafted by Spain’s Civil Guard police, known as the Cerdán report, accuses senior party officials, including two former organization chiefs and a close adviser to Sánchez, of running a scheme to collect illegal commissions from public contracts. Legal experts say this could potentially lead to an indictment of the PSOE as a legal entity.

This latest legal threat, centered on the alleged rigging of public procurement contracts and suspected large-scale kickbacks, could mark the final blow for a government already battered by scandals, public distrust, and a citizenry that has lost its fear of taking to the streets. 

Sánchez’s administration now faces its deepest threat yet: the complete delegitimization of his party in the eyes of the public, and the real possibility of criminal consequences for the organization.

A case that can no longer be covered up

The judicial investigation is moving at full speed. According to sources from the Supreme Court and the Anti-Corruption Prosecutor’s Office, the evidence gathered so far by the Civil Guard’s Central Operative Unit (UCO) points to the existence of a political-business network in which commissions from construction firms—channeled through intermediaries such as businessman Víctor de Aldama—were ultimately destined for the PSOE. Aldama stated this emphatically before the Supreme Court: José Luís Ábalos, a former Minister of Transport and longtime senior party figure, and Koldo García, a close aide to Prime Minister Sánchez, told him directly that part of the money was “for the party.”

The police report, almost 500 pages long, includes audio recordings, text messages, bank documents, and court testimonies that reinforce this thesis. In intercepted messages involving Koldo, the code word “ganadería” (“livestock”) was used to describe how political parties—especially the PSOE—were at the center of a corrupt system that handed out public contracts in exchange for political loyalty or illegal payments. The investigation also found that regions were assigned specific “quotas” of contracts or kickbacks, and revealed how PSOE leaders used their control of the Ministry of Public Works since 2018 to organize and manage this suspected illegal funding scheme.

The searches carried out by the Civil Guard at construction companies in Navarre, Toledo, Granada, and Valencia, as well as in the homes of the main suspects, may provide further evidence. Therefore, the upcoming testimonies of Ábalos, Koldo, and Santos Cerdán, the PSOE’s former Organisation Secretary and one of Sánchez’s top allies, could be pivotal. All eyes are on Koldo García, who may agree to cooperate with prosecutors—potentially shattering the fragile political balance keeping Sánchez’s government in power.

Ferraz under siege

The effects of these revelations are already being felt strongly on the streets. For several days now, thousands of people have gathered in front of the PSOE headquarters on Calle Ferraz in Madrid. What began as spontaneous protests have grown into massive rallies demanding Sánchez’s immediate resignation and the calling of early elections. VOX leader Santiago Abascal is calling for elections as soon as possible.

Around Ferraz, the atmosphere resembles a state of siege: flags, chants, and banners accuse the government of corruption, authoritarianism, and abuse of power. “This isn’t an isolated case; it’s the PSOE system,” repeated one protester this week, while others shouted, “Give back what you stole!”

Pedro Sánchez is expected to make a public appearance on Monday, likely addressing both the media and Parliament. Though his inner circle insists he has no intention of resigning and will “hold on until 2027,” the pressure is now unbearable. Rumors of a resignation are intensifying, fueled by growing dissent within his own party and the looming threat of a no-confidence motion from the opposition.

Nevertheless, parliamentary sources indicate that Sánchez is maneuvering to stay one step ahead by presenting a vote of confidence backed by his supporters. It’s a risky move, but one that could buy him time and shield his allies under the judicial immunity afforded by Spain’s parliamentary system.

An eventual indictment of the PSOE by the Supreme Court could not only bring down Sánchez, but also trigger internal party collapse and a dramatic loss of credibility in the eyes of the electorate. The consequences would be historic. Less than a year ago, it was unthinkable to imagine the PSOE facing the possibility of political extinction.

The Koldo case is no longer just another scandal: it is the symptom of systemic rot that threatens to drag down the PSOE—and with it, the political stability of the entire country. Time is running out, the streets are roaring, and justice is advancing. Sánchez’s room for manoeuvre is rapidly vanishing.

Pictured: Pedro Sánchez, MP, Prime Minister of Spain