CORPORATE SCANDAL 

The vice-president of the Spanish employers (the association which represents the employers) pays under the counter to their employees in their restoration companies in top institutions of the State, the Congress, Ministries, Public Radio and Television, among others.

Fraud of the Vice-President of the Spanish Employers and Industries Association

Link: http://cadenaser.com/ser/2013/02/11/espana/1360543813_850215.html

Overview: Spain counts with 25% of its economy in black. The Spanish corporate management represented by the employers association (CEOE) is negotiating with the Government employment policies and pensions. The least that can be requested to the representatives of these associations is to avoid fiscal fraud.

This reflection was the origin of the investigation carried out about the vice-president of the Spanish employers association, Arturo Fernández. His companies participate in bids in important State institutions (Congress, Senate, Ministries….) and he has paid part of the salary of his 3,000 employees under the counter during years. After the scandal was known, the Prosecutors Office started an investigation. The Treasury of the State has condemned Arturo Fernandez to pay a fine of more than 600,000 euros for fiscal fraud. And he has lost the public contract of Congress and other institutions.

The president of the Spanish employers, Joan Rossel, has not asked Arturo Fernández to resign, in spite of the proved fiscal fraud and the fact that Mr Fernandez obliged his workers to accept to collect part of their salaries under the counter and he did not declare their complete salaries to the State. This situation shows the lack of reaction and political condemnation to well-known cases of corruption.

The information included several workers´ declarations acknowledging the facts and a large leak of six years of accountability from his companies showing a double accountancy at least the last 6 fiscal years. The managers of his companies recorded this double accountancy and handed the envelopes to the workers.

The refusal to resign by the current chairman of the Madrid Business Confederation, Arturo Fernández, continues to provide fodder for editorials. In October 2014, the El País newspaper backed the request that he resign immediately, as his conduct and concurrent involvement in the Bankia case damage the organisation's credibility. "He should have left the organisation when it was discovered that he paid a portion of employee payroll with undeclared money. Outrageously inappropriate conduct from a representative of business," stressed the newspaper.

Exclusive of Cadena SER  

The `number two´ of the CEOE, Arturo Fernandez, pays under the counter a part of the salary to his employees.

Employees and ex-employees of the Group Cantoblanco confirmed to Cadena SER that giving envelopes with money B is an extended practice in the immense Madrilenian catering company

By Pilar Velasco 02-11-2013 – 08:00 cet

The reports of ex-employees and active employees refer to complements to their salary which were paid under the counter. They are specifically about the complements for responsibility and overtime. Group Cantoblanco, managed by the vice-president of CEOE, Arturo Fernandez, is in charge of the catering service at the Assembly of Madrid, at some hospitals in Madrid, at Ministries and at the Congress of Representatives. All the videos are about the claim that Arturo Fernandez pays part of the salary of his employees under the counter

The vice-president of the CEOE and president of the Association of Spanish Employers, Arturo Fernández, has paid under the counter part of the salary of his employees for years. Present employees and ex-employees have revealed to Cadena SER a systematic practice of payment which in occasions has accounted for half of the salary. They had not dared to reveal this before because they were afraid of losing their jobs or they had met trade unionists who winked at these practices.

Some of the employees and ex-employees of Arturo Fernández who have decided to talk to Cadena SER did not want to give their names for fear of labor reprisals. Others wanted to face the problem because they want to contribute to put an end to this method of payment which may be considered a fraud to the Social Security, a fraud to the Public Finances and a likely crime against workers. Overall this will be detrimental, in the future, to any subsidy for unemployment or a pension for retirement.

The employees coincide in the description of the method of payments under the counter and they provide similar documentary proofs. Waiters, cooks and clerks who have been interviewed say that they collect or have collected part of the salary in envelopes or overdue payment. They have received payments in B for two concepts: one corresponding to overtime and the other for complements for responsibility. Some of the hours collected as overtime account for a third of the salary or more, under the counter, in a systematic and monthly method in the companies belonging to the businessman ranked number one in Madrid.

The envelopes kept by the employees are all the same, regardless the company: white envelopes with no letterhead, with a sticker attached containing the surname of the worker next to the amount he/she has earned that month. These figures – for complements or for overtime- go from 100 to 700 euros, at least in the cases confirmed by Cadena SER.

Distribution of money B (under the counter)

The procedure for the distribution of the money was carried out following an organized method. The managers or chiefs of zone take the envelopes to the restaurants and cafés and proceed to distribute them; or they leave the envelopes to the clerk in charge of the place so that this person distributes the envelopes. Inside the envelopes there is a list of the names of the employees and the money in cash. In other cases, two different envelopes are distributed containing the list and the money B respectively, according to reports given by witnesses. Even more, the managers themselves keep a record in detail of the payments under the counter. They do this in Excel spreadsheets of monthly invoicing, where they record the number of hours next to the amount which the worker will not quote.

The workers assure that the company obliges them to collect their salary like this. In fact, when in some occasion the employees have asked to have their payments regularized or to be included in the payroll, the company has refused to do so. The employees declare that Arturo´s policy is: `under the counter or nothing´.

Employees´ declaration 

Workers or ex-workers of the Group Arturo Cantoblanco, with four to ten years of seniority, who do not know each other, and working in different cafeterias and restaurants, describe the modus operandi in identical terms.

The barman of one of the cafeterias subrogated by other company, who prefers not to reveal his identity, has been working for years in the catering sector and is afraid of the fact that the claim may damage him. In spite of this, he decided to speak up: `At the beginning I did not have any responsibility, then I was promoted, and started to be in charge of other employees. The complement I received for being in charge was money under the counter, money B´. His salaries, in fact, neither record that complement nor the quotation for overtime or complementary days.

`We have been subrogated by other company and we have lost that money. The overtime comes in a legal plan, they are included in the salary. The new company was surprised that the previous company used to use those practices, which they considered archaic, it is no longer done. This company did not do that´. This clerk in charge has even collected half of his salary under the counter. `I prefer this`, he says now. He did not have the option before. `The case was discussed in the previous company. At least the employees wanted to have part of the money regularized, but there was no way to do it, the company refused to do so´.

Who told these employees that they would collect their salary under the counter? Cesar Augusto Rocha, who had been with Arturo for ten years, declares that the issue of the envelopes was something assumed and that was not discussed. `It is something that is settled, it is all included in the package. If you work overtime here, this is the way, Arturo will pay you under the counter and when the month is due and that is all. They will not even tell you, you will be informed by one of the colleagues´.

Everybody had a clear idea of the system of payment. An ex-employee who worked for seven years, explains how the collecting conditions were established from the beginning. `All the intermediate positions – the chef, the manager himself, the manager of managers – have a sort of extra salary for assuming that responsibility. So they offer it to you: `You will earn one thousand euros but you will receive an envelope with 500´. So you ask the manager if those 500 could be included in the payroll. But he says that is impossible because it implies a lot of expenses, to pay more to the social security and that it is good enough to be paid at the end of the month. That is what they want you to understand´, he explains.

The company not even hides this practice or avoids documentary proofs. `It looks as if they felt they were unpunished before any type of law´. `And the distribution of the envelopes is concealed?´ `No, it is not. It is done openly. When it is the fifth day of the month and the envelopes have not arrived the people start to get nervous. They ask: `What´s up? Are the envelopes coming?´ `And when the manager appears everybody smiles because they know the distribution of the money is starting´.

Patricio Valle received a pension in advance after a labor accident in the kitchen of one of the places. He had dedicated all his life to the catering business and he also collected his salary under the counter. He dares to tell his story: `That was the system. In cash and in an envelope. In my case in the envelope was written: `Patricio Valle Pereda´, and below the amount of money: 100, 80, 90 euros… And that was all.´ Patricio does not worry to show that he is telling the truth when he is asked if he had Arturo Fernandez in front of him saying that he is lying. Patricio makes silence for a moment and then he says: `It is high time in this country to say: You paid my salary under the counter. I was wrong to accept it; the trade unions were wrong for not claiming; but you paid under the counter. Misery? Yes… But you paid under the counter and you are the chief of the Madrilenian businessmen´.

Legal consequences of paying under the counter

Judicial sources and labor inspectors interviewed by this radio station assure that the president of the Group Arturo Cantoblanco, Arturo Fernandez, would be avoiding quoting different retributions and overtime to his employees. According to the amount, it may imply, from the beginning of this year, a crime for a possible fraud to the Social Security and against the Public Finance Department. Besides, for not giving option to his employees of quoting that part of the salary, he may incur also in another possible crime against the rights of the workers.