Spain’s Graft Scandals Reach Palace as King’s Adviser Testifies

The graft allegations roiling the Spanish elite may edge closer to the head of state, King Juan Carlos, when his son-in-law and a senior palace official testify in court on corruption charges.

Inaki Urdangarin, a former Olympic handball player married to Princess Cristina, is due to answer questions in Mallorca tomorrow as part of a private prosecution where he has been named as an official suspect on six counts including fraud, embezzlement and money laundering, a court spokeswoman said. Magistrates on the tourist island will also question Carlos Garcia Revenga, the princess’s personal secretary, who is also a suspect, she said.

The corruption investigation follows a year of missteps that have tarnished the 75-year-old king’s reputation and broken a taboo that prevented Spanish media from reporting on his private life. In April, the monarch apologized to his people after a trip to Botswana came to light when he fell and broke his hip. El Confidencial newspaper said he was on an elephant hunt with a friend, Corinna zu Sayn-Wittgenstein.

“They’ve been so over-protected,” Juan Pan-Montojo, a professor of contemporary history at Madrid’s Autonomous University, said in an interview yesterday. “It makes the shock all the greater when we discover these god-like, Olympian figures go hunting in Botswana” at a time of national hardship.

A spokesman for the king declined to comment. The Royal Household also speaks for Princess Cristina and Revenga. Urdangarin’s lawyer, Marius Pascual Vives, didn’t respond to a message left with his assistant requesting comment.

German Aristocrat

Clean Hands, the Madrid-based public workers union that filed a private prosecution against Urdangarin, will ask the court to name Princess Cristina as a suspect and may request that Sayn-Wittgenstein, a German aristocrat, is called as a witness, Miguel Bernad, general secretary of the group, said in an interview yesterday.

The allegations against the king’s son-in-law stem from his involvement in the non-profit Noos Institute aimed at making Spanish companies more competitive. The institute, where Urdangarin was chairman, won 5.8 million euros ($7.7 million) of contracts from the regional governments of Valencia and the Balearic Islands between 2004 and 2007 without participating in a competitive tender, ABC newspaper reported last year.

E-mails from Urdangarin that his former partner Diego Torres supplied to magistrates in Mallorca, refer to meetings the king allegedly attended to help secure financial support for his son-in-law’s commercial projects, El Pais newspaper reported this week.

Princess’s Secretary

The documents, published on the newspaper’s website, show the involvement of Revenga, the princess’s secretary, as treasurer of the institute, as well as correspondence from Sayn-Wittgenstein about a possible job for Urdangarin and describe Princess Cristina’s involvement in business negotiations.

“Torres said that she had knowledge and participated in all decisions,” Bernad said, referring to Torres’s private testimony to magistrates last week. The judge has turned down three previous requests to make the princess a suspect, he added.

Being named as a suspect does not mean that Revenga has been charged and the king will take no action over the accusations until his advisers have assessed his testimony, the Royal Household said Jan. 30.

The allegations against Urdangarin come as corruption allegations have dominated the political agenda. El Mundo newspaper reported last month that the former treasurer of the governing People’s Party, Luis Barcenas, handed out illegal cash payments to senior officials over more than a decade. Barcenas’s lawyer, Alfonso Trallero, declined to comment on the accusations when contacted by Bloomberg.

Corruption Penalties

Prime Minister Mariano Rajoy has denied a report by El Pais that he received more than 250,000 euros from Barcenas and this week announced he’ll seek tougher penalties for those convicted of corruption charges.

Spain’s 35-year-old democracy which has been battered by a five-year economic slump that has sent unemployment to a record 26 percent, according to Madrid-based lawyer Jorge Trias Sagnier. The government failed to meet its budget-deficit commitments with the European Union last year even after cutting spending on health and education and raising taxes, Rajoy said this week.

King Juan Carlos led Spain through the transition to democracy after the death of dictator Francisco Franco and cemented Spaniards newly acquired rights when he faced down a military coup in 1981. Now he’s become a symbol of the decay of those democratic institutions, said Trias Sagnier, a former PP lawmaker who said he knew of officials receiving cash payments when he worked with the party.

‘Old, Sick’

“The king was the undisputed leader and source of inspiration for many years,” Trias said in an interview last month. “But now he’s old and sick and he can’t inspire.”

As well as the broken hip suffered last year, the king had a 90-minute hip replacement operation in November. He will have an operation on a herniated disc in his back on March 3 at hospital in Madrid, the Royal Household said in a statement yesterday.

The scandal may force Juan Carlos to step aside in favor of his son Prince Felipe or even jeopardize the handover. Juan Carlos’s grandfather, Alfonso XIII, was forced to abdicate by Republicans in 1931 and his father spent much of his life in exile while the country was ruled by Franco.

Pere Navarro, leader of the Catalan Socialist Party, this week called on Juan Carlos to abdicate while Gaspar Llamazares, a lawmaker with the United Left, called for the monarchy to be abolished in favor of a third Spanish Republic.

“The king is hanging on to prevent Felipe being exposed,” Pan-Montojo said. “I don’t know how much longer he’ll be able to last, even physically. He’s getting really worn down.”

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