Web-based daily El Confidencial published a scoop on October 6: After 16 months of investigation the Spanish prosecutor-general’s office will not be charging former king Juan Carlos with money-laundering, tax evasion and bribery.
The revelation that the ex-monarch will probably get off scot-free has shone a torch down the sewer of the Spanish State, highlighting the rats scurrying along its judicial, executive, and parliamentary reaches.
How could the case against Juan Carlos, dubbed an “international commission agent” in the prosecutor-general’s own documents, be shelved when his operations have become notoriously public?
The prosecutors, on information from their Swiss counterpart Yves Bertossa, have had solid evidence that the ex-king practised money-laundering, bribery, influence-peddling, and tax fraud.
For years he hid more than €100 million in tax havens, never declaring this fortune to the tax office.
Most of the hoard (€65 million) was a “gift” from defunct Saudi king Abdalá bin Abdulaziz al-Saúd, in truth a reward for helping a consortium of Spanish firms win the contract to build the High-Speed Train line between Medina and Mecca.
The Spanish capitalists beat their French rivals to this prize when they reduced their quote by 30%.
Bertossa continues to investigate the money managers who handled the €65 million transfer into the ex-king’s secret Swiss bank account.
Juan Carlos also used “black” credit cards, secretly financed by Mexican millionaire Allen de Jesús Sanginés Krause. This undeclared fund was mainly used to cover €8 million in private jet travel and the €3 million in similar travel by Corinna Larsen, the ex-king’s former, now estranged, lover.
This scam was executed via an arm’s-length “foundation” in tax shelter Liechtenstein.
When the ex-monarch was tipped off by the prosecutor-general’s office that he was a subject of investigation, he had his high-society mates lend him the €5 million needed to meet his tax arrears. Such was the price of avoiding tax fraud charges carrying up to six years jail.
Efficiently paid tax debts
In 2014, the New York Times estimated the ex-king’s “worth” at US$2.8 billion. This figure was based on his commission on Spanish export deals, mainly in arms to Middle East dictatorships. Until the Spanish Socialist Workers Party (PSOE) came into office in 1982, it also included his US$1–2 commission on every barrel of Persian Gulf oil imported into Spain.
Juan Carlos’s €5 million paid to the tax office was thus a pittance compared to his real tax liabilities. It only related to his private jet travel: he made no payment on other millions stashed away in his tax havens.
That was mainly because he didn’t have to. These “earnings” were made before Juan Carlos abdicated as king to his son Felipe (in June 2014). Before that date, he was protected from the law by article 56.3 of the Constitution: “The figure of the King is inviolable and not subject to any responsibility.”
Inviolability allowed Juan Carlos to indulge in an orgy of influence-peddling.
Those who paid him to whisper in the ear of Spanish government and big business included former Kazakhstan president Nursultán Nazarbéyev (who handed him a suitcase of US$5 million in cash) and the Sultan of Oman (who bestowed a €62.5 million London penthouse on his “royal brother”).
So keen was the king to avoid formal bank transfers of such loot that he shifted heaps of it in and out of his various tax havens on private jet flights. At the Spanish end, the defence ministry allowed him to use Torrejón air base for some of these.
According to Spanish media reports, the prosecutors will give three main reasons for not preferring charges against Juan Carlos.
The first will be that the ex-king received his €65 million Saudi gift when he had royal inviolability. He later transferred this sum to Larsen’s Bahama account, but it will be difficult to prove that it had the illicit origin needed for the charge of money laundering to stick.
The prosecutor is formally keeping this line of investigation open — possibly to avoid being cast in poor light by any charges Bertossa brings against the ex-king’s front men in Switzerland — but their requests for information from the Saudi monarchy’s legal authorities have so far yielded nothing (and are expected to yield nothing).
Secondly, the ex-king’s €5 million tax office payment did not follow on an official notification: in that case payment would have left open the possibility of further investigation and laying of charges.
However, it was the prosecutor-general office’s own friendly tip-off to Juan Carlos’s lawyers that allowed him to liquidate his tax debts before any formal notification ruled out this fix.
The prosecutor-general’s last ground for closing the case is that the Spanish legal code contains no crime of “unlawful enrichment” that would allow the ex-king to be charged with acquiring irregular and undeclared income.
Getting million-dollar commissions and vintage Ferraris from other heads of state on the promise of helping their country’s commercial interests is apparently legal.
Who’s to blame?
So, who will be responsible if, as seems inevitable, the Borbon crook gets off?
When the prosecutor-general, former PSOE attorney general Dolores Delgado, declares that her office’s investigations are at an end, the message of the “detailed and rigorous report” being promised will be: “Don’t blame us!”
According to sources cited in the October 11 Independiente: “It will be clear that there has been no hold-up or delay on the part of the prosecutor-general’s office.”
However, for Ignacio Escolar, editor of Spain’s leading left web-based daily el diario, whose investigators uncovered several of Juan Carlos’ scams, “the role of the prosecutor-general’s office has been a national tragedy, confirmation that the Kingdom of Spain is first kingdom and only then parliamentary democracy.”
Escolar wrote on October 6: “The prosecutor-general’s office has decided to shelve the criminal investigation of the king after two years of keeping the case asleep in various departments, never bringing it to the Supreme Court so that he might be charged and summonsed.”
He also noted that the exemption from prosecution afforded Juan Carlos when he speedily paid his tax debt was not granted to a Galician businessman who had tried the same trick, hoping that rapid payment would save him from prosecution. The Supreme Court ruled that it didn’t.
The stakes for the PSOE
Who would most stand to gain if Juan Carlos were brought before the Second Chamber of the Supreme Court, which hears all charges against defendants holding official positions with any sort of immunity?
This is the Peoples Party (PP)-dominated chamber, which brought down the vindictive sentence of 99 years jail against the organisers of the Catalan independence referendum.
If presented with a less-than-watertight prosecution case against the ex-king, it would be near-certain to absolve him, allowing the right and far right to paint Juan Carlos as a victim rescued from the PSOE-run prosecutor-general’s office.
The decision not to bring charges against Juan Carlos fits with a core PSOE obsession — to preserve the monarchy as keystone to the unity of Spain, while covering up the rotten behaviour of any incumbent.
That’s hard when you’re dealing with the Borbon dynasty, generations of in-bred far-right snobs fixated on money and without an inkling of morality. In the case of Juan Carlos, the monarchical principle was embodied in someone who “can’t tell the difference between what is legal and what isn’t” (in Larsen’s words).
Since the previous PP government persuaded Juan Carlos to abdicate, reversing the monarchy’s waning prestige has required his son Felipe VI to inflict painful wounds on his father and himself.
Gone are Felipe’s position as heir to the ex-king’s tax havens, Juan Carlos’s state stipend, his Spanish welcome mat (he presently lives in gilded exile in Abu Dhabi), and simple filial gratitude (Felipe didn’t even ring his father on his 83rd birthday).
Gone, too, are the once regular questions about the monarchy by the Centre for Sociological Investigations, Spain’s main public opinion surveyor.
To fill the gap, the Platform of Independent Media now does an annual poll. The latest edition shows that in a monarchy versus republic referendum, 39.4% would vote republic, 31% monarchy, while 29.6% would not vote, vote informal or are undecided.
Also doomed, however, is any chance of a Congress investigation into Juan Carlos’s affairs. On the Congress speakership board, the PSOE has voted 15 times with the PP, the racist Vox and the neoliberal Citizens not to allow discussion of the ex-king’s affairs.
Only the republican Unidas Podemos (UP), the PSOE’s junior partner in government, has voted for investigation, supported in Congress by More Country and the Catalan, Basque, Galician and Valencian “enemies of Spain”.
All of which means that Spain’s putrescent monarchy will be an issue as never before at the next general election.
[Dick Nichols is Green Left’s European correspondent, based in Barcelona.]