Those responsible for selling 1,806 social flats to a vulture fund during the mandate of Ana Botella sit in the dock

Eight years after the controversial sale of 1,806 social housing to the investment fund Blackstone for 128.5 million euros perpetrated during the mandate of Ana Botella at the head of the Madrid City Council, those directly responsible for that operation sit in the dock this Tuesday, in a trial that will last until the end of the month. In the criminal process driven by the municipal group of the PSOE in the City Council and the Association of Affected by the sale, Botella and the hard core of the municipal government that authorized the sale will not be tried. The only defendants are Fermín Oslé Uranga, the then CEO of the Municipal Housing and Land Company (EMVS), and Alfonso Benavides Grases, former proxy of Fidere Housing – real estate investment company of the Blackstone fund.

The criminal proceedings for this sale leads to the oral trial now, but Botella has been excluded from being judged, although probably parade as a witness at the hearing to be held on November 12. The process has encountered several stumbling blocks since its inception to the point that at first it was archived by the investigating magistrate, but the Provincial Court ordered in 2019, he did it for the second time, to conclude the investigation and move on to the next phase, which will sit on the bench to those allegedly responsible for the crimes that the magistrates appreciate in the operation: embezzlement of public funds, prevarication and fraud. Among the defendants is not and will not be the former mayor. Nor her closest team, although the Governing Board that she chaired gave the go-ahead to the sale in 2013.

Now, the process does not start with good news for those affected, who exercise in the trial as a private prosecution. The Prosecutor’s Office of Madrid issued this Friday his brief in which he requested the acquittal of the accused. The agency notes in its brief that “the procedure at all times conformed to the prescriptions established” in the law that “allowed the disposal by their owners – the City of Madrid – of public housing for lease and lease with option to buy for complete promotions and free price, with prior authorization from the competent Ministry of housing”.

Therefore, it understands, were followed “at all times the principles set out in Article 1 of the Public Sector Contracts Act”. The Prosecutor’s Office also points out that “the financial year de 2013 showed a positive result in all items, increasing equity and shareholders’ equity and reducing liabilities, in accordance with the provisions of the Feasibility Plan and complying with the obligations of budgetary stability and financial sustainability”.

The prosecution asks for jail

In counterpoint, the association of those affected requests for the defendants eight years in prison for fraud and embezzlement of public funds, as well as eight years of disqualification from holding public office. The company Fidere is listed as a subsidiary civil liability.

The president of the Association of Affected by the sale of EMVS housing, Atantxa Mejías, says that “hope is the last thing you lose” after learning of the brief of the Prosecutor. “I want to think that there is some justice in this country, although the prosecution is on the side of the accused and not the victims,” he says in statements to

From the PSOE, also involved in the case, the socialist spokeswoman in the municipal group, Mar Espinar, recalls that the Prosecutor’s Office also spoke along these lines in the instruction phase “and in the end the Provincial Court forced the court to reopen the case”. “As a result of this today there is indicated oral trial for four alleged crimes, we must wait,” is optimistic Espinar in conversation with this editorial.

“It is not that it was an immorality, is that it has been an illegality that made a PP government with Ana Botella at the head,” says the municipal spokeswoman. “You can not plunder public property, much less public property dedicated to social purpose and from the PSOE we fully trust that justice will do justice and not allow acts of political vandalism as the sale of public social housing to vulture funds is repeated again. That is why we have been eight years without moving a millimeter from our position,” defends Espinar.

Conviction and acquittal in the Court of Auditors

In addition to the criminal field, the case had an administrative aspect that investigated the Court of Auditors and that although it ended in a conviction against Botella and seven senior officials of his government, then ended in acquittal. Two councillors appointed by the PP freed the former mayor of Madrid from the million-dollar conviction for the sale of social flats to buitre in 2013. The Court of Auditors overturned the sentence that had ruled the same body in the first instance against the exregidora of the capital and part of his government. The court sentenced them to pay 25.7 million euros out of pocket for selling 1,860 public housing units to two companies of the Blackstone vulture fund at a below-market price, but then the Trial Chamber overturned that ruling following an appeal by the convicted.

The acquittal, by two votes to one, was signed by two councillors proposed by the PP: the former Minister of Justice in the first government of José María Aznar, Margarita Mariscal de Gante, and José Manuel Suárez Robledano. The vote against was by Felipe García, councillor proposed by the PSOE, who maintained the arguments put forward by the Court of Auditors during its first condemnatory sentence: that the sale operation was “harmful” to the municipal patrimony and that it did not comply with the principles of “publicity, concurrence, transparency and objectivity” in the procedure.

The first sentence of December 2018 concluded that the hard core of Botella’s government, eight of its members starting with the mayor, “incurred in serious negligence” because “they did not prevent the damage to the public patrimony” when selling 5,315 properties of municipal ownership (including 18 complete blocks of protected flats) to Blackstone for 128.5 million, when according to the calculations of the Court of Auditors the Executive of Botella could have entered more than 151 million.

However, the following resolution of the Court of Auditors considered that both parties (EMVS and the investment fund) reached a “market equilibrium point” and concluded that in 2012 the EMVS “faced a critical situation” and that they should not forget “what were the general market conditions”, after the “collapse” of the financial market that was also “reluctant” to refinance real estate loans.

The value of the homes sold by the Government of Ana Botella has increased by 227%, according to calculations made years later by the vulture fund that bought them. In addition, the rents charged to tenants that fund rose 49%. Blackstone (Fidere) paid 128.5 million euros for these social housing developments. According to calculations made by the investment fund itself years later, the current market value of these houses is above 660 million (662,098,184 euros).

The arrival of Jos Luis Martínez-Almeida to the Mayor of Madrid meant that Ana Botella was completely free of any criminal and accounting responsibility despite having organized from the City of Madrid the operation of sale of the 1,860 social housing to vulture funds in 2013. She was the mayor of the capital, the head of the City Council and the one who gave the final approval to the operation in the Governing Board. But her role in that controversial operation went unpunished by the current government that closed the way of the courts for the case of the Municipal Housing and Land Company.

Conversations between affected and vulture fund

The last few months before the trial that starts this Tuesday, those affected by the sale of homes and the investment fund have held talks to reach an amicable agreement that guarantees the homes to tenants. The pact has not been possible, Mejías explains to this newspaper. “Both parties are in different points of view and sensitivities,” he says.

From the PSOE have as an objective the reversal of the sale, although that is not what is wielded in the open criminal proceedings. Both Mar Espinar and Arantxa Mejías await the pronouncement of the current team of Government of the City of Madrid as the main affected in the disposal of public housing. “What is clear is that what was done is not legal or ethical, as we are seeing that all laws are being made in the direction that never again what was done, selling public housing, can be repeated,” regrets the president of the association of affected. What is determined in this trial, may condition future steps in the struggle of tenants and political forces.

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