MADRID -- For 20 years, Luis Bárcenas toiled in obscurity for Spain's governing Popular Party, working as a bookkeeper and treasurer. These days when he walks the streets of Madrid in his signature Chesterfield coat, strangers lash out at him with just one word: "envelope!"
While Spaniards suffer with the sacrifices of government-imposed austerity, Spain's top politicians, including Prime Minister Mariano Rajoy, have been accused in a widening scandal of pocketing envelopes of cash sometimes amounting to nearly $35,000 a year for nearly two decades. Mr. Bárcenas is suspected of distributing the illicit payments in an elaborate scheme to finance the party and enrich its leadership.
Having started as a low-level case, the scandal has now reached the very top of the political pyramid, with fresh disclosures emerging almost daily, directly threatening Mr. Rajoy's government and rattling financial markets. It has fueled public anger among Spaniards -- like their southern European counterparts in Greece and Italy -- who have seen traditions of institutionalized graft exposed by the downturn in Europe's economy.
The scandal has also shined an uncomfortable light on how the political parties operate and their clubby relations with a corporate elite in an alliance that stifles competition throughout the economy -- to the detriment of the middle and lower classes.
"In Spain, there is a perverse system in the way that political parties are financed," said Jorge Trías Sagnier, a former conservative lawmaker. "It was public knowledge that there were 'envelope salaries' for the parties."
In an effort to quell the clamor, Mr. Rajoy publicly recently released his tax returns -- a first for a prime minister here -- and called for a vigorous internal investigation of the party's finances. But critics charge that Mr. Rajoy showed no interest four years ago in pursuing accusations that party members had amassed wealth beyond official salaries, benefiting from a decade-long property boom and the largess of construction companies that provided cash, luxury Patek Philippe watches, Caribbean vacations and birthday parties in return for no-bid contracts and development rights.
According to a person familiar with the Swiss banks who asked not to be named, the investigation quietly lapsed after the Spanish authorities failed to clarify a request made to their Swiss counterparts to comb bank accounts in search of money held by Mr. Bárcenas.
The request was reactivated only in 2011 by Pablo Ruz, a judge from Spain's national court, finally revealing last month that Mr. Bárcenas, the former treasurer, had stashed away $29 million in Swiss bank accounts in the name of shell companies.
Mr. Bárcenas resigned as party treasurer four years ago, when he was tied to what appeared to be a mundane graft case in which mayors and other regional politicians from Mr. Rajoy's party were accused of taking bribes from a conglomerate led by a communications entrepreneur and developer, Francisco Correa, in exchange for no-bid contracts. The current scandal grew out of that, one shocking disclosure after another.
They have included the publication by Spain's leading newspaper, El País, of handwritten ledgers that the paper said showed secret payments to Mr. Rajoy and other party members dating from 1990 to 2008, when Spain's construction boom ended.
Mr. Bárcenas has denied that the secret ledgers are his, but handwriting experts for Spanish newspapers have confirmed his script. At the time of his resignation, he is believed to have walked out of his party headquarters with nine boxes of documents. Though he remains loyal to his party, the trove has become a source of endless speculation, centered on the looming threat that if Mr. Bárcenas is made to take the fall in any partywide scandal, others may fall with him.
He "was the guy in charge of the money and most probably has an awful lot of secrets in his closet," said Kenneth A. Dubin, professor of political science at the Carlos III University in Madrid.
Since the ledgers were unearthed, Mr. Trías and others have come forward to denounce a shady system of political financing that allowed parties to deposit anonymous donations in banks at least until 2007, when the practice was banned and individual contributions were limited to 100,000 euros, or about $133,000.
"What I saw is that there were donations that did not get paid into any bank," Mr. Trías said in an interview in his Madrid law office. "That amounts to irregular accounts."
Mr. Trías denies receiving "even one cent" of illicit payouts, and said he had urged the party leadership to carry out an internal inquiry of its finances in 2009 but was ignored. Mr. Rajoy and other senior conservative politicians, he claimed, "don't want to know the reality of what is happening in their party."
He described Mr. Bárcenas as "a practical man who likes concrete things." Among those things was art, and his particular love of it has raised suspicions that he used purchases of Spanish artworks to launder illicit contributions. The bookkeeper's deal making first came under scrutiny in 2009 when Baltasar Gárzon, an investigative judge who had gained worldwide fame for his pursuit of human rights abuses, picked up the investigation of the conglomerate owned by Francisco Correa.
Within months, Mr. Gárzon used secret recordings made by a junior politician, who acted as whistle-blower, to accuse several regional politicians of accepting bribes from the business group led by Mr. Correa, who presided over a network of companies that organized concerts and political rallies for the Popular Party.
Behind the scenes, Mr. Correa and his associates were also pressuring politicians to lift environmental and other building restrictions on property projects in return for kickbacks, according to Mr. Gárzon. Part of the cash, according to the prosecution's filings, was then funneled into party electoral campaign funds, putting Mr. Bárcenas at the top of Mr. Gárzon's list of suspects. Some of the same private donors have surfaced again years later in Mr. Bárcenas's secret ledgers.
The case, however, proved to be Mr. Gárzon's own undoing, after he was accused of relying on illegal eavesdropping. Last year, the Supreme Court endorsed the unlawful wiretapping accusations and banned Mr. Gárzon from the judiciary for 11 years, effectively ending his career in Spain.
Since the disclosures about the $29 million in Swiss bank accounts, Miguel Bajo, a lawyer for Mr. Bárcenas, has offered a variety of explanations: canny business deals with others, profits from selling restored artworks, the sale of real estate. Most recently, Mr. Bárcenas spoke briefly to a Spanish magazine, Interviú, indicating that there were three other investors who also used the same Swiss bank accounts, fanning speculation that they are party members.
Mr. Bajo, whose office declined a request for an interview with Mr. Bárcenas, also has said that the money in the Swiss accounts dates back to 25 years earlier, before Mr. Bárcenas was active in the Popular Party.
That was around the time that Mr. Bárcenas briefly made a name for himself in a controversial ascent of Mount Everest. Mr. Bárcenas and his climbing partners boasted about opening a new Spanish route up the world's highest peak in 1987.
Spanish mountaineering experts, however, almost immediately scoffed at the claim and questioned the group's ethics, saying they had simply followed an existing Japanese route.world
This article originally appeared in The New York Times.