Spain cracks down on corruption after Putin jibe

MADRID, Oct 23 (Reuters) Spain's Socialist government launched a crackdown on town hall corruption today after a string of construction scandals which even attracted a jibe from Russian President Vladimir Putin.

Rocketing land values and booming construction have underpinned Spain's fast economic growth over the past decade, but also illicitly lined pockets in town halls, according to almost daily accusations in the Spanish press.

Questioned about human rights by a Spanish official at a dinner with European leaders in Finland last week, Putin snapped back that Spain, with ''corruption'', and Italy, with ''mafias'', had nothing to teach Russia, newspaper El Pais said yesterday.

Today, the government said it would make it more difficult for town halls to rezone land to allow building work, seen as the main area where corruption is rife.

Lax controls have not only encouraged graft but also fuelled speculation which means that buying a home is increasingly difficult for ordinary working Spaniards, the government said.

''The government is firmly committed to fight against corruption, no matter who gets nabbed,'' said Alfonso Perales, a senior Socialist Party official.

''It's a strange fact that more houses are being built today than ever, but it's more difficult and expensive to buy a home than ever before,'' he told Cadena Ser radio.

The government has been worried about the political impact of corruption for some time and there was no suggestion the crackdown resulted from Putin's remark.

Both the Socialists and the main opposition, the conservative Popular Party, have been damaged by scandals as mayors and other officials all over the country have succumbed to temptation from property developers.

In the most famous case, more than 60 arrests have been made in Marbella, where one official was found with 360,000 euros in cash lying around her house and another ran up an 855,000 euro bill for wine and champagne.

Kickbacks have been siphoned out of a huge wave of money which has pushed house prices up 140 per cent in seven years even though 500,000 homes are being built every year in Spain.

While the Socialists are still ahead of the PP in opinion polls with national elections about 17 months away, the government faces growing discontent among people finding it increasingly difficult to buy a house.

According to private pollsters CIS, housing was identified as one of Spain's biggest problems by 27 per cent of people in July, up from 19 per cent when Prime Minister Jose Luis Rodriguez Zapatero won election in March 2004.

REUTERS MQA BD1802