INVESTIGACION

LINKACTION

As COCOO’s solicitor, my mission is to build a compelling case to trigger the Rule of Law Conditionality Mechanism (Regulation (EU, Euratom) 2020/2092) against Spain for systemic mismanagement of Recovery and Resilience Facility (RRF) funds, ensuring the protection of EU financial interests and upholding the rule of law. The documents provided offer substantial evidence of Spain’s breaches of EU law, particularly in transparency, procurement, and competition, which I will leverage to argue for immediate action by the European Commission, including suspension of RRF payments, clawback of misused funds, and establishment of independent oversight mechanisms.

Spain’s mismanagement of RRF funds, as detailed in COCOO’s complaint (Ref: 83559) and supported by the European Court of Auditors (ECA) Special Report 13/2024, presents a clear threat to the EU’s financial interests. The ECA report highlights significant opacity in reporting final recipients, with Spain failing to consistently define and disclose beneficiaries as required by Article 22(2)(d) of the RRF Regulation (EU) 2021/241. This lack of transparency creates risks of fraud, corruption, and favoritism, directly undermining the principles of sound financial management under Article 4(2)(b) of the Conditionality Regulation. Furthermore, the allocation of over €800 million in RRF funds to approximately 30 companies previously sanctioned by the Spanish National Commission on Markets and Competition (CNMC) for anti-competitive practices, such as bid-rigging and price collusion, violates Article 9 of the RRF Regulation, which prohibits funding to ineligible recipients, and breaches EU public procurement directives (Directive 2014/24/EU) and competition law under Articles 101-105 TFEU.

The evidence also points to Spain’s failure to meet 24% of its RRF milestones due to administrative inefficiencies and poor project planning, risking non-completion by the August 2026 deadline. This jeopardles potential financial losses for the EU, as noted in COCOO’s letters and the ECA report. Specific examples of misallocation, such as €80 million to TVE (a public broadcaster that should be funded nationally) and €15 million to the CEOE (with unclear investment purposes), raise questions about compliance with the RRF’s objectives to support SMEs and COVID-affected sectors. The allocation to large, politically connected entities over SMEs further distorts competition, contravening Article 101 TFEU and state aid rules under Articles 107-109 TFEU.

Spain’s internal control systems, mandated by Article 22(2)(a) and (b) of the RRF Regulation and Article 11 of the Financing Agreement, are inadequate. The ECA and COCOO’s findings indicate persistent failures to prevent, detect, and correct fraud, corruption, and conflicts of interest. The Commission’s response (Ares(2025)678876, dated 27 May 2025) claims to have examined Spain’s control systems and to conduct risk-based ex-post controls, but it provides no specific actions addressing the ECA’s findings or COCOO’s evidence of sanctioned companies receiving funds. This lack of substantive engagement suggests a failure to act under Article 325 TFEU, which obliges the Commission to protect the EU budget from fraud and irregularities.

The case of Hungary, as outlined in document 18-25.pdf, provides a precedent for triggering the Conditionality Mechanism. Hungary’s redefinition of public funds to shield them from scrutiny, coupled with systemic deficiencies in prosecution and judicial independence, led to the suspension of billions in EU funds. Spain’s issues, while distinct, share similarities: opaque fund allocation, inadequate oversight, and potential favoritism towards politically connected entities. The Hungarian case demonstrates that the Commission can act when rule of law breaches—such as lack of transparency or ineffective fraud prosecution—directly risk the EU budget, as per Article 4(1) of the Conditionality Regulation. Spain’s failure to comply with the “Do No Significant Harm” (DNSH) principle under Article 5 of the RRF Regulation, particularly in delayed decarbonization and agricultural greening projects, further parallels Hungary’s non-compliance with EU objectives, strengthening the case for intervention.

COCOO’s proposed remedies—suspending RRF payments, clawing back misused funds, and establishing an independent oversight body—are legally grounded. Article 19 of the RRF Regulation and Article 6(7) of the Conditionality Regulation empower the Commission to suspend payments and reduce support in cases of fraud, corruption, or serious breaches of obligations. The precedent of fund suspensions in Poland and Hungary (Annex 4, document 2EC rrf nextgen spain letter n2.pdf) supports this approach. Moreover, COCOO’s call for a transparency platform and a “Risk Traffic Light” system aligns with the Commission’s obligations under Article 22(2)(d) to ensure access to beneficiary data and enhance accountability.

The Commission’s dismissive response, stating it “cannot be of assistance in this particular case,” is inadequate. It fails to address COCOO’s detailed evidence or explain why the systemic issues raised do not warrant action under the Conditionality Regulation. This inaction risks violating Article 265 TFEU, which allows for legal action against the Commission for failure to act. The Hungarian case underscores that past breaches and ongoing risks justify proactive measures, even absent disbursed funds, as the Regulation’s predictive approach focuses on potential threats to the EU budget.

To win this case, I recommend COCOO escalate by filing a formal complaint with the Court of Justice of the European Union (CJEU) under Article 265 TFEU, alleging the Commission’s failure to act on clear evidence of rule of law breaches affecting EU financial interests. Simultaneously, COCOO should request specific documents under Regulation (EC) No 1049/2001, including the Commission’s audit reports and correspondence with Spain post-ECA Report 13/2024, to expose any gaps in oversight. Engaging affected SMEs and stakeholders through COCOO’s outreach initiative will bolster the case by demonstrating real-world harm from Spain’s practices, reinforcing the public interest argument.

In conclusion, Spain’s mismanagement of RRF funds—evidenced by opacity, anti-competitive allocations, and inadequate controls—constitutes a serious breach of rule of law principles under Regulation (EU, Euratom) 2020/2092. The Commission must trigger the Conditionality Mechanism, suspend payments, and implement COCOO’s proposed oversight measures to protect the EU budget and restore trust in Spain’s compliance with EU law.

THE 5 ATTACHMENTS

From the document “A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures”, I have extracted academic support for the core arguments of your case¹. This paper is relevant because it provides an economic and theoretical foundation for the claim that companies deliberately conceal merger activities to avoid regulatory scrutiny, a practice it terms “stealth consolidation”². It explains that while securities law mandates disclosures to protect investors, these same disclosures can alert antitrust authorities to potentially anti-competitive deals, creating a conflict of interest for managers³³³³. The paper finds that the value of such undisclosed mergers between 2002 and 2016 exceeded $2.3 trillion⁴. This research validates your “Stealth Consolidation” strategy by showing it is a recognized and significant economic phenomenon⁵. It also highlights the inherent tension between regulators like the SEC, which aims to protect investors, and antitrust bodies like the FTC and DOJ, which aim to protect consumers, a gap your organization can exploit⁶⁶⁶⁶⁶⁶⁶⁶⁶. The paper also outlines a specific methodology for identifying these hidden deals by comparing aggregate cash acquisition data from financial statements with transaction-level databases⁷⁷⁷⁷. Finally, it identifies high-risk sectors for this activity, including healthcare, trucking, and business services, which can help focus your investigation⁸⁸⁸⁸⁸⁸⁸⁸⁸.From

“TI: BORS”, a report by Transparency International, I have extracted key arguments and precedents that support your push for greater transparency⁹. This document is important because it defines what a Beneficial Owner (BO) is—the actual human who owns or controls a company, as distinct from the legal owner—and explains how opaque corporate structures are used to hide their identities¹⁰. It provides strong public interest justifications for Beneficial Ownership Registries (BORs), stating they increase competitiveness, help law enforcement, and allow civil society to hold governments accountable¹¹. Critically for your case against Spain, the report notes that the great majority of EU member states failed to meet the January 2020 deadline to establish public BORs as required by the 5th Anti-Money Laundering Directive (5AMLD), with only five having complied on time¹². This finding supports your argument that Spain’s failures are part of a wider, systemic lack of enforcement by EU institutions. The report also provides powerful case studies where beneficial ownership data was crucial in uncovering major international corruption and fraud, including the recovery of billions in assets in cases like the Panama Papers and the Luanda Leaks, which can be used as precedents in your arguments¹³¹³¹³¹³.

From the “Guía sobre el beneficiario final de las personas jurídicas”, a Spanish translation of the FATF Guidance, I have extracted the official international standards that Spain is expected to uphold regarding beneficial ownership transparency¹⁴. This document is crucial as it details the specific obligations under the global anti-money laundering and counter-terrorist financing (AML/CFT) framework¹⁵. The guidance mandates that countries adopt a “multi-pronged approach” to transparency, meaning that relying on a single source of information is insufficient; instead, a combination of a public registry (or an effective alternative), information held by companies themselves, and other supplementary sources is required¹⁶¹⁶¹⁶¹⁶. This provides a benchmark against which you can measure the inadequacy of Spain’s system. The guidance also defines what constitutes a “sufficient link” for a foreign legal entity to be subject to a country’s BO rules, such as having significant business activity or property investments, allowing you to widen your investigation to foreign companies receiving RRF funds¹⁷. Furthermore, it details requirements for verifying the accuracy of BO information, provides measures to mitigate the risks of nominee shareholders and directors being used to obscure true ownership, and requires countries to implement “effective, proportional, and dissuasive” sanctions for non-compliance¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸. You can use these specific FATF standards to argue that Spain has failed to meet its international obligations.From the document

“The COCOO CaseLink Doctrine: An Integrated Strategic Model”, I have extracted your internal playbook for evidence gathering and case development¹⁹. This document is directly applicable as it operationalizes your strategies by listing the specific intelligence platforms and search protocols you will use. To dig out evidence, you should utilize the tools it names, such as OpenCorporates for mapping global corporate structures ²⁰, Companies House for UK entities, including searching by SIC code to identify all competitors in a market segment ²¹, SEC EDGAR for financial disclosures of US-listed companies ²², Violation Tracker UK to find corporate penalties ²³, and the Competition Appeal Tribunal (CAT) database for legal precedents²⁴. For filings, the document specifies monitoring real-time regulatory announcements (RNS) on the London Stock Exchange, looking for headlines like “Mergers, Acquisitions and Disposals” and “Holding(s) in Company”²⁵. The model details strategic “plays” like identifying an “Enforcement Gap” by cross-referencing penalty data from Violation Tracker UK with a regulator’s own strategic plans ²⁶²⁶²⁶²⁶and detecting “Stealth Consolidation” by mapping common directors across multiple acquiring companies in the same sector²⁷²⁷²⁷²⁷. This document provides the step-by-step methodology to build your case.From

“Global Landscape of Legal Asset Purchasers”, I have extracted the information needed to assign or sell your case pre-litigation²⁸. This report is directly relevant as it provides a directory of firms that purchase legal claims and arbitration awards, distinguishing them from traditional litigation funders²⁹²⁹²⁹²⁹. For the purpose of selling the claim, you should contact the firms explicitly identified as engaging in the “outright purchase” of legal assets:Fortress Investment Group (contact: opportunities@fortress.com) ³⁰³⁰³⁰³⁰,Harbour Litigation Funding (contact: info@harbourlf.com) ³¹³¹³¹³¹,Certum Group (contact: info@certumgroup.com) ³²³²³²³², and Bench Walk Advisors (contact: info@benchwalk.com), which specializes in buying awards and insolvency claims³³³³³³³³. The report also notes that major funders like Burford Capital and Omni Bridgeway have the capacity to structure large-scale monetization deals that are functionally similar to a purchase³⁴³⁴³⁴³⁴. To approach these firms, you should frame the opportunity not as an abstract strategy but as an asset backed by the evidence you have gathered³⁵. The document further identifies firms that invest in pre-litigation phases by funding investigations or acquiring litigation-dependent assets, including Certum Group, Harbour Litigation Funding, and specialist originators like AlphaLit, which could be approached to fund the further development of the case

GEMINI INSIGHTS

COCOO alleges that Spain has engaged in systemic mismanagement of RRF funds, which poses a direct risk to the EU’s financial interests. The organization has called for the immediate suspension of RRF payments to Spain and the activation of the Rule of Law Conditionality Mechanism.

Lack of Transparency and Flawed Reporting

The European Court of Auditors (ECA) found significant opacity in Spain’s reporting on the final recipients of RRF funds. This lack of transparency, coupled with inconsistencies in defining beneficiaries, heightens the risk of corruption, mismanagement, and favoritism. Spain’s reports allegedly did not provide sufficient detail on final fund recipients, violating EU transparency rules.

Allocation of Funds to Sanctioned Companies

A primary allegation is the awarding of RRF funds to companies previously sanctioned by Spain’s National Commission on Markets and Competition (CNMC) for anti-competitive practices like cartel behavior and bid-rigging. Specific examples include:

Construction Sector: Dragados (ACS Group) and Sacyr received a combined €83.5 million despite prior fines for manipulating contracts.
Railway Sector: 12 companies fined for cartel activities in contracts with ADIF (Spain’s railway infrastructure manager) were recipients of EU funds.
Advertising Sector: Carat España and Media Sapiens received nearly €1.78 million for institutional campaigns despite being fined for cartel behavior in publicity contracts.

Breaches of Public Procurement and Competition Law

Spain is accused of violating public procurement and competition laws. The Royal Decree-Law 36/2020, intended to fast-track RRF implementation, introduced “flexibilities” that allegedly weakened controls and solvency checks. This has led to unfair tender processes, direct awarding of contracts without competitive bidding, and a distortion of fair competition, disproportionately favoring large corporations over SMEs

Systemic Failures and Inadequate Controls

The ECA reported that Spain failed to meet 24% of its planned RRF milestones on time due to “administrative inefficiency and poor project planning”. COCOO argues that Spain’s internal control systems are inadequate to prevent, detect, and correct fraud and corruption, as required by the RRF Regulation and the Financing Agreement with the EU. The organization asserts that a complete failure of the control system puts all expenditure at risk, justifying a 100% reduction of the financial contribution.

Legal Framework and Alleged Violations

COCOO’s claims are grounded in several EU and Spanish legal instruments:

RRF Regulation (EU) 2021/241: Spain is accused of violating multiple articles, including:
- Article 9: Prohibition of double funding and funding for ineligible recipients.
- Article 22: Obligation for Member States to ensure transparent and proper use of funds, prevent fraud, and maintain effective control systems. Payments are contingent on the satisfactory fulfillment of milestones.
- Article 34: Requirements for communication and visibility of EU funding.
Rule of Law Conditionality Regulation (EU, Euratom) 2020/2092: This regulation allows the EU to suspend budget payments to a member state for breaches of the rule of law that directly affect the Union’s financial interests. COCOO argues that Spain’s actions meet this threshold, citing the Hungary case as precedent.
Financing Agreement between the EU and Spain: Spain is allegedly in “serious breach” of its obligations under the agreement, particularly:
- Article 11: The obligation to protect the EU’s financial interests by preventing, detecting, and correcting fraud, corruption, and conflicts of interest.
- Article 12: The obligation to allow audits and checks by EU bodies like the Commission, OLAF, ECA, and EPPO.
Spanish Law:
- General Subsidies Law (Law 38/2003): Prohibits providing financial aid to entities involved in serious misconduct.
- Public Sector Contracts Act (Law 9/2017): Requires fair and competitive public procurement processes.

Communication with the European Commission

COCOO has engaged in formal correspondence with the European Commission, expressing profound disappointment with what it considers an inadequate response to its allegations.

EC’s Position: In a letter dated May 27, 2025, the Commission, represented by Florian Geyer, Head of Unit at DG JUSTICE, stated that it had “carefully examined” Spain’s plan, that implementation “continues to move forward positively,” and that it “cannot be of assistance to you in this particular case”. The EC referred COCOO to a dedicated complaint form for the Conditionality Regulation and noted that it follows up on ECA recommendations.
COCOO’s Rebuttal: COCOO rejected the EC’s response as insufficient, arguing that the Commission, as the “Guardian of the Treaties,” has an obligation to act. The organization contends that its detailed letters provide a substantial basis for the EC to trigger an assessment under the Rule of Law Conditionality Regulation without needing a separate form. COCOO has since submitted a formal set of questions as part of a “pre-action protocol for failure to act,” threatening legal proceedings before the Court of Justice of the European Union.

Liable Entities and Proposed Actions

COCOO has identified both public and private entities as potentially liable and has requested a series of actions.

Liable Spanish Ministries:

Ministry of Finance and Public Function.
Ministry of Economic Affairs and Digital Transformation.
Ministry of Industry, Trade, and Tourism.
Ministry of Transport, Mobility, and Urban Agenda.
Regional Governments (Autonomous Communities).

Companies That Allegedly Received Unlawful Funds:

Construction: Dragados S.A., Sacyr S.A., FCC Construcción S.A., Ferrovial Agroman S.A..
Rail: Alstom, Siemens Mobility, CAF.
Media/Advertising: Carat España S.A., Media Sapiens España S.L..

Requested Remedies and Actions:

Immediate suspension of all RRF payments to Spain.
A comprehensive, independent audit by EU institutions (ECA, OLAF, EPPO) into Spain’s RRF management.
The triggering of the Rule of Law Conditionality Mechanism against Spain.
Recovery and clawback of all misallocated funds from both the government and private recipients.
Initiation of infringement procedures against Spain for breach of EU law

COCOO has initiated a multi-pronged strategy involving formal complaints, direct engagement with the Spanish government, and a public campaign to rally affected businesses.

Formal Request to the European Commission: On February 4, 2025, COCOO wrote to the President of the European Commission, Ursula von der Leyen, to formally request the triggering of the Rule of Law Conditionality Mechanism (Regulation (EU, Euratom) 2020/2092) against Spain. A follow-up letter was sent on March 12, 2025, noting a lack of response and providing additional evidence.Notification to Spanish Ministries: COCOO formally notified Spain’s Ministry of Industry, Commerce, and Tourism of its findings on March 10, 2025, alleging breaches of EU and Spanish law and threatening further legal action if a substantive response was not received within 30 days.Compensation Campaign: Publicly, COCOO has launched a “Compensation Campaign” to unite Small and Medium-sized Enterprises (SMEs) and other businesses that have been excluded or disadvantaged by the alleged irregularities in the fund allocation process. The stated goal is to secure financial compensation for these businesses through a collective action.
Mediation-Focused Strategy: The organization’s ultimate goal is to force the Spanish authorities and corporate beneficiaries into a mediated settlement. Their strategy involves using “unanswerable questions” based on their investigations to expose legal weaknesses and position COCOO as an expert facilitator capable of resolving the dispute.

Core Allegations Against Spain

COCOO’s claims are grounded in official reports from the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF), as well as investigations into public records.

Violation of Transparency Obligations: Citing a 2024 ECA report, COCOO claims Spain has failed to consistently define and report on the “final recipients” of RRF funds, as required by Article 22 of the RRF Regulation. This opacity is said to create risks of fraud, corruption, and favoritism.

Allocation of Funds to Sanctioned Companies: A central accusation is that over 30 companies, previously fined by Spain’s competition authority (CNMC) for anti-competitive practices, have received more than €800 million in RRF-funded contracts. This directly contravenes Article 9 of the RRF Regulation and Article 13 of Spain’s General Subsidies Law. Specific examples cited include the construction firms Dragados (ACS Group) and Sacyr, which allegedly received €83.5 million.

Mismanagement of Public Procurement: Spain is accused of violating EU public procurement directives. The Spanish Royal Decree-Law 36/2020, which was meant to streamline the process, introduced “flexibilities” that allegedly weakened oversight, including “less strict rules on economic and technical solvency in tendering procedures”.

Inefficiency and Delays: The ECA found that Spain failed to meet over 24% of its planned milestones on time due to administrative inefficiency and poor planning. This jeopardizes the effective use of funds by the August 2026 deadline.

Inequitable Allocation of Funds: A disproportionate share of funds has allegedly been given to large corporations, sidelining SMEs. According to the ECA, 72% of grants to companies were concentrated in the top 1% of recipients.

Breach of the “Do No Significant Harm” (DNSH) Principle: Several projects, including in agriculture and building decarbonization, have allegedly failed to comply with the environmental requirements of the DNSH principle, undermining the EU’s climate goals.

Proposed Solutions and Requested Actions

COCOO has presented a list of constructive solutions to the Spanish government and the European Commission, while also demanding immediate corrective measures.

Solutions Offered:

Creation of an Independent Observatory to monitor fund distribution in real-time.
Implementation of an AI-driven transparency platform to detect risks in contract allocation.
A “Risk Traffic Light” system to categorize beneficiaries based on their compliance history.
A retrospective audit of contracts awarded to sanctioned companies.
Development of a voluntary Code of Best Practices to raise standards in public fund allocation.

Actions Demanded from the EU:

Immediate suspension of all RRF payments to Spain.
A comprehensive audit by EU institutions (ECA, OLAF, EPPO) into Spain’s RRF management.
The clawback and redistribution of misused funds, prioritizing SMEs.
The establishment of an independent monitoring mechanism to oversee Spain’s RRF projects.
A formal request for the European Public Prosecutor’s Office (EPPO) and the European Anti-Fraud Office (OLAF) to investigate potential fraud.