The rise and fall of Spain's Machiavelli

Mario Conde used to be adored. Now the former banker is on trial

He was a brilliant and ruthless outsider, the darling of a generation of ambitious Spaniards. He seized control of the country's most blue-blooded bank and exerted his influence in every sphere of public life. In just six years he acquired all the perks and trappings of wealth, power and celebrity. Last week it ended. Mario Conde, the former chairman of Banco Espanol de Credito (Banesto), was brought low with charges of fraud and embezzlement on a mind-boggling scale. If found guilty, he faces 35 years' imprisonment.

Conde's dramatic fall follows the near-collapse of Banesto in late 1993 which precipitated Spain's most spectacular financial crisis. The huge rescue operation convulsed the entire Spanish banking system.

A report by the US investigators Kroll Associates in 1992 put his personal fortune at pounds 35m. It described him as a manipulator, a voracious womaniser, and a prominent Mason who dabbled in the occult. Suave and immaculately elegant, his supposed Machiavellianism inspired admiration and terror.

Conde's magnetic personality filled the Spanish stage during the country's brief speculative boom starting in 1985, and he won the respect of everyone who mattered, including King Juan Carlos. Hailed as the prototype of the new, classless entrepreneur in modern Spain, this wheeler-dealer business impresario became, in the blink of an eye, a top banker.

His doings filled the gossip magazines, providing far racier copy than the usual cast of starlets, entertainers and exiled royals. He was the idol of those whom Spaniards called "los beautiful people".

Conde was born in 1948 in the small Galician town of Ty, son of a customs official. A bright schoolboy, he studied law at the Basque Jesuit university of Deusto, graduated with distinction and became a brilliant lawyer. He fell in with Juan Abello, a well-born Basque in whose family pharmaceuticals business Conde took a large share and which he sold at enormous personal profit to the Italian chemical multinational Montedison in 1987. Abello's contacts secured him an entree to Banesto, and his formidable operating skills, ferocious will and nerves of steel did the rest.

Institutional Investor named him banker of the year in 1989, but recanted in 1990 with the observation: "Conde replaced a Byzantine bureaucracy with the cult of the personality. He will be lucky to save his reputation." Tipped as a future Conservative prime minister, he fostered such speculations by consistently rubbishing the gauche, unconvincing Conservative leader of the time, Jose Maria Aznar, now Prime Minister of Spain.

Ernesto Ekaizer, a journalist from El Pais who is something of a Conde- ologist, described what he believes really happened: "Once they arrived at the Banco Espanol de Credito, Mario Conde and his friends made a fortune the like of which no one had ever made in such a short period of time in any country. Within months, Conde and his friends consolidated the status that the old rich had taken several generations to achieve." Trappings of wealth included estates, mansions, planes, yachts and paintings.

Conde used his power at the bank to exert political influence. He launched a number of assaults on newspapers and television companies that gave him leverage over Felipe Gonzalez's Socialist government, and provided him with a shield behind which, the prosecution case against him alleges, he pillaged Banesto for the enrichment of himself and his friends.

Conde wrote in his book, The System, after the Bank of Spain sacked him in December 1993 for what it called "gross negligence", that he wanted to create an Italian-style industrial conglomerate to fill the void where a strong Spanish entrepreneurial bourgeoisie should have been. Less interested in banking than in buying and selling companies, he hit upon Banesto for its industrial holdings.

The austere Spanish bankocracy, a clutch of grand families - the Botins at Banco Santander, the Ybarras at Banco Bilbao Viscaya and the Garnicas at Banesto - soon repented their decision to absorb this parvenu and, in an unholy alliance with a Socialist government via the Bank of Spain, spat him out when they realised he threatened to bring them to ruin.

In his exculpatory account, Conde makes much of the supposed conspiracy against him, but sidesteps the mystery of how one of Spain's oldest and biggest banks was brought to its knees with a black hole of Ptas605bn (pounds 3bn).

In 1992, with Banesto already on the slide, he imposed a slew of cost- cutting measures. Meanwhile, he spent pounds 150,000 on importing oak and chestnut trees from Poland for his estate near Seville.

In another grand gesture, the day he faced the press after Banesto was taken over by the Bank of Spain in December 1993, he rented a hotel suite for pounds 500 to drink coffee and collect his thoughts for half an hour.

Conde's final throw in 1993 was to mobilise the blue-chip US investment bank JP Morgan, which helped Banesto to raise $700m (pounds 456m) from the international markets. This is what transformed a Spanish debacle into an international scandal.

The prosecution case, which has taken nearly two years to build, is that Conde created a web of intermediary companies that bought and sold assets within the Banesto group. He denies both overvaluing the bank's assets - thus creating the capital shortfall - and owning or running companies in which he is accused of being a main shareholder and which made huge profits at Banesto's expense.

The pieces started to fall into place this spring when Bank of Spain investigators found a network of businesses in Switzerland they said were run by Conde frontmen or "men of straw" whose purpose they allege was the extraction and laundering of Banesto funds to the tune of millions of pounds.

In The System, Conde quotes the Roman historian Tacitus as saying that for those who want to rule there is no middle point between the apex of power and the abyss. Few in Spain believe he can claw his way back.