Spanish PM Sanchez defends party financing in Senate grilling over graft scandals

Spanish Prime Minister Pedro Sanchez said on Thursday his Socialist Party's financing was completely above board as he faced a Senate commission of inquiry into a corruption scandal dogging his party and threatening his premiership.

Senators are probing allegations that high-ranking Socialist officials received kickbacks in exchange for awarding public works contracts, as well as separate investigations involving Sanchez's wife and brother.

The 266-member Senate is controlled by the main opposition People's Party (PP), which has repeatedly called for Sanchez's resignation and a snap election while accusing the leftist minority government of widespread corruption.

"The Socialist Party is a party with absolutely clean financing," Sanchez told the chamber at the start of a hearing expected to last around five hours amid a tense exchange over alleged cash payments in envelopes.

"The use of cash is perfectly legal and also common in the Socialist Party for the settlement of expenses ... always with receipts," Sanchez added.

SANCHEZ SAYS CASH PAYMENTS NEVER EXCEEDED 1,000 EUROS

Asked whether he had received any cash payments, Sanchez said he was convinced he had done so "on some occasions" against an invoice but they had never exceeded 1,000 euros ($1,166), the legal limit in Spain.

Sanchez is only the second sitting Spanish prime minister to be grilled by the Senate.

He described the inquiry as a "circus" as he traded barbs with a senator representing far-right party Vox, who accused the premier of disrespecting the upper chamber.

Sanchez also insisted his government was implementing a raft of anti-corruption measures announced in July.

"Zero corruption doesn't exist, but zero tolerance does," he said.

The Socialists' former number three, Santos Cerdan, remains in pre-trial detention, while his predecessor Jose Luis Abalos - who also served as Transport Minister between 2020 and 2021 - is implicated in an alleged plot to get kickbacks in purchases of face masks during the pandemic.

Both men were Sanchez's trusted advisers. Sanchez says he had no knowledge of wrongdoing by either while Cerdan and Abalos deny the charges.