MATTESA CASE: ANTECEDENTS, EVENTS, CONSEQUENCES - HISTORY - 2025

The Matesa case was an economic and political scandal that broke out during the last years of the Franco dictatorship in Spain. This last stage of the Franco regime was characterized by so-called developmentalism, a new strategy undertaken by the so-called technocrats to adapt the economic model to that of the rest of Europe.

During the first decades of Franco's dictatorship, the economic system that had been implemented had been a true autarky. This was the model defended by the so-called "blues", the members of the government from the Falange, with a fascist ideology.

Franco (right) together with the then prince Juan Carlos shortly before the scandal broke out - Source: http://proxy.handle.net/10648/ab6cdb40-d0b4-102d-bcf8-003048976d84 under the Creative Commons Public Domain Dedication license CC0 1.0 Universal

The economic opening of the 60s allowed the improvement of the population's living conditions. Exporting companies appeared with it, among which was Matesa, who claimed to be selling large quantities of a very novel loom. The scandal erupted when it was learned that these data were not true and that sales were much lower.

Matesa had received public credits of a very considerable amount. In addition, the "blues" of the regime took the opportunity to link it with the technocrats and Opus Dei with the intention of weakening its political power. Finally, Franco decided to renew his government almost completely, although the technocrats managed to maintain their primacy.

Background

At the end of the civil war in Spain, General Franco established a dictatorial one-party government in which fascism had a great influence. This resulted in the implementation of an economic system based on autarky.

However, the defeat of their ideological allies (Italy and Germany) in World War II caused some small changes. Starting in the 1950s, when the world was in the midst of the Cold War, the United States began a rapprochement with the dictatorship.

Over time, in exchange for the opening of US military bases, the international isolation of Franco's Spain began to relax. Although the economy was still very precarious, the regime began a policy of opening up to the markets to try to improve the situation.

The results of this new economic policy began to be seen in the 1960s. The improvement was remarkable, although it reached the population very unevenly.

Technocrats vs. Blues

In the last years of the 1950s, the Spanish economic situation had hit rock bottom. The Franco regime then launched a series of reforms to try to alleviate the difficult situation. For this, Franco incorporated into his government several ministers from Opus Dei: the so-called technocrats.

Although the reforms were only focused on the economy, without affecting political freedoms, their effects allowed the emergence of a middle class in the country.

However, the arrival to the government of these technocrats encountered the opposition of the power group that emerged from the Falange, the so-called "blues." The Matesa Case would end up being used by them to try to undermine the growing influence of the technocrats.

Events

Many experts consider that the Matesa Case marked the beginning of the end of the Franco regime. Just before the scandal was made public, Franco had named Juan Carlos de Borbón as his heir, something that some members of his government did not like either.

Matesa

Matesa, acronym for Maquinaria Textil del Norte SA, had been created in 1956 by Juan Vilá Reyes. It soon began to be set as an example by the Franco regime of an internationally successful Spanish company.

Its flagship product was a loom that did not need a shuttle. The machine consisted of parts exported from the United States and the final assembly was carried out in Spain. According to the propaganda, Matesa sold thousands of these looms to the rest of the world.

At that time, the State supported companies through loans granted by the Publicly-owned Banco de Crédito Industrial. In this case, Matesa had received about 10,000 million pesetas (about 60 million euros) that it had to use to promote sales abroad.

The size of the loan obtained was such that it equaled the entire budget of the Ministry of Agriculture for one year.

Even before the scandal was reported, there were serious suspicions that the looms sold were far fewer than those advertised by the company. Despite this, the BCI continued to grant him loans.

Sales reality

The reality of sales was much less positive, especially abroad. However, the company started a strategy to continue benefiting from the credits granted by the State.

Thus, it stored hundreds of machines that were theoretically sold in its warehouses and, in addition, it counted as sales those units acquired by its subsidiaries abroad, even if the public did not buy them. In other words, it was a kind of auto-sale.

The first suspicions appeared in 1967. In the summer of that year, Matesa was involved in an investigation for evasion of foreign currency in an amount that exceeded 100 million pesetas. This was not enough to stop him from receiving loans from the public credit bank.

In 1969, as noted, the amount received by Matesa was about 10,000 million pesetas. In addition, it had been favored by favorable legislation in terms of taxes, since it could be deducted up to 11%. Despite these data, only the political struggle within the regime allowed the scandal to reach the public.

Those who started the battle were the "blues", who considered that it was the perfect opportunity to weaken their rivals, the technocrats of Opus Dei. To begin with, although he always denied it, they accused Vilá Reyes of belonging to this religious organization.

The scandal

It was the Argentine Minister of Industry who uncovered the falsity of the loom's sales. This politician was visiting Spain when he was asked about the famous loom. The minister had no idea what they were asking him.

As it would become known later, Matesa had only been able to sell 120 machines in that country, far from the 1500 that it had declared.

On July 23, 1969, the case went to court. The author of the complaint was Víctor Carlos Sanmartín, who at the time was the General Directorate of Customs. The court, after hearing him, ordered the arrest of Juan Vilá Reyes and other executives.

Political reactions

Apart from the economic and symbolic importance of the scandal, what was truly important was lived in the field of politics.

The "blues" soon began a campaign to blame the technocrats for what happened. At the forefront of the attacks were Manuel Fraga, Minister of Information, and José Solís.

One of the first publications against the technocrats appeared in the newspaper SP, very close to the Falange. On August 9, he stated in his editorial that “the public control of the private company Matesa is on the way to becoming the most notorious 'affair' of the last 30 years, since its economic and financial incidents (…) border the borders of scandal, the lightness and the fiasco ».

For the first time, some media dared to demand the resignation of the ministers who controlled the country's economy.

To understand the importance of this publication, one must take into account the regime's tight control over the media. The freedom of information with which the scandal was treated could only mean that sectors of the government were behind what was published.

El Nuevo Diario echoed this internal struggle: "The man in the street, a mute and astonished spectator (…) guesses that, deep down, a very tough and non-academic struggle for power is taking place."

State losses

After the Matesa scandal, the Banco de Crédito Industrial was dismantled and, therefore, public loans were stopped for a long period.

According to the information that appeared years later, already in democracy, the State was only able to recover about 6,900 million pesetas of the more than 11,000 million defrauded between credits and unpaid interests.

Furthermore, the amount recovered came from the insurance companies: neither Matesa nor its founder contributed anything.

Consequences

According to the official documents of the time, Franco's first thought to solve the scandal was for Vilá Reyes to leave his position in the company and, finally, to have the state seize it. However, the public complaint prevented that plan from being carried out.

Vilá Reyes and other executives had to face a trial and were sentenced to pay a fine of 21 million pesetas for the 1967 foreign exchange evasion and another 1658 million for credit fraud.

Likewise, the founder of the company was sentenced to three years in prison. However, Franco granted him a pardon in 1971 whereby the fine was waived and his prison sentence was reduced to just a quarter. This pardon came even before the sentence had been confirmed, something that was illegal.

Later, in 1975, Vilá Reyes was convicted again, this time for fraud, documentary falsification and active bribery. The sentence was very harsh: 223 years in prison and a fine of almost 1,000 million pesetas.

However, on this occasion he did not have to serve his sentence either, as he received a pardon from the newly crowned Juan Carlos I.

Investigation Commission

The "blues", led by Manuel Fraga, took the opportunity to try to weaken their political rivals.

Despite his efforts, all he was able to achieve was for the BCI leaders to be removed from office and for a commission of inquiry to be opened.

Carrero Blanco reaction

By the time the scandal broke, Franco's health was beginning to deteriorate. One of the possible successors was Carrero Blanco, who immediately realized the possible consequences of the Matesa case.

For the admiral, this issue "was one of the four political problems that if not solved as a whole with due urgency could seriously erode our regime."

The intervention of Carrero Blanco was essential so that the ministers of Opus Dei, the technocrats, did not suffer the consequences of the scandal. In fact, he managed to strengthen his position against the "blues".

The regime's solution was to change almost all the ministers of the moment. To replace them, Franco elected a large majority of technocrats. Important figures among the "blues", such as Fraga and Solís, lost their positions as ministers.

Impact on ministers

The government's economic ministers were not charged with corruption or negligence. The three, Mariano Navarro, Juan José Espinosa and Faustino García, benefited from the pardon granted by Franco and only had to attend the trial as witnesses.

During that trial, these senior officials confirmed that they had traveled abroad invited by the company to visit its factories. Although it could not be proven, experts say that their statements seemed to confirm that they were aware, or at least suspected, of the irregularities that were being committed in Matesa.

References

1. Noceda, Miguel Ángel. The scandal that eroded the Franco regime. Obtained from elpais.com
2. Jiménez, Fernando. The Matesa case: a political scandal in an authoritarian regime. Recovered from dialnet.unirioja.es
3. Bustamante, José Manuel. What was the 'Matesa case'? Obtained from elmundo.es
4. Pace, Eric. High Court Gets Scandal in Spain. Retrieved from nytimes.com
5. The confidential. 50 years of Matesa, the first great corruption scandal of the Franco regime. Obtained from elconfidencial.com
6. Mgar. Francoism: Scandals and cases of corruption. Retrieved from mgar.net