Spain’s Princess Cristina Ordered To Appear In Court On Corruption Charges

A Spanish court has ordered Juan Carlos’s daughter Princess Cristina to answer allegations of money laundering and tax fraud, as faith in the monarchy hits a new low.

01.07.14 6:50 PM ET

The King of Spain’s troubled reign suffered a devastating blow on Tuesday when his youngest daughter was ordered to appear in court over allegations of money laundering and tax fraud. Princess Cristina is accused of using funds laundered through her husband’s charity to pay for her home to be redecorated and buy gifts that included copies of Harry Potter.

Juan Carlos, whose coronation followed the death of General Franco in 1975, has struggled to maintain the monarchy’s reputation in a country that has been ravaged by Europe’s recent economic crisis. In 2012, as the Spanish unemployment rate hovered around 25 percent, the King was photographed with an elephant he had shot on an expensive safari in East Africa.

The royal family is perceived as out-of-touch and accused of fatally undermining its relationship with the Spanish people, a feeling that will be intensified after a judge ruled that Princess Cristina should be formally named as a suspect ahead of a potential trial later in the year. It would be the first time in Spain’s history that a senior member of the royal family is forced to appear in court.

Cristina’s husband, a former Olympic handball medalist, is alleged to have used his royal connections to embezzle $8 million in public funds through his charitable foundation, the Noos Institute. Inaki Urdangarin, who was named The Most Excellent Duke of Palma after a lavish royal wedding in 1997, was formally excluded from royal duties last year after allegations that millions of dollars intended for the charity had been sent to the duke’s private offshore bank accounts. The duke and the princess deny any wrongdoing.

Jose Castro, the examining magistrate in Palma de Mallorca, released a 200-page ruling after an investigation into the scandal that has rocked the royal family. He said there was evidence that Princess Cristina had broken the law.

Castro said there was evidence that the Noos foundation had overcharged for organizing conferences and hidden the additional funds outside the country. He also said the princess had spent cash held in a shell company. “These sums were used on strictly personal spending… and they should have been declared in income tax statements… but it is evident that neither Inaki Urdangarin nor Mrs. Cristina de Borbon ever did so, which means they repeatedly defrauded the tax authority,” he wrote.

Urdangarin’s reputation has been badly damaged by years of similar allegations, but the proven involvement of Juan Carlos’s daughter could be the final blow to his faltering grip on power.

“Cristina is seen as being close to the king; her problems are the king’s problems,” Lars Hovbakke Sørensen, a lecturer in European royalty at the University of Copenhagen, told the Daily Beast. “I wouldn’t be surprised, if King Juan Carlos chooses to resign in the coming months, and hands over the throne to Crown Prince Felipe in an attempt to save the monarchy.”

Juan Carlos, 76, was once hugely popular for his role in overseeing the restoration of democracy to Spain, but his popularity has fallen to unprecedented levels in recent years. An opinion poll published by El Mundo newspaper on Sunday found that 62 percent of Spaniards thought the king should abdicate, after several years of corruption claims. Until recently, he was considered one of the world’s most popular monarchs. He appeared in public for the first time in two months this week, after a hip operation, his ninth surgery in recent years.

Princess Cristina is expected to appear before a judge on the Balearic island of Mallorca on March 8th, where she will be questioned about the financial records of Aizoon, a private company jointly owned by her and her husband. Judge Castro, who has spent almost two years investigating the allegations of corruption, underlined in his dossier that “all are equal before the law.”