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CORRUPTION

Spain shelves probe into €7-billion Saudi rail project contract

Spanish prosecutors have dropped a probe into suspicions Spanish firms paid kickbacks to secure a contract to build a high-speed rail link in Saudi Arabia, a ruling made public Thursday showed.

Spain shelves probe into €7-billion Saudi rail project contract
The investigation centred on $100 million Saudi Arabia’s late King Abdullah deposited into a Swiss bank account in 2008, to which Juan Carlos had access. (Photo by PIERRE-PHILIPPE MARCOU / AFP)

In 2011, Saudi Arabia awarded the contract worth €6.8 billion($7.2 billion) to a consortium of 12 Spanish companies and two Saudi firms to build the railway linking Islam’s holiest cities, Mecca and Medina.

Spanish prosecutors opened an investigation into the deal after a former mistress of Spain’s former king Juan Carlos was heard in a telephone conversation discussing commissions which were allegedly paid to secure the contract.

Anti-corruption prosecutors decided to shelve the probe “as it was not possible to determine the possible commission of the criminal offence”, according to the ruling dated May 4th.

The information which was gathered is “clearly insufficient”, and was “in part contradictory”, it added.

Juan Carlos was the target of a separate probe over the high-speed railway contract.

The investigation centred on $100 million Saudi Arabia’s late King Abdullah deposited into a Swiss bank account in 2008, to which Juan Carlos had access.

A unit of the highspeed train built by Spanish manufacturer Talgo is loaded onto a freighter in Barcelona’s port in 2014. (Photo by JOSEP LAGO / AFP)

Prosecutors dropped the probe in March, saying the could not establish “any link” between the receipt of the money and the awarding of the contract.

Swiss prosecutors had also opened a probe into the same issue in 2018 but dropped the case in December for lack of evidence.

Saudi Arabia opened the 444-kilometre (275-mile) railway to the public in October 2018. It has improved transport connections between Mecca and Medina during the annual haj pilgrimage.

Spanish construction and engineering firm OHL, train maker Talgo and state track operator Adif were among the firms which made part of the consortium that built the railway.

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ROYALTY

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.

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