In what is sure to be a long and winding road, the former king of Spain, Juan Carlos, has gone into exile for what appears to be concern over eventual prosecution for tax crimes.
Beloved by much of the population of Spain for guiding his country out of fascism in the 1970’s, Juan Carlos stumbled in later years over a series of personal and financial mishaps that may lead to criminal tax charges. Now 82, the former king left his country in early August of this year. Sightings of the beleaguered ex-King have been reported in Abu Dhabi, Portugal, and the Dominican Republic. His wife, Queen Sofia, has not followed him into exile.
Both personal and professional difficulties account for the disappearance of Mr. Carlos and the investigation by Spanish and Swiss authorities of alleged tax evasion and money laundering.
The concerns for tax evasion center on two offshore tax organizations, one set up in Liechtenstein and the other registered in Panama. While Juan Carlos has not yet been charged or questioned, those surrounding him have—including Corinna zu Sayn-Wittgenstein, a Danish entrepreneur and longtime companion of Mr. Carlos.
The tangled tax web deepened on the exposure of the affair between Ms. Sayn-Wittgenstein and Mr. Carlos, on an elephant-hunting expedition in 2014 when the then-monarch broke his hip. The trip was funded by an advisor to the Saudi royal family. Both the advisor, Mohammed Eyad Kayali, and Ms. Sayn-Wittgenstein found some notoriety in the Panama Papers as principals of multiple opaque offshore tax entities.
In 2008, the Saudi government transferred $100 million to the Panamanian offshore tax foundation which secreted it in a Swiss bank account—spurring the current investigation into the personal fortunes of Juan Carlos. The gift of the big-game foray in 2014 is thought to have been related to a $9.9 billion transportation infrastructure project in Saudi Arabia that was then awarded to a Spanish company.
The current King of Spain, Felipe VI, is the son of Juan Carlos. Attempting to distance the royal household from the pending tax inquiry, King Felipe renounced his inheritance from his father in March of this year and eliminated a stipend paid to Juan Carlos.
Clearly this unfortunate mess has personal, political, and economic ramifications for all involved. In a departing letter to his son, parts of which were made public, Mr. Carlos wrote he left due to “public repercussions certain episodes of my past private life are generating.” Political opponents claim the ex-King, at a minimum, took flight to avoid prosecution.
A king, an ex-king, a country, and a large offshore tax problem. More of this story is sure to come.
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