Swiss Probe If Late Saudi King's $100 Million "Thank You" Gift Broke Law
A Swiss prosecutor is probing whether the late Saudi king broke any laws when he transferred $100 million to a fund controlled by fellow royal Juan Carlos I of Spain in 2008.
Last month, a hearing was held behind closed doors in Geneva
to discuss a legal opinion that prosecutor Yves Bertossa sought from scholars
on whether the payment by the late King Abdullah could constitute a crime under
Saudi law, according to documents seen by Bloomberg. Bertossa first solicited
the advice in a July 23 letter to the Swiss Institute of Comparative Law.
Bertossa's request for an opinion came just a month after
Spanish Supreme Court prosecutors announced they would investigate whether Juan
Carlos, who abdicated and lost his immunity from prosecution in 2014, could be
pursued for possible crimes linked to a high-speed train contract in Saudi
Arabia won by a Spanish-Saudi consortium.
Bertossa's scrutiny of King Abdullah, the half-brother of
the current king, could roil Switzerland's longstanding role as a preferred
destination for Saudi wealth. Middle Eastern investors had 432 billion Swiss
francs ($464 billion) stored in the country at the end of 2019, according to
the Swiss Bankers Association, nearly a fifth of the total. Saudis flock to
Geneva every July and August to avoid the fierce desert heat, staying in luxury
villas along Lake Geneva.
The Saudi government's Center for International
Communication didn't respond to emailed questions. The Saudi Ministry of
Finance, which transmitted the $100 million payment, declined to comment on the
reason. Bertossa's office declined to comment on his probe and the reported
links between the transfer and the rail contract.
In his letter, Bertossa said his probe had been focused on
"determining whether this alleged gift should be connected to a corruption
scheme." The letter didn't mention the rail contract.
Even "assuming the hypothesis that this payment was a
gift," he continued, it begged the question of whether there was
"disloyal mismanagement of public interests on the part of the former king
of Saudi Arabia."
Bertossa referred in his letter to an offense in the Swiss
Criminal Code that translates as "misconduct in public office" in the
official English-language version.
Madrid Thank-You
The payment was a thank you from King Abdullah for Juan
Carlos's help organizing a conference in Madrid on religious understanding,
according to a Saudi diplomat cited by Spanish newspaper El Pais. The paper
reported last year that Bertossa, in a separate letter to a Spanish judge, drew
a direct link between the contract and the Saudi payment, and said that the
winning bidders offered a discount of as much as 30%.
Qualifying for the multibillion-dollar contract had already
begun in 2008, the year of the Saudi payment. The two separate tenders for the
Phase 1 civil engineering works and the Phase 2 rail contract were then
finalized in 2008 and 2009, respectively. The consortium that won the Phase 2
contract in 2011 said in a statement it denies making any agreement or payment
related to the award of the project.
In international cases, Swiss prosecutors often prefer to
establish whether a comparable offense exists both in Switzerland and the
country in question before proceeding with a fresh line of inquiry.
According to the Swiss institute's December response, seen
by Bloomberg, misconduct in public office as defined in the Swiss Criminal Code
also exists in Saudi Arabia and would, in theory, be punishable under Saudi law
with a sentence of as much as 10 years and a fine of 20,000 riyals ($5,330).
But the written opinion didn't address the specifics of the case Bertossa is
investigating and so didn't discuss the prospect of immunity for a monarch --
living or dead.
The author of the opinion at the institute, a research
center attached to the Swiss Federal Department of Justice, declined to
comment.
Panama Foundation
The money at the center of the inquiry was paid into the
Panama-registered Lucum Foundation. The foundation, of which Juan Carlos was
the sole beneficiary, was established to receive the Saudi donation and was
dissolved around 2012. Juan Carlos left Spain for the United Arab Emirates last
year, according to the BBC.
His lawyer, Javier Sanchez-Junco, didn't respond to requests
for comment. The Swiss bank which received the payment and has been
investigated by Bertossa denies any wrongdoing.
Bertossa's inquiries come as Saudi Arabia's current heir to
the throne, Crown Prince Mohammed bin Salman, has declared fighting corruption
a key priority. In 2017, the prince turned Riyadh's Ritz-Carlton hotel into a
temporary jail during a controversial anti-corruption campaign that targeted
Saudi's elite. Most of the detainees were released after agreeing to hand over
billions of dollars in private settlements. Dissidents say the prince uses
corruption allegations selectively to undermine potential opponents and
critics, a charge officials deny.
King Abdullah reigned for nearly a decade until his death in
2015 at age 90, when he was replaced by King Salman, the crown prince's father.
Given that King Abdullah is no longer alive, Bertossa's next
steps in his investigation are unclear. As Geneva's top prosecutor, however, he
typically juggles other financial crimes and corruption cases at the same time.
Swiss Probe If Late Saudi King's $100 Million 'Thank You'
Gift Broke Law
A Swiss prosecutor is probing Saudi king's $100 million gift
to Juan Carlos I of Spain.
A Swiss prosecutor is probing whether the late Saudi king
broke any laws when he transferred $100 million to a fund controlled by fellow
royal Juan Carlos I of Spain in 2008.
Last month, a hearing was held behind closed doors in Geneva
to discuss a legal opinion that prosecutor Yves Bertossa sought from scholars
on whether the payment by the late King Abdullah could constitute a crime under
Saudi law, according to documents seen by Bloomberg. Bertossa first solicited
the advice in a July 23 letter to the Swiss Institute of Comparative Law.
Bertossa's request for an opinion came just a month after
Spanish Supreme Court prosecutors announced they would investigate whether Juan
Carlos, who abdicated and lost his immunity from prosecution in 2014, could be
pursued for possible crimes linked to a high-speed train contract in Saudi
Arabia won by a Spanish-Saudi consortium.
Bertossa's scrutiny of King Abdullah, the half-brother of
the current king, could roil Switzerland's longstanding role as a preferred
destination for Saudi wealth. Middle Eastern investors had 432 billion Swiss
francs ($464 billion) stored in the country at the end of 2019, according to
the Swiss Bankers Association, nearly a fifth of the total. Saudis flock to
Geneva every July and August to avoid the fierce desert heat, staying in luxury
villas along Lake Geneva.
The Saudi government's Center for International
Communication didn't respond to emailed questions. The Saudi Ministry of
Finance, which transmitted the $100 million payment, declined to comment on the
reason. Bertossa's office declined to comment on his probe and the reported
links between the transfer and the rail contract.
In his letter, Bertossa said his probe had been focused on
"determining whether this alleged gift should be connected to a corruption
scheme." The letter didn't mention the rail contract.
Even "assuming the hypothesis that this payment was a
gift," he continued, it begged the question of whether there was
"disloyal mismanagement of public interests on the part of the former king
of Saudi Arabia."
Bertossa referred in his letter to an offense in the Swiss
Criminal Code that translates as "misconduct in public office" in the
official English-language version.
Madrid Thank-You
The payment was a thank you from King Abdullah for Juan
Carlos's help organizing a conference in Madrid on religious understanding,
according to a Saudi diplomat cited by Spanish newspaper El Pais. The paper
reported last year that Bertossa, in a separate letter to a Spanish judge, drew
a direct link between the contract and the Saudi payment, and said that the
winning bidders offered a discount of as much as 30%.
Qualifying for the multibillion-dollar contract had already
begun in 2008, the year of the Saudi payment. The two separate tenders for the
Phase 1 civil engineering works and the Phase 2 rail contract were then finalized
in 2008 and 2009, respectively. The consortium that won the Phase 2 contract in
2011 said in a statement it denies making any agreement or payment related to
the award of the project.
In international cases, Swiss prosecutors often prefer to
establish whether a comparable offense exists both in Switzerland and the
country in question before proceeding with a fresh line of inquiry.
According to the Swiss institute's December response, seen
by Bloomberg, misconduct in public office as defined in the Swiss Criminal Code
also exists in Saudi Arabia and would, in theory, be punishable under Saudi law
with a sentence of as much as 10 years and a fine of 20,000 riyals ($5,330).
But the written opinion didn't address the specifics of the case Bertossa is
investigating and so didn't discuss the prospect of immunity for a monarch --
living or dead.
The author of the opinion at the institute, a research
center attached to the Swiss Federal Department of Justice, declined to
comment.
Panama Foundation
The money at the center of the inquiry was paid into the
Panama-registered Lucum Foundation. The foundation, of which Juan Carlos was
the sole beneficiary, was established to receive the Saudi donation and was
dissolved around 2012. Juan Carlos left Spain for the United Arab Emirates last
year, according to the BBC.
His lawyer, Javier Sanchez-Junco, didn't respond to requests
for comment. The Swiss bank which received the payment and has been investigated
by Bertossa denies any wrongdoing.
Bertossa's inquiries come as Saudi Arabia's current heir to
the throne, Crown Prince Mohammed bin Salman, has declared fighting corruption
a key priority. In 2017, the prince turned Riyadh's Ritz-Carlton hotel into a
temporary jail during a controversial anti-corruption campaign that targeted
Saudi's elite. Most of the detainees were released after agreeing to hand over
billions of dollars in private settlements. Dissidents say the prince uses
corruption allegations selectively to undermine potential opponents and
critics, a charge officials deny.
King Abdullah reigned for nearly a decade until his death in
2015 at age 90, when he was replaced by King Salman, the crown prince's father.
Given that King Abdullah is no longer alive, Bertossa's next
steps in his investigation are unclear. As Geneva's top prosecutor, however, he
typically juggles other financial crimes and corruption cases at the same time.
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In January, Bertossa secured a surprise conviction of Israel
mining tycoon Beny Steinmetz for bribery, in what was heralded as a landmark
decision for the prosecution of commodities-related corruption. Steinmetz
denies any wrongdoing and is appealing the verdict.
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