Swiss prosecutors close corruption case against Spain ex-king

Swiss prosecutors said Monday they have closed a case against former Spanish king Juan Carlos over suspicions he received €88 million in kickbacks for facilitating a high-speed rail contract in Saudi Arabia awarded to a Spanish consortium.

Spain´s former King Juan Carlos has been involved in a number of scandals over the past decade. (Photo by OSCAR DEL POZO / AFP)
Spain's former King Juan Carlos has been involved in a number of scandals over the past decade. (Photo by OSCAR DEL POZO / AFP)

After three years of investigation, the Geneva top prosecutor’s office said in a statement that the money transferred into a Swiss bank account had “not been sufficiently documented”.

But it said the probe had  “not permitted to establish in a sufficient manner a link between the amount received from Saudi Arabia and the contract to build the high-speed train.”

Geneva prosecutors opened their probe on August 6th, 2018 into suspicions of “aggravated money laundering” against the 83-year-old former monarch following media reports about possible illegal commissions he had pocketed in connection with the high-speed train deal.

A Spanish consortium was awarded the lucrative contract in 2011 to build the high-speed rail link between Medina and Mecca.

The suspicions centred on $100 million (€88.6 million) that Saudi Arabia’s late King Abdullah deposited in 2008 into a Swiss bank account to which Juan Carlos had access.

The Geneva prosecutors said their investigation had established that the money had indeed been deposited into an account with Geneva bank Mirabaud & Cie belonging to the Lucum foundation, for which Juan Carlos held the economic rights.

They also determined that there was evidence the ex-king transferred the bulk of this money in 2012 to an account in the Bahamas belonging to a company held by his former mistress, German businesswoman Corinna Zu Zein-Wittgenstein.

The prosecutors said that the complexity of the transactions, using a foundation and various companies, “showed a will to dissimulation”, but said there was not enough evidence to proceed.

The ex-king, a key figure in Spain’s transition to democracy following the death of dictator Francisco Franco in 1975, has meanwhile also been the target of several probes in Spain over his financial dealings there.

Spanish prosecutors decided earlier this month to push on with their investigation for another six months.

The probes have especially been focused on whether there was any illegal dealings after the former king abdicated in 2004 and lost his immunity.

While he has not been charged with any crime, the probes have tainted his reputation and that of the Spanish monarchy.

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How Spain aims to make its scandal-hit monarchy more transparent

Spain's leftist government and King Felipe VI have taken steps to boost the transparency of the monarchy, which has been tainted by financial scandals involving senior royals including his father, former monarch Juan Carlos.

How Spain aims to make its scandal-hit monarchy more transparent

Under a decree passed Tuesday by socialist Prime Minister Pedro Sánchez’s government, the royal palace must publish its budget and make tenders public.

The palace accounts must be audited by the supreme Court of Auditors, while senior palace officials will have to declare their personal wealth both when they take up their post and when they leave.

Gifts given to royals will be catalogued before they are transferred to the state, donated to charity, or become property of the royal palace.

The measures, in line with those already in place at public institutions, were developed with the palace in recent months, minister for the presidency Felix Bolanos said.

“This is a very important step forward in the modernisation, in the exemplarity of the royal palace… a step forward on transparency,” he told a news conference after a weekly cabinet meeting.

“This is the step forward which citizens demanded from the royal palace… from the government,” he said.

The decree was passed a day after the palace unveiled Felipe’s personal wealth for the first time, saying it amounted to around €2.6 million ($2.8 million).

The bulk of the king’s personal wealth takes the form of checking or savings account deposits, with the rest made up of art, antiques and jewellery, the palace said.

His estate stems from his earnings as king, and before that as crown prince, it added.

(From L) Spanish Prime Minister Pedro Sánchez, former Queen Sofía of Spain, former King Juan Carlos I, Spanish princess Leonor and princess Sofia, Spain´s Queen Letizia and Spain’s King Felipe VI arrive to attend commemorative acts marking the 40th anniversary of the Spanish Constitution at the parliament in Madrid on December 6, 2018. (Photo by CURTO DE LA TORRE / AFP)

Felipe ascended the throne in 2014 and set out to restore the monarchy’s prestige — after his father Juan Carlos abdicated against a backdrop of scandals over his finances and love life.

He ordered an audit of the royal household’s accounts and issued a “code of conduct” for its members.

The following year he stripped his older sister, Princess Cristina, of her title of duchess as she prepared to stand trial on tax fraud charges.

While she was ultimately cleared by the courts, her husband Iñaki Urdangarín was convicted of fraud and embezzlement.

Then in 2020 Felipe renounced any future personal inheritance he might receive from his father, and stripped him of his annual allowance of 200,000 euros ($213,000) after fresh details of his allegedly shady dealings emerged.

Months later Juan Carlos, a key figure in Spain’s transition to democracy following the death of dictator Francisco Franco in 1975, went into self-imposed exile in the United Arab Emirates.

Spanish prosecutors in March dropped three investigations into the finances of the former king, citing lack of evidence, the statute of limitations and the immunity he enjoyed as head of state.

But the prosecutor’s office nonetheless said it has detected several “fiscal irregularities” in his affairs.

The government said the measures unveiled Tuesday will bring the royal palace closer to the “highest standards of other European royal palaces”.

Conservative daily El Mundo said the measures will make it possible to “maintain rigorous and respectful control over the monarch’s heritage so the situations that undermined Juan Carlos’s reputation never happen again”.

But far-left party Podemos, the junior partner in Sanchez’s coalition government, said the measures were unlikely to bring about change.

“As long as the king retains his immunity, any make-up regarding the monarchy will have little effect,” said Pablo Echenique, the parliamentary spokesman for Podemos, which backs the abolition of the monarchy.