Misc 06/12/2020

Ex-King proposes Treasury pact to avoid corruption investigation reaches the Supreme Court

He proposes a tax adjustment which continues to hide its funds abroad

4 min
De Botswana  al paradís fiscal:  el declivi de Joan Carles I

MadridThere are three investigations led by the Prosecutor's Office in Spain that delve into the figure of Juan Carlos I. Two of them have little chance of success because they occurred before the abdication of 2014 - protected by inviolability - but there is a third one that, if it ends up reaching the Supreme Court, could put the royal family on the ropes, since it also splashes Queen Sofia and some of her grandchildren. It is the opaque cards' investigation: credit cards allegedly given by a Mexican magnate and that Juan Carlos I and his wife would have used between 2016 and 2018 without declaring the expenses to the Treasury, for a value of more than 278,000 euros a year, which could lead to up to five years in prison for tax offense.

In order to prevent this investigation from going ahead at all costs, Juan Carlos I's lawyer is said to have filed a declaration with the Tax Office to regularize his tax situation in Spain, which would mean recognizing fraud. This regularization makes no reference to his money abroad. According to the Sunday edition of El País, quoting sources from the Treasury, the proposal of the monarch's lawyer, who has been on the run for four months in the United Arab Emirates, is already on the table of the Ministry of Finance. Additionally, sources close to Juan Carlos I have assured the newspaper El Mundo they are studying together with their the legal team the possibility of presenting a regularization, which they say to have communicated to the Spanish government, but no voluntary declaration has been presented yet. Consulted by the ARA, the Ministry of Finance neither confirms nor denies the information, since by law they cannot refer either to taxpayers nor to specific files.

Be that as it may, the willingness to negotiate with the Tax Agency means, for the first time, the admission of fraud. If an agreement is reached with the Treasury, Juan Carlos I would return all the money defrauded in Spain, plus a fine, in exchange for closing the judicial file. This would mean putting an end to the most complex judicial front for the monarch, since the Supreme Court Prosecutor's Office is inclined to close the investigation on the Meca high-speed train commissions, and does not expect to do much with the money-laundering folder - since it could go back to 2005. However, it would still not regularise his assets abroad.

Since the flight of the ex-King to Abu Dhabi, details of the monarch's alleged corruption have only grown. Felipe VI's position is becoming increasingly difficult, on the verge of a Christmas speech in which he will have to say something about his father's situation. In addition to this, he has decided to remain silent at a time when the extreme right is attempting to patrimonialise his figure. He has not made a single gesture in response to the avalanche of letters from retired soldiers who, with more than belligerent language, are asking him to react to Pedro Sánchez. The last letter, from more than 250 ex-military men willing to "give their lives" to defend Spain from the coalition government, who they accuse of "despising" Felipe VI.

Socialist party silence

The news from El Pais has shaken the beginning of the commemoration of the 42nd anniversary of the Spanish Constitution in Parliament this Sunday, but beyond Unidas Podemos none of the parties have put Juan Carlos I in a tight corner. Although for the spokesman of Podemos in Parliament, Pablo Echenique, the decision translates as a "confession of fraud", for the leader of the PP (a main opposition party), Pablo Casado, it is a fact to be framed in the "private life" of the monarch. The PSOE (the Socialist party), on the other hand, has decided to keep a scrupulous silence regarding the information. No socialist spokesman has made any statements to the press, and socialist members of the Spanish government have slipped out of the media, even from informal conversations.

For the PP, the "legacy" of the ex-King is untouchable. Casado has referred to Juan Carlos I as the "architect of the Transition" to democracy, and has not wanted to talk about recent events. The same has been done by some of the regional presidents of the PP such as Isabel Díaz Ayuso, from Madrid, who has assured that today was "a good day to vindicate his figure". The Basque National Party, on the other hand, which never takes part in this kind of proceedings, has launched a warning: the crown has to react to the suspicions of corruption or "it could bring them a surprise in the medium term", said its spokesman in Congress, Aitor Esteban.

Juan Carlos I's voluntary declaration has been on the table since his former lover Corinna Larsen declared that the ex-King had given her 65 million euros, coming from the Saudi King. But for now, it would seem that the monarch takes steps only when a cause that could affect him is not protected by inviolability.