Corruption scandal threatens to engulf Spanish royal family

By Sinikka Tarvainen Dec 2, 2011, 2:06 GMT

Madrid - Inaki Urdangarin seemed the perfect royal son-in-law: handsome; from a good - even if commoner - family; pleasant; and a former Olympic athlete.

But now, the 43-year-old husband of Spain's Princess Cristina has been implicated in an unprecedented corruption scandal which threatens to tarnish the entire royal family.

King Juan Carlos is reportedly keeping his distance from the son-in-law he once doted upon, while Spanish media make almost daily revelations about Urdangarin's questionable business deals.

Urdangarin, who has the title of Duke of Palma de Majorca, was a professional handball player. His team took bronze in the Atlanta Olympics in 1996, and in Sydney in 2000.

At the Atlanta games, he met Cristina, three years older and the middle of Juan Carlos' and Queen Sofia's three children. The princess was immediately drawn to the tall athlete with blue eyes, gossipy magazines reported at the time.

The couple wed in 1997, and now have four children.

A few years after his marriage, the duke withdrew from active sports and increasingly dedicated himself to business activities, despite an unwritten rule in the Spanish royal family that its members should avoid corporate jobs.

It was exactly that rule that Cristina was following as she worked for years with the charitable La Caixa Foundation.

Urdangarin, meanwhile, did so well financially that the couple bought a small palace in their home city, Barcelona.

Prosecutors are now investigating the non-profit Noos Institute, which the duke headed between 2004 and 2006. He also worked for companies such as the telecommunications giant Telefonica.

Urdangarin and his business partner Diego Torres used the institute and the duke's prestige to organize events related to sports and tourism in the Balearic Islands, as well as in the eastern region of Valencia, investigators believe.

They overcharged for events, and even charged for services which were never carried out, channelling more than 1 million euros (1.35 million dollars) in public and private funds into their own companies, according to the accusations against them.

Torres is already an official suspect in the case. Eventually, it could reach Urdangarin and even Cristina, who was involved with the Noos Institute and with her husband's Aizoon real estate company, the daily El Mundo and others reported.

Why did the royal couple move with their children to the United States in 2009, Spaniards are wondering. Did they want to flee investigators, who were beginning to look into Urdangarin's activities?

The duke has now returned to Spain to defend his 'honour and innocence,' as he said in a brief communique.

The Zarzuela royal palace has declined to comment on the 'private' affair, only expressing its 'absolute respect' for legal decisions.

But Cristina - the seventh in line to the throne - is hardly seen in public, and King Juan Carlos is reportedly worried about the repercussions the affair could have.

The royal family is 'very affected,' the daily El Pais quoted the king's sister, Princess Pilar, as saying.

The Spanish royal family enjoys a widespread popularity, but it is largely based on Juan Carlos' success in thwarting a coup attempt in 1981.

Spanish royals need to earn their right to rule every day, the king has said, conscious that his country also has a strong republican tradition.

In recent years, anti-royal sentiment has grown, especially in the north-eastern region of Catalonia, where separatists see the royal family as a symbol of the central Spanish state.

Regionalist and republican far-left parties soon turned their attention to the Urdangarin case, with Catalan senator Jordi Guillot announcing that he would seek a rule banning royals from getting involved with companies.

They should have no other income than what the state budget reserves for them, he argues. Royals who are found guilty of crimes should be stripped of all their nobility titles, Guillot added.

The Valencia branch of the far-left party IU urged Urdangarin to return public funds the Noos Institute had received.

'Given that the state invests 8.9 million euros in the Spanish monarchy in 2011, our anger is even greater,' the party fumed.

If the duke is found guilty, 'let him pay for it like any other citizen, without any kinds of privileges,' IU national leader Cayo Lara said.