Will Scandal Sink the Spanish Royal Family?

Could Juan Carlos, the former king, get caught up in an embezzlement court case involving his daughter’s husband? The royal family and their advisers (nervously) hope not.

August is a time for kicking back and relaxing in Spain. The urban population abandons the sweltering cities and heads to the beach for the month. Phone calls to businesses are greeted with messages informing them that the proprietors are on holiday until September 1, so don’t bother leaving a message.

But, in Madrid’s royal palaces, in the offices of the enormous, opulently gilded Palacio Real and the more humble oversized villa, La Zarazuela (where the royals actually live), things are far from relaxed.

All leave has been cancelled as royals and their advisers anxiously try to make last-minute reinforcements to the “firewall” they have constructed between themselves and the new King’s brother-in-law, Iñaki Urdangarín, who married his sister, the Infanta Cristina, in 1997.

Urdangarín is due in court later this year on charges that he embezzled millions of euros-worth of charity money to support a millionaire lifestyle for himself and Cristina, which raised many eyebrows at the time.

Their lavish lifestyle included the purchase of a €7m apartment in Barcelona in 1999, in which the former Duke of Palma (he has since been stripped of the title) now sits, isolated, nervously awaiting his day in court.

There is every possibility that the next target of prosecutors could be his wife, the former King’s daughter herself.

Leading the decision-making of the inner circle is the new Queen of Spain, Letizia Ortiz, the former newsreader and journalist whom the new king, the whiter-than-white Felipe VI, married in 2004.

One source says that it was the intensely media-savvy Queen Letizia (in 2000 she was the winner of the Madrid Press Association’s Larra Award for most accomplished journalist under 30) who demanded the King’s abdication as the only way to spike the guns of republicans who are eagerly awaiting Urdangarín’s trial later this year and fully intend to use it to bring down the monarchy.

“Doña Letizia lost it and said, ‘If you don’t do something, I am divorcing,’” says the source.

Advisers have been fearful for years that the allegations against Urdangarín—which only became public in November 2011—could fatally wound the monarchy.

They have been circulating since at least 2006, when Antonio Diéguez, a Socialist deputy in the Balearics regional assembly, asked a public question about the €1.2 million of public money spent on a deal between the Balearic government and the Nóos Institute, a sports marketing firm of which Urdangarín was president, to organize a weekend event in 2005.

It subsequently emerged that Urdangarín benefited from millions of euro in Balearic government contracts awarded without bids. A trial in a court of law this fall, and a probable prison term, will mark a sad end to a royal fairy tale which saw the King’s daughter, the Infanta Cristina, marry the dashing, working-class handball player after meeting him at the Atlanta Olympics in 1996, where he was competing.

Get The Beast In Your Inbox!

Daily Digest

Start and finish your day with the top stories from The Daily Beast.

Cheat Sheet

A speedy, smart summary of all the news you need to know (and nothing you don't).

By clicking “Subscribe,” you agree to have read the Terms of Use and Privacy Policy
Thank You!
You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason.

The Urdangarín crisis has not served to draw the royal family together. The old king, Juan Carlos, who abdicated this year in favor of his son King Felipe VI, is no longer on speaking terms with his wife, Queen Sofía, and, sources tell The Daily Beast, the two now live in separate apartments in the palace and communicate only via their secretaries.

Sofía is, of course, long used to her husband’s philandering ways. His infamous Botswana elephant-hunting trip in 2012—with an expensive safari company, while the Spanish people were coping with recession—was made in the company of his rumored girlfriend “Princess” Corinna Zu Sayn-Wittgenstein, the divorced wife of a minor German nobleman. She is routinely dismissed by Madrid wits as “a Danish tart.” She denied in an interview with Vanity Fair that she has ever had a romantic relationship with the King.

Although the stories of Juan Carlos’ philandering are legendary, fortunately Sofía is not interested in exposing, humiliating or “bringing down” her husband.

But one long-running Juan Carlos-related paternity suit is now back in court after Juan Carlos lost his total immunity from prosecution following his abdication. Alberto Solà Jiménez, 58, a waiter, claims that his biological mother, who belonged to a prominent Catalan banking family, had a relationship with Juan Carlos before he became king. He is alleged to have had over 1,500 lovers and to have even made a pass at Princess Diana.

Extramarital affair rumors (even though, for years the papers did not report them) have never been a problem for Juan Carlos. Thanks to the huge reserves of goodwill he earned by ensuring a bloodless transition from the Franco dictatorship to democracy, the Spanish public continue to forgive him his lovers.

Juan Carlos was put on the throne by Franco who expected him to continue his authoritarian regime, but Juan Carlos double crossed him, and, soon after his enthronement, introduced reforms to dismantle the Francoist regime and begin the Spanish transition to democracy.

Many Spaniards take a perverse pride in their red-blooded royal. Others, like long-suffering partners the world over, simply put up with it and try as best they can to ignore it.

But sins of money are not so easily pardoned. Spain was hammered by the financial crisis and continues to bleed. Unemployment is still a scarcely believable 26 percent. Shooting elephants, as Juan Carlos did in 2012, is not as outrageous in the land of the bullfight as it is in other parts of the world. What the mob was really upset about was the money. The trip may have cost as much as $30,000.

Indeed, money is the Achilles’ heel of Juan Carlos. His grandfather, Alfonso XIII, fled the country during the civil war in 1931 and abandoned his estates and most of his fortune. So, when Juan Carlos was put on the throne by Franco, he was said to be stone broke. Now, his personal wealth is estimated at as much as $2 billion.

“Juan Carlos has always been slightly obsessed by acquiring money,” says one member of Madrid society.

Loyal-minded Spanish noblemen insist to The Daily Beast that there was absolutely no cause for alarm and that the Spanish royal family was totally secure. This is wishful thinking. Diego Torres, Urdangarín’s former business partner, has testified that the king’s brother-in-law never made a move without Palace approval, and that his wife, Cristina, as an officer of the Nóos Institute, was involved in the running of it.

The Infanta has already been told she will face further investigation as a co-signatory on many Noos Institute and Urdangarin documents.

The investigating judge, José Castro, noted that Urdangarin's alleged crimes would have been “difficult to commit without at least the knowledge and acquiescence of his wife.” He recommended that the princess remain a formal suspect in the case.

The hope for the Spanish royal family lies in Letizia. Mocked by Spanish society—who were outraged when the Crown Prince married a divorced newsreader with not a drop of noble blood in her veins—she is nonetheless the one who “gets it.”

This year, for example, she urged King Felipe to host a lunch for prominent members of the gay community to coincide with Gay Pride in Madrid. “Don Felipe had a large lunch party for all the top gays organizing the event in Madrid,” says a source. “It went down very well. It’s easy for a monarchy to pull the people ’round if they go at it the right way.”

The royal family might just be able to withstand the scandal of another series of corruption allegations or even a trial against the Infanta. The nightmare is that suggestion of financial wrongdoing—or cover-up on behalf of his daughter—touches Juan Carlos.

If that happens, the palace can only hope that the astonishing sacrifice of his abdication this year will be enough of a firewall to save the present king from the sins of his father.