The king of scandal: Spain to investigate private jet fund for Juan Carlos

With a reputation in tatters, the former monarch of Spain now faces an investigation into the public funding of his gilded life in exile, reports Graham Keeley in Madrid

Friday 14 May 2021 23:15 BST
In 2020, prosecutors from Spain’s Supreme Court opened three separate investigations into Juan Carlos’s financial affairs
In 2020, prosecutors from Spain’s Supreme Court opened three separate investigations into Juan Carlos’s financial affairs (Getty)

A tax investigation into the murky financial affairs of the disgraced former king of Spain has prompted a political row over the public funding of Juan Carlos’s life of luxury in exile.

In what is believed to be the first such inspection carried out on a Spanish monarch, investigators will look into a fund which paid for private jet flights taken around the world by the 83-year-old and, at times, his former mistress.

It casts fresh light on the cloud of scandal which prompted Juan Carlos to flee to Abu Dhabi where he has been living in exile since August.

Juan Carlos now lives in a villa on the private island of Nurai, off the coast of Abu Dhabi, as a guest of the United Arab Emirates government.

He has bodyguards, a secretary, an office and a private car paid for by the Spanish government.

Spain’s deputy prime minister Carmen Calvo, a senior figure in the Socialist party which governs with the far-left republican Podemos party, confirmed tax authorities were looking into the financial affairs of Juan Carlos.

Sources close to King Felipe were reported to be concerned the tax probe will end in Juan Carlos facing fraud charges.

“We are worried. What we are seeing is a version of Groundhog Day. We keep appearing in the papers constantly with fresh revelations,” a palace source told El Español, an online newspaper.

Left-wing and Basque and Catalan nationalist parties have demanded a constitutional reform of the royal family’s affairs which the government is said to be considering when the pandemic is over.

Jon Iñarritu, of the Basque nationalist party EH Bildu, called for “more transparency and less secrecy” around the monarchy.

In an angry exchange in the Spanish parliament, Ms Calvo retorted: “Juan Carlos has left and will return when he needs or wants to return. He has nothing pending with the justice system. He has regularised his finances and enjoys the presumption of innocence.”

She refused to be drawn on “ethical” considerations about the former king’s affairs.

Tax inspectors will try to discover if cash payments by the octogenarian royal to the authorities to settle undeclared tax bills were sufficient to cover all the money he owes tax authorities.

Juan Carlos made an extraordinary payment of almost €4.4m (£3.79m) in unpaid taxes to Spain’s authorities in February, the second such payment in three months.

The payments were effectively an admission of an irregular financial situation.

Juan Carlos’s lawyer issued a statement at the time which said they were aimed at clearing tax owed on the cost of hiring private jets to fly to the Caribbean, the Middle East and the United States.

Corinna zu Sayn-Wittgenstein, a London-based businesswoman who was the former king’s ex-lover, was said to have accompanied him at times as he jetted around the world.

She says she was asked by Juan Carlos to repay the cost of the flights which she did.

The former monarch’s flights were paid for with funds from Swiss accounts officially belonging to Juan Carlos’s cousin, Álvaro d’Orleans-Borbón.

Between 2016 and 2019, Juan Carlos took flights on private jets worth €5m which were paid for by the Zagatka Foundation, a Liechtenstein-registered fund of which Mr d’Orleans-Borbón is the principal beneficiary.

In total, the foundation’s Swiss bank accounts were reported to have paid out €8m on private jets used by Juan Carlos since 2009.

Tax inspectors will investigate if the Zagatka Foundation is a front company.

The Zagatka fund and a $100m donation to Juan Carlos from the late king of Saudi Arabia in 2008 are being investigated by a Swiss prosecutor.

The Swiss investigation is also investigating associates of the former king for alleged money laundering. No one has been charged.

In 2020, prosecutors from Spain’s Supreme Court opened three separate investigations into Juan Carlos’s financial affairs.

Juan Carlos with the crown prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, in 2011
Juan Carlos with the crown prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, in 2011 ((AFP/Getty))

One centres on a Saudi payment into a Panamanian shell company called the Lucum Foundation.

In 2012, this foundation paid €65m to Ms zu Sayn-Wittgenstein.

Prosecutors are also investigating the alleged existence of a trust fund in Jersey which is linked to Juan Carlos and the undeclared use of credit cards linked to a bank account in Mexico by the former king and his grandchildren.

Juan Carlos paid €678,000 to Spain’s tax authorities in December to try to settle the credit card investigation.

Juan Carlos was stripped of his state stipend of €194,000 by King Felipe last year after it was revealed the former monarch made his son Felipe a beneficiary of a secret fund.

Since coming to the throne after Juan Carlos abdicated in 2014, Felipe has sought to reform the monarchy, making it more transparent.

Javier Sanchez, Juan Carlos’s lawyer, did not reply to a request for a comment from The Independent.

The former king faces no criminal charges and has said he is willing to cooperate with any investigation.

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