Democracy is under threat in Spain
The Montoro affair has exposed a systemic corruption within Spain’s tax agency, where it is weaponized for political and private gain by successive governments, thereby threatening the very foundations of the nation’s democracy, says Robert Amsterdam
The Montoro affair reveals a systemic corruption that threatens the very foundations of Spanish democracy.
Spain’s reputation for institutional probity has taken another battering. Scarcely a week passes without fresh revelations of ministerial corruption, particularly within the finance ministry. The latest scandal – the so-called “Montoro case” – represents perhaps the gravest example of political weaponisation of a tax administration in any modern democracy.
Cristóbal Montoro, who served as Finance Minister from 2011 to 2018, now stands accused in court of orchestrating an elaborate scheme within Spain’s tax agency. The allegations are damning: that he created an internal structure designed to provide preferential treatment to clients of his own law firm, while also using tax data to exploit and extort political rivals. Through this apparatus, confidential fiscal data was allegedly leaked, selective pressure applied, and politically motivated sanctions imposed with disturbing regularity. Montoro resigned in July and issued a statement saying “there is no proof of any of the accusations”
Such behaviour would be scandalous in any democratic state. Yet what makes this affair particularly troubling is the response—or rather, the lack thereof—from Spain’s current government. Despite Pedro Sánchez’s promises of institutional transparency, his administration has not merely failed to clean house; it has actively perpetuated the very practices it once condemned.
Under current Finance Minister María Jesús Montero, the same patterns of illegitimate data use, selective pressures and convenient leaks have continued unabated. The only difference is the veneer of righteousness that now accompanies these activities – a false discourse that portrays the Sánchez government as morally superior to its predecessors.
The evidence suggests otherwise. Through months of detailed research involving Spanish taxpayers, tax professionals and British expatriates living in Spain, a disturbing picture emerges of systematic violations of fundamental legal principles. Tax confidentiality and equality before the law – cornerstones of any functioning democracy – have been repeatedly trampled underfoot.
The privatisation of fiscal power
The Montoro case exposed what can only be described as the privatisation of fiscal power. Business interests appear to have directly funded the drafting of bespoke legislation through law firms closely connected to the former minister. This represents a form of legislative capture that strips parliamentary sovereignty of all meaning and normalises the sort of corrupt practices one might expect from a banana republic, not a member of the European Union.
Far from dismantling this machinery of corruption, the Sánchez government has simply assumed control, refined the mechanisms, and put them to its own use. The recent accusations against José Antonio Marco, president of the Central Economic-Administrative Court, are particularly egregious. He allegedly accepted payments from companies in exchange for annulling tax sanctions – a practice that strikes at the heart of fiscal justice.
These are not isolated incidents but part of a broader pattern of institutional decay. What we are witnessing is the transformation of Spain’s tax administration from a neutral instrument of state into a weapon of political control and economic coercion. This represents a crisis not merely of governance but of democratic legitimacy itself.
We speak from experience. Beginning late last year, we launched a multinational legal initiative to defend a group of foreign resident victims. We published an extensive white paper titled “Hacienda vs. The People,” and we have since heard from hundreds of victims whose horror stories of injustice abound.
The Spanish justice system must now step forward where political leadership has failed. Every case must be pursued to its conclusion, regardless of the political ramifications. In a functioning democracy, citizens come before politicians—yet Spanish taxpayers have endured systematic mistreatment for more than two decades.
Spain now faces a stark choice. Either it implements comprehensive structural reform to restore its tax administration to its proper constitutional role, or it accepts the consolidation of a punitive model of governance where the Treasury operates as an instrument of political vendetta. The consequences of the latter path would extend far beyond Spain’s borders, calling into question the health of democratic institutions across Europe.
The time for half-measures and political platitudes has passed. Spain’s democratic credentials hang in the balance.
Robert Amsterdam is the founding partner of Amsterdam & Partners