Spanish government seeks distance from Rato affair

MADRID (Reuters) - Spain's government on Friday sought to distance itself from a money-laundering investigation into a former heavyweight of the ruling People's Party (PP), Rodrigo Rato, in an election year in which corruption has become a major theme. Customs agents searched the home and office of the former economy minister on Thursday. Rato is also a former head of the International Monetary Fund and was chairman of Bankia when the bank was bailed out by the state in 2012. Judicial officials have yet to decide whether allegations of money-laundering, fraud and asset-stripping against him have any basis. Rato's lawyers Oliva-Ayala did not reply to requests for comment. Reuters photographers saw agents still searching his workplace on Friday morning. Asked whether the PP was worried about a backlash from the investigation into Rato's personal wealth, ministers at the weekly government news conference said it had nothing to do with his former public roles. "The tax office does its work independently of time and place, of whether or not there are elections and regardless of whether it affects politicians from any party," Deputy Prime Minister Soraya Saenz de Santamaria said. Treasury Minister Cristobal Montoro, meanwhile, said tax authorities had been investigating Rato's affairs for some time. Magistrates are investigating the alleged misuse of company credit cards for personal expenses during Rato's tenure as chairman of Bankia. An investigation is also under way into whether Bankia's 2011 stock market flotation was flawed. Rato denies wrongdoing in both cases. The latest probe comes at a sensitive time for the PP, with the two mainstream parties expected to suffer heavy losses in regional and general elections this year as Spaniards grow weary of economic hardship and political corruption. Images of Rato being escorted from his residence on Thursday evening by customs agents were splashed on newspaper front pages. Rato was later released. A judicial source said he was cooperating with authorities. Rato was quoted in El Pais newspaper on Friday as saying he did not have any companies in any tax havens or any country outside the European Union. (Reporting by Emma Pinedo and Blanca Rodriguez; Writing by Sarah White; Editing by Sonya Dowsett and Andrew Roche)