The Spanish Socialist Workers’ Party (PSOE), currently leading the government of Prime Minister Pedro Sánchez, is facing its most serious judicial threat in decades. According to judicial and police sources, Spain’s Supreme Court now has sufficient “indications” to indict the party itself on charges of illegal financing.
The move would mark an unprecedented escalation in the so-called ‘Koldo case’, a corruption scandal that has already implicated several senior Socialist figures. The investigation is being led by Supreme Court justice Leopoldo Puente, who handles a sealed case concerning an alleged criminal organization tied to two former Organization Secretaries of the PSOE: José Luis Ábalos and Santos Cerdán.
The scandal led to the preventive detention of Santos Cerdán, one of Sánchez’s closest allies until just months ago. Judicial documents describe a “multi-million-euro loot” managed by companies and intermediaries.
Investigators point to two key sources of evidence: documentation seized in police raids on Spanish construction companies earlier this year, and irregular expenses and donations linked to Ábalos and Cerdán during their time running the party’s powerful organizational machinery.
According to the Guardia Civil’s Central Operative Unit (UCO), donations allegedly linked to kickbacks from public contracts may have been funneled into the PSOE’s accounts. Since 2014, the Supreme Court has demanded detailed financial records from the party, including membership fees, voluntary contributions, and payments.
A broader corruption network
Prosecutors argue that the alleged scheme was not limited to individual enrichment. Businessmen linked to the case claim that construction companies were pressured to pay commissions of up to 20% in exchange for favorable treatment in public works contracts.
For now, the Socialist leadership insists that any wrongdoing was carried out “behind the party’s back” by rogue individuals, seeking to draw a line between government and those under investigation. When Ábalos was forced to resign in 2021, officials in Madrid portrayed it as an isolated case of personal misconduct.
But the possibility of the party being indicted as a legal entity dramatically raises the stakes. Unlike the prosecution of individual leaders, such a move could attribute criminal responsibility directly to the PSOE.
Opposition parties on the right have already demanded explanations from Prime Minister Sánchez and accuse him of presiding over “the most corrupt party in Europe.” Meanwhile, Socialist spokespeople argue that the investigation is still ongoing and warn against “political exploitation” of a judicial process.
In the coming weeks, the judge is expected to decide whether to summon the PSOE as a defendant. If that happens, it would be the first time in Spain’s democratic history that the governing party faces direct criminal liability for illegal financing.
The case comes at a delicate moment for Spain, as Sánchez struggles to maintain his parliamentary majority with the support of small separatist and regional parties. An indictment would not automatically bring down the government, but it would put unprecedented pressure on a party weakened by internal scandals and rising opposition.
