Revered Catalan Leader Tarnished by Tax Investigation

Scandal Is an Embarrassment to Separatists Planning Independence Referendum

BARCELONA— Jordi Pujol often said he discovered his mission for Catalonia while climbing a mountain as a boy and seeing the destruction wrought by the Spanish Civil War of the 1930s. Decades later, as Catalonia’s long-serving leader, Mr. Pujol presided over the resurgence of a region that had been beaten down by war and the subsequent dictatorship of Francisco Franco.

Now the 84-year-old Mr. Pujol, retired but long revered as the modern father of Catalan nationalism, has taken a mighty fall, tarnishing the campaign for the region’s independence from Spain.

In July, Mr. Pujol acknowledged in a statement that he had evaded taxes for more than three decades by failing to declare an inheritance held offshore. Since then, tax investigators and prosecutors have begun poring over the finances of Mr. Pujol and his family, looking for more irregularities.

He has been stripped of honors and abandoned by longtime allies. Barcelona Mayor Xavier Trias, a member of Mr. Pujol’s political coalition, said: “What Jordi Pujol has to do is disappear.”

A scandal is the last thing separatists need as they gear up for a massive demonstration in Barcelona on Thursday designed to build momentum for a planned nonbinding referendum on independence in November. Secessionists say Spain’s central government drains Catalonia of taxes without respecting its language and culture.

Spanish government leaders say Catalans have plenty of investment and autonomy already, and that the referendum won’t be permitted. That position contrasts Spain with the government of the U.K., which is allowing Scotland to vote on independence later this month.

The Pujol affair is an embarrassment to separatists who have rallied behind a battle cry of “Spain Robs Us,” saying that the central government squanders or steals much of what Catalonia pays in taxes. In his statement, Mr. Pujol said his father had left the inheritance, the amount of which he didn’t disclose, in an offshore account and specified that it was to go to Mr. Pujol’s wife and seven children. Mr. Pujol said his family had “never found the right moment” until recently to declare the money, which Spanish authorities say is held in the tax haven of Andorra, and he apologized for having waited so long.

Last week, Spanish Budget Minister Cristóbal Montoro of the anti-independence Popular Party, which governs nationally, called the Pujol probe one of “the most serious cases of financial fraud” in Spain, and said government investigators were seeking further information on the origin of the cash in Andorra. “We can’t believe a communiqué of someone who has hidden the truth, deceiving Catalan society and his voters during more than three decades,” he said.

Mr. Montoro said Mr. Pujol had made his admission only because he knew government tax investigators were on his trail. In his statement, Mr. Pujol said he was motivated to confess due to “written insinuations about the origins” of his family’s economic means.

The Catalan politician’s admission has intensified scrutiny of Mr. Pujol’s oldest son, Jordi Pujol Ferrusola, who was already under investigation for suspected tax fraud and money laundering, according to court documents. Those documents show that the probe was sparked by accusations by a woman who says she was his former lover, and investigators now say they are looking for possible links with the undeclared inheritance.

Another son, Oriol, who stepped down from a party leadership position last year, is the target of an unrelated investigation into suspected influence-peddling. No charges have been filed, and the two Pujol sons have said they are innocent.

Independence opponents can scarcely restrain their glee. “To say that Catalonia is robbed of everything by the state is a fallacy that is beginning to be dismantled,” said María Dolores de Cosdepal, a Popular Party leader.

But analysts say there are limits to the damage Madrid can inflict on the independence movement, as well as risks that hammering on Mr. Pujol could backfire. While many attacks from Madrid have cast him as the personification of the independence movement, the reality is different, said Lluís Orriols, a political scientist at Carlos III University in Madrid.

“The [Catalan] political establishment was among the last to become pro-independence and only after public opinion pressured them,” he said. Mr. Pujol’s Convergence and Union coalition embraced independence only after a demonstration by more than a million people organized by citizens groups in 2012.

Moreover, while the scandal could be devastating to Convergence and Union, the party that stands to gain the most is the Republican Left of Catalonia, which is even more ardently secessionist.

Mr. Pujol burst to prominence in 1960 by organizing a protest against officials of the Franco government, which had repressed Catalan language and culture since the victory of Gen. Franco’s forces in the civil war. Mr. Pujol got two years in prison for that act of defiance and became a Catalan hero.

Spain returned to democracy following Franco’s death in 1975, and Mr. Pujol, who served as Catalonia’s elected president from 1980 to 2003, became a pillar of the new political order. The conservative Madrid newspaper ABC named him “Spaniard of the Year” in 1984. He was recognized as a master of pactismo, political-deal making with the central government that gradually earns more powers and resources for his region.

“We Catalans aren’t secessionists because we are convinced that [independence] isn’t a good solution,” Mr. Pujol said in 1995. “We try to obtain recognition of our national identity within the framework of the Spanish state and by that route we have made very significant progress.”

Catalonia consolidated control of its education system and police force, revived the Catalan language, and opened trade offices around the world.

Mr. Pujol came out in favor of independence only recently, after Spain’s Constitutional Court watered down a painstakingly negotiated revision of Catalonia’s governing statute, which outlines the region’s rights and responsibilities. “If there was an independence referendum now, I would vote for independence, something that I never ever would have imagined,” Mr. Pujol said in an interview in 2012.

Mr. Montoro questioned Mr. Pujol’s motives for embracing secession, suggesting the continuing tax investigation might have prompted him to turn against Spain. Mr. Pujol hasn’t responded to that accusation and his lawyer didn’t return requests for comment.

“We should be self-critical,” said Muriel Casals, the head of Omnium Cultural, a Catalan cultural group that is one of the organizers of Thursday’s demonstration. “Sometimes we Catalans think we’re like the Lutherans of Spain. And the Pujol case is like a slap on the face that says, ‘Look, you’re not so Lutheran.'”

But the case won’t stop the independence push, she said. “We are turning this on its head and saying that we are going to build a new country that is clean, so let all that isn’t clean come out now. We don’t want to sweep anything under the rug.”