The Saudis, King Juan Carlos I and a shady railroad deal

The oil-rich Saudi royal family has been implicated in making illicit payments of millions of dollars to Juan Carlos, a powerful European monarch who is celebrated for the influential role he played in Spain’s political direction post the Franco era.

The country’s top prosecutor indicated on Monday that it will investigate the former Spanish king for alleged payments to him by the Saudi family.

There are raised eyebrows and many questions being asked about a $100 million payment that Juan Carlos allegedly received from Saudi Arabia’s late King Abdullah in 2008. This would be just a handful of years before a lucrative contract was won by a Spanish consortium to build a high-speed rail line between Mecca and Medina, the two holiest cities for Muslims. 

The Spanish king, 84, abdicated the throne in 2014 - a first in the modern history of the country - but he is known for much more. Juan Carlos was also instrumental in transitioning the country from Francisco Franco’s fascist order to democracy. 

If these fresh allegations are proven to be true, they could further damage the celebrated peacemaker, who critically prevented a military coup in 1981. They will, however, also affect the House of Saud. Its most recent controversies range from the Jamal Khashoggi killing, to the contentious detentions of high-profile figures and the arrests of activists.

Even more problematic for millions of Muslims across the world, who often travel between Mecca and Medina during their pilgrimages, is how the 450 km-long railroad might have been built and whether illegitimate money has funded it. The line will serve more than 160,000 pilgrims a day, according to estimates. 

While Spain faced international political isolation under the fascist dictatorship of Francisco Franco, the Spanish royal family has long held strong relations with the Gulf monarchies and other Arab kingdoms like Morocco and Jordan, according to Alfons Lopez Tena, a former member of the Spanish Judicial Council and a political analyst. 

“[Former] King Juan Carlos kept those relations including personal ties with rulers of Arab kingdoms from Morocco to the Gulf and Jordan. It has always been a matter of gossip in Madrid that he monetises his connections,” Tena told TRT World. 

Juan Carlos, who had ruled as a monarch for nearly four decades, visited the Saudi Kingdom several times as a king. 

“He used these connections to get contracts for Spanish companies in Saudi Arabia and other Gulf countries. But he also [allegedly] took kickbacks from both those countries and Spanish companies as well,” Tena said. 

But a ruling king has no responsibility for his actions according to the Spanish constitution, which effectively prevents any charges, prosecution and investigation against him on the grounds that he is the head of the state. 

The current investigation announced by the Supreme Court prosecutor can only probe the former king’s actions after 2014, when he effectively abdicated the throne. 

“It’s going to be a very complicated investigation,” Tena said of the probe. 

All the King’s men, and a woman

Until now, two people close to the former king, Inaki Urdangarin, son-in-law of Juan Carlos, and Manuel Prado y Colon de Carvajal, the former monarch’s personal financial advisor, have been prosecuted and successfully charged over corruption accusations, which also implicated Juan Carlos by various investigations. 

“But the investigations were stopped when it reached the king’s doings because he constitutionally had no responsibility. The former king’s daughter was also spared on corruption charges, but her husband [Urdangarin] was condemned and jailed,” Tena recounted. 

The Saudi kickback plot also contains a romantic affair involving Juan Carlos and a German philanthropist, Corinna zu Sayn-Wittgenstein.

“She lived inside the palace compound in Madrid. The former king was estranged from his wife, Queen Sofia, who continues to live in London for a long time,” said Tena.

Juan Carlos’s reputation was bruised after his relationship with the “intimate friend” — as the Spanish press call her — became public following an elephant-hunting trip in Botswana in 2012, which left the former monarch with an injury. 

Since then, a cold war between Sayn-Wittgenstein and the royal family has raged. At the heart of the friction, is the deliberate circulation of crucial information regarding some of the king’s allegedly illicit finance operations. His former lover is accused of being behind this.

“She began blackmailing the royal house saying that ‘I want money if you want to keep a lot of things I know secret’. She also demanded protection,” adds Tena.

Sayn-Wittgenstein has also threatened to share information regarding transactions in her bank account in Switzerland with Swiss prosecutors, this allegation according to Tena. 

She claims that the former king received $100 million (£80m; €88m) from the Saudi monarchy as a gift in 2008. After launching a recent investigation into the matter, a Swiss prosecutor has concurred that one of the Swiss bank accounts relating to Juan Carlos received $100 million in 2008. 

Four years later, according to the Geneva-based prosecutor, when the lovers’ hunting trip became public, €65 million (£57m; $73m) of it was given to Sayn-Wittgenstein.  

She again maintains that the €65 million was also a gift, not a bribe or anything like the $100 million given to Juan Carlos by the late King Abdullah of Saudi Arabia. 

Now, Swiss legal authorities are investigating a possible link between the $7.97 billion-valued railroad contract, which was awarded to a Spanish-led consortium in 2011 by Riyadh, and the origin of the $100 million Juan Carlos received from the late King Abdullah.  

Jose Manuel Villarejo, a former police officer, who has been accused of various crimes from extortion to slander, leaked a set of recordings in which Sayn-Wittgenstein appeared to suggest that Juan Carlos received the money from Saudis for his brokering efforts of the high-speed railroad deal between Spanish companies and Riyadh. 

Tena argues that one of the reasons Juan Carlos might have received the money from the Saudis could be for sales of weapons to Riyadh. The Saudis are one of Madrid’s top clients for buying arms. 

Father-son split

A number of controversies have taken their toll on the Spanish royal family. They are said to have led to Juan Carlos’s abdication and the former king’s eventual estrangement from the palace, where his son, Felipe VI, has resided as king since 2014. 

In March, tensions escalated again when Sayn-Wittgenstein freshly accused Spanish intelligence services of harassment. This ultimately led to a strong statement from the palace. 

King Felipe has since rejected any financial legacy from his father which included “any asset, investment or financial structure whose origin, characteristics and purpose might not be consonant with the law or with the criteria of rectitude and integrity.” 

The Spanish king further punished his father by ending his annual, state-funded stipend. 

“When the former lover of Juan Carlos tried to blackmail him [King Felipe], he quickly cut any relation and said publicly that he had nothing to do with any wrongdoings related to his father. He is also cutting all ties with other family members, who have been implicated with corruption accusations,” says Tena.

Critics and supporters of the former king are yet to hear anything from Juan Carlos, who has chosen to remain tight-lipped in the light of these allegations and circumstances.

“He is totally silent. He has always been silent on this matter. But he also keeps silent on everything,” Tena adds.

“He is out of public life and is not living in Spain anymore.”