How the Gulf Monarchies Made Ex-King Juan Carlos Rich

Living in exile in Abu Dhabi since August 2020 at the request of his son Felipe VI on account of corruption scandals attached to his name, the former king of Spain amassed a considerable fortune during his 39-year reign thanks to the Gulf rulers.

Abu Dhabi, 12 November 2010. Former King Juan Carlos (l.), Emirati Crown Prince Mohamed Ben Zayed (c.) and King Hamad Bin Isa Al-Khalifa of Bahrain (r.) in the Shams Tower, on the Yas Marina circuit.

“Only one non-Saudi, King Juan Carlos, has my father’s mobile phone number,” the Saudi crown prince, Mohammed bin Salman bin Abdelaziz (MBS) confided to a group of Spanish journalists to whom he gave an audience while visiting Madrid in April 2018. “And from time to time they ring one another.”

This remark made by the Crown Prince and Saudi strong man is indicative of the bonds that have been forged between former King of Spain Juan Carlos and all the Gulf Monarchies, not just Saudi Arabia. Witness the fact that dogged by corruption scandals, the former king decided on 3 August 2020 to find exile in the United Arab Emirates (UAE). Yet he had plenty of other options, from Portugal to the Dominican Republic.

His host there is the Crown Prince and regional strong man, Mohamed ben Zayed (MBZ) who posed with him for a photographer in mid-February, presumably to put a stop to rumours circulating in Spain about the former king’s poor health (he has just turned 83). “I’m fit as a fiddle, I do two hours of gymnastics every day,” Don Juan Carlos declared on that occasion to the Spanish weekly Hola.

At the beginning of his stay, he was lodged in a huge suite in the Emirates Palace, one of the world’s most luxurious hotels. Now he resides in a sumptuous villa on Zaya Nurai Island, less than an hour’s drive from the capital. Thus the former King adds his name to the list of other exiled dignitaries who have spent time in Abu Dhabi or Dubai, such as the Pakistanis Benazir Bhutto and Pervez Musharraf or, more recently, Anisa Makhlouf, mother of Syrian President Bachar Al-Assad and his daughter Bushra.

A Meeting with MBS

In the past, Mohamed bin Zayed has already been very nice to the King of Spain. In 2011 he made him a present of two Ferraris, each worth well over $400,000 and which Don Juan Carlos finally gave to the National Heritage Trust which sold them at auction for $529,000. He also invited the King every year in November to the Abu Dhabi Formula 1 Grand Prix, which the latter sometimes attended with his daughters.

It was in fact by the side of the Yas Marina racetrack in November 2018 that the Spanish Monarch shook hands and had a brief talk with Crown Prince Mohamed bin Salman just one month after the murder in Istanbul of the Saudi journalist Jamal Khashoggi, presumably ordered by him. The King thus became the first Western dignitary to have contributed to whitewashing the Prince’s public image. The Saudi Press Agency (SPA) lost no time circulating the photo of that encounter which was seen the world over.

The investigation carried out in Switzerland by the Geneva Prosecutor Yves Bertossa and the one undertaken later by the Spanish Supreme Court’s Prosecutor’s Office and, above all, the revelations in the Spanish and foreign press, particularly the London Telegraph, seem to indicate that Juan Carlos the 1st had amassed a huge fortune shortly before his rise to the throne in 1975. To a considerable extent, he had acquired these sums thanks to the generosity of the royal families of the Gulf and to the indulgence of the Spanish heads of government who, having got wind of his dealings, preferred to look the other way. Spain had a debt to him, they said, for having facilitated democratisation.

In 2014 the New York Times evaluated his wealth at 2.8 billion dollars, a figure lower than that of other European royal families, but staggering nonetheless when we know that when he was named in 1969 by General Francisco Franco (1892-1075) to be his successor as King, he was anything but rich. Before his appointment, he led a modest existence with his father, Juan de Borbón y Battenberg, in their Villa Giralda in Cascais (Portugal), which he left for long periods of study in Spain, especially at the Zaragossa military academy. Realising that the Spanish monarchy was a fragile institution, he may have sought to get rich so that if necessary he would not have to lead a drab existence in exile like his father and grandfather, King Alfonso XIII.

It was at the time of the oil-price shock in 1973 that Juan Carlos, who was then only an heir apparent, appointed by a dictator, had an opportunity to earn his first commissions. General Franco asked him to establish relations with Saudi Arabia to ensure a secure energy supply for Spain whilst he, Franco, was successfully knocking at the door of Saddam Hussein, the Iraqi dictator with whom he was on excellent terms.

The Saudi king’s “brother”

“Juan Carlos then sent an emissary to the Saudi crown prince Fahd bin Abdulaziz al-Saud who answered him immediately: ‘Tell my brother Prince Don Juan Carlos that we shall send him all the oil Spain will need’, the journalist Rebeca Quintans reports in her book Juan Carlos I: la biografia sin silencios, Editorial Akal, 2016). ‘In exchange for these good offices the Prince was paid a commission and no one had any objections,’ she adds. When democracy was finally established in Spain after 1978, Juan Carlos, who had become king four years earlier, went on collecting what amounted to an oil tithing.

And he received another present from Prince Fahd, the Fortuna, a sailing yacht in which the King of Spain plied the waters of the Balearic islands every summer for 21 years. Six months after his coronation, in June 2014, King Felipe VI tried to put a stop to this practice. He laid down a rule, phrased a bit vaguely, limiting the value of gifts the royal family were allowed to receive.

The dealings with Prince Fahd ben Abdulaziz al-Saud who ascended the throne in 1982, were not confined to oil alone. During a visit he paid to Madrid, Juan Carlos asked him for a credit of 100 million dollars, according to the book La Soledad del Rey (The King’s solitude) (Editorial La Esfer de los Libros, 2004) by the journalist José García-Abad. He immediately obtained a ten years, interest-free loan, but the author believes he did not pay it back in time or in full.

Chronologically, Prince Fahd was not the first Islamic ruler whom Juan Carlos asked for financial aid. In 1977, Shah Mohammad Reza Pahlavi of Iran got a letter from the King of Spain asking for ten million dollars in order to “shore up the Spanish monarchy” according to Asadollah Alam’s book, The Shah and I: The Confidential Diary of Iran’s Royal Court 1967-1977 (I.B. Tauris and Co. Ltd, London 1991). Alam, who was a minister at the Tehran court, claims that Juan Carlos got the amount he asked for.

José García-Abad and Rebeca Quintans—whose first book dates from 2000 and had trouble finding a publisher—are the only two journalists to have published unflattering biographies of Juan Carlos Ist before the myth of the exemplary King collapsed during his elephant-hunting safari in Botswana with his Mistress Corinna Larsen and one of his sons. This safari, meant to go unnoticed, was revealed because the monarch broke his hip and had to be flown back to Spain in a hurry.

The ill-fated safari

It was a Spaniard of Syrian origin, Mohamed Eyad Kayali who had invited the King and his suite, all expenses paid (nearly $60,000), on this trip to Botswana. At the time, he was known to be the agent in Spain of Crown Prince Salman (crowned king in 2015) and, until his death in 2019, managed, from his offices in Madrid, Casa Al Siyadh S.L., a Saudi real estate holding company. He also handled Salman’s and King Fahd’s sojourns at Mariella (in the South of Spain) at the end of the last century. Juan Carlos would interrupt his holidays every summer to pay them a visit.

King Fahd died in August 2005 - Juan Carlos asked the government to declare an official day of mourning - and his successor, King Abdallah ben Abdelaziz Al Saoud was no less generous with Juan Carlos Ist. In 2008 he ordered the Saudi Finance Minister to transfer 100 million dollars to a Swiss account, at the Banque Mirabaud, belonging to the Lucum Founndation, based in Panama and created that same year by the King of Spain.

The money was meant as a display of gratitude for the success of the Madrid Conference for Interfaith Dialogue inaugurated by King Abdallah in July of that same year, according to sources connected with the organisation of the event. No wonder then that Juan Carlos shed a few tears in public when, in January 2015, he made a private visit to Riyadh to offer his condolences to King Salman after Abdallah’s death earlier that month.

In 2012, Don Juan Carlos transferred 64.8 million dollars of the royal gift to Corinna Larsen “out of gratitude and love” his former mistress’ told the Geneva prosecutor Bertossa, who indicted her for money laundering. Also facing trial in this affair are Arturo Fasana, who manages the King’s fortune in Switzerland, and Dante Canónica, his attorney, but not Juan Carlos Ist.

Love may not have been the sole motive for this generosity. His German mistress was also his business partner in the Gulf. She was among the cohort of Spanish businessmen who accompanied Juan Carlos I on his official visits to certain countries in the region. In 2008 she was even received in Riyadh by Prince Al Walid bin Talal who at the time was the richest man in the Arab world. According to information posted on the Kingdom Holding Co.’s website, he invited Corinna Larsen to a business luncheon, as representative of the King of Spain.

The Bahrain Connection

In the course of his interrogation in Geneva, Arturo Fasana also admitted that in Switzerland, in 2010, the King of Spain had personally handed him a suitcase containing 1.9 million dollars, a present from the King of Bahrain, Hamad bin Isa al Khalifa, a sum which was immediately paid into the Lucum Foundation’s account. Since his abdication in June 2014, Juan Carlos has taken half a dozen private trips to Bahrain. And the Bahraini monarch went to Madrid in September 2019, merely to inquire about the state of health of Juan Carlos, convalescing after his seventh operation.

In Spain, the Public Prosecutor has issued no indictment but has launched several enquiries, including one dealing with commissions that Don Juan Carlos is alleged to have received after a consortium of Spanish companies was awarded the construction of a high-speed rail connection between Mecca and Medina. The King had gone to great pains with his Saudi friends to wrest from them this 8 billion dollar contract (which President Sarkozy had also coveted for France), but if he did earn any commissions, he could not be brought to justice, since the Spanish Constitution specifies that the Chief of State is “inviolable and assumes no liability”. He can therefore only be prosecuted for offences committed after his abdication in 2014. To avoid this, he paid the Spanish tax authorities nearly 6 million dollars, between December 2020 and February 2021.

While the present from the ruler of Bahrain was modest enough by comparison with those from the Saudis, the one Juan Carlos received from King Hussein of Jordan was frankly of little interest. In the nineteen seventies, the Hashemite monarch had built for himself a splendid seaside villa on the Canary island of Lanzarote where he never set foot. He gave it to the King of Spain in 1989 and the latter, in turn, gave it to the National Heritage Trust. The Spanish royal family have rarely used it, preferring to spend their Canary Island holidays in Mallorca. The person who spent the most time there—three weeks in 1992—was Mikail Gorbachev, former President of the USSR, with his wife Raïssa.

Juan Carlos established close relations with the Gulf Monarchies to get rich, of course, but also because they were so nice to him. Beyond the money, he made real friends among them, loved partying with the likes of Hussein of Jordan and others who were more restrained, like King Salman. The Kings, Sultans and their entourage were in turn delighted to be able to establish, for the first time, close relations with one of Europe’s royal families.

Felipe VI, who was crowned king in 2014, is at opposite poles from his father. His progenitor’s shady deals have always embarrassed him, all the more so as today they actually endanger the very existence of the monarchy. It was in order to safeguard the institution that a year ago he publicly renounced his inheritance and punished the former king by depriving him of his pension as former Chief of State.

“He has a rather Germanic turn of mind and it is hard for him to get along with the Oriental way of seeing things,” Josep Piqué, former Spanish Foreign Minister, remarked in a conversation with the author some ten years ago, describing the then heir apparent to the throne of Spain.