No formal probe, but legal questions for Spain’s ex-king

While Spain’s former king Juan Carlos is not under formal investigation, revelations by a former mistress raise legal questions about his financial affairs which officials are poring over both at home and abroad.

In a surprise move, the 82-year-old announced Monday that he was leaving Spain to prevent his personal affairs from undermining his son King Felipe VI’s reign, prompting anti-monarchists to accuse him of trying to “flee justice”.

But Carmen Calvo, Spain’s deputy prime minister, defended the former monarch Wednesday, saying “he is not fleeing anything because he is not implicated in any (criminal) case.”

Even so, public prosecutors in Spain and Switzerland are looking into his accounts in the wake of statements made by his former mistress, German businesswoman Corinna Larsen.

In conversations which were apparently recorded without her knowledge that were leaked to the media, Larsen claimed the former king had bank accounts in Switzerland and received a payoff relating to a 2011 high-speed rail contract in Saudi Arabia.

Swiss daily La Tribune reported in March that late Saudi king Abdullah in 2008 deposited $100 million into a Panamanian foundation’s account in Swiss private bank Mirabaud to which Juan Carlos had access.

– ‘Out of love’ –

The former Spanish king used the account until it was closed in 2012, when he transferred the remaining money in it — nearly $65 million — to Larsen, the newspaper added.

Larsen told Swiss investigators he had transferred to her nearly 65 million euros in the Bahamas, “not to get rid of the money”, but “out of gratitude and out of love”, according to Spanish daily El Pais.

La Tribune said a Geneva prosecutor in 2018 opened a criminal investigation into “suspected money laundering” regarding these transactions and formally accused Larsen, Mirabaud bank, a lawyer and a businessman — but not Juan Carlos.

Swiss prosecutors have declined to comment on the case.

Meanwhile, Spanish prosecutors in 2018 opened a probe into the Saudi high-speed rail contract, which was awarded to a consortium of Spanish companies. The 450-kilometre (280-mile) link between Mecca and Medina was inaugurated in 2018.

Spain’s Supreme Court in June announced an investigation to determine whether the contract had involved the “crime of corruption in international transactions” and whether Juan Carlos was legally responsible — but only for acts committed after his abdication in 2014, because of the immunity he enjoyed until then.

– ‘Disturbing information’ –

Corruption is one of the most difficult crimes to prove, according to sources at Spain’s public prosecutors office.

And it will be hard to argue that the 100 million dollars Juan Carlos allegedly received from Saudi Arabia was a kickback for the high-speed rail contract which was awarded three years later.

Investigators looking into the former king’s bank accounts could search for evidence of money laundering and tax fraud, according to the sources.

But money can be considered to have been laundered only if its source is illegal, the sources said.

So even if it is proven that Juan Carlos received millions of euros from Gulf royals, from Kuwait to Oman to Saudi Arabia as press reports allege, it would still have to be shown that this was not a perfectly legal gift.

And if they found that it was not a mere gift, prosecutors would still have to prove that the former king used this money — by investing it or transferring it from one bank account to another — after he lost his immunity when he abdicated in 2014.

If the former king moved his money abroad without declaring it, he can be held liable for tax fraud, but only for events going back five years. Anything before that falls under the statute of limitations.

But while there is no formal investigation, Socialist Prime Minister Pedro Sanchez said in June “the entire Spanish population are receiving disturbing information which is troubling for us all, including me”.