Alberto Ruiz-Gallardón and his former cabinet are under the spotlight in Spain’s National Court. The controversial Inassa acquisition is at the heart of the first trial in the ‘caso Lezo’ corruption probe. Prosecutors allege millions in overpayment.
The National Court in Spain is examining the 2001 purchase of the Colombian water company Inassa, with former Madrid president Alberto Ruiz-Gallardón and his cabinet called to explain their roles in the first trial of the ‘caso Lezo’ investigation. Prosecutors say the public may have paid up to €29 million more than Inassa was worth, a figure that remains disputed—some sources put the overpayment at €19 million, others at €29 million. The exact financial impact is still being debated.
The case centers on Canal Isabel II, Madrid’s public water utility, which bought 75% of Inassa through a Panamanian shell company. Prosecutors argue this structure inflated the price and hid the true nature of the assets, including a Dominican software firm unrelated to the original deal. The acquisition, financed with over €50 million in debt, was approved by Gallardón’s cabinet based on Canal Isabel II’s reports. The Madrid Assembly did not object at the time. Prosecutors continue to focus on the use of offshore companies as a sign of possible wrongdoing.
The Lezo trial began on September 7, 2026, nearly a decade after the investigation was first opened, underscoring the complexity and length of the proceedings.
Gallardón, who was initially charged but later cleared, told the court he never doubted the deal’s legality. He said his government simply approved what Canal Isabel II’s board proposed, relying on technical reports and standard procedures. Gallardón claimed the cabinet did not know about the Panamanian company or the Dominican firm, and that he only learned of these details more than 15 years later when he was called as a suspect. He argued the acquisition did not harm Madrid’s finances, rejecting the prosecution’s claim of a multi-million euro loss. In his testimony, Gallardón described the operation as "prudente y legal," saying the decision was based on positive legal opinions and aimed at benefiting both Canal Isabel II and Madrid residents.
Other former cabinet members gave similar accounts. Luis Peral Guerra, a former regional minister, described the process as routine, with the council approving 96 items that day and trusting the public company’s due diligence. Manuel Cobo, Gallardón’s former deputy, said the Assembly of Madrid reviewed the deal and raised no objections, calling it a technical matter rather than a political one. Cobo also mentioned a recorded conversation in which Ignacio González, another former Madrid president, allegedly tried to damage Gallardón’s reputation for political reasons, suggesting the scandal was used in internal power struggles. In contrast, former Canal Isabel II board member Rafael Merino called the Inassa purchase "bastante oscura" (quite murky), supporting the prosecution’s view that the deal lacked transparency and had irregularities.
The Spanish Anticorruption Prosecutor’s Office continues to accuse Canal Isabel II board members who approved the Inassa deal of serious violations, with the case files highlighting the alleged use of offshore structures and significant overpayment as central issues. The prosecution’s position is supported by multiple independent reports, which point to unresolved questions about the real value of the assets and the transparency of the transaction.
El Plural
Prosecutors maintain that the use of offshore companies and the purchase of unrelated assets point to deliberate concealment and financial misconduct. Investigators say the final price—$73 million—was far above the company’s real value, benefiting the sellers and costing Madrid’s public funds. The trial also involves other former officials, including Pedro Calvo Poch and Juan Bravo, for whom prosecutors are seeking seven-year prison sentences.
Ignacio González, though not charged in this part of ‘caso Lezo’, faces separate trials for alleged contract rigging and kickbacks involving Canal Isabel II and other public works. The broader investigation has already exposed deep divisions within Madrid’s political class, as seen in earlier efforts by the Assembly to block scrutiny of public spending.
After years of investigation and nearly 25 years since the original deal, the trial’s outcome will test Spain’s anti-corruption system. The defense relies on claims of bureaucratic routine and technical reports, but the pattern of offshore deals and missing oversight is difficult to ignore. For a region still dealing with repeated scandals, the Inassa case shows how political accountability in Spain often comes late, if at all. The court’s verdict will reveal whether procedural ignorance can still protect those in power, or if that era is ending.
