“I trusted my husband,” Princess Cristina tells judge

King Juan Carlos’s youngest daughter evades most questions in tax evasion and money-laundering inquiry

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During two-and-a-half hours of testimony, Princess Cristina on Saturday declined to answer most of the questions by an investigative judge in Palma de Mallorca concerning her expenses and income she received from a real estate business she set up with her husband, Iñaki Urdangarin.

Judge José Castro specifically asked the princess about her husband’s financial affairs and her role at the defunct Nóos Institute, which is the subject of an ongoing inquiry into an alleged scheme to divert public funds paid out by two regional governments for sports and tourism events.

Although the question-and-answer session was held behind closed doors, lawyers who were inside the courtroom told reporters during a break in the proceedings that Cristina had avoided most of the judge’s questions by responding: “I don’t know” and “I have no knowledge about that.”

She also told Judge Castro that she wasn’t privy to the day-to-day operations at Urdangarin’s Nóos Institute, even though she served on the board of directors, or at the Aizoon real estate firm, which she co-owned with her husband. “I trusted my husband,” the princess said, referring to decisions made in both enterprises.

King Juan Carlos’s youngest daughter is the target of a tax-evasion and money-laundering inquiry stemming from an investigation into Urdangarin’s business dealings. Cristina has denied any wrongdoing.

At around 1pm (CET), the judge ordered a recess before continuing his round of questioning. Lawyers for two organizations, including the obscure right-wing Manos Limpias union, which brought two separate private prosecutions against the princess, are expected to question Cristina later in the day.

Sources from Spain’s Royal Household have said they are confident that after hearing her testimony, Judge Castro will remove from the princess the status of official target in the investigation. It is the first time a direct member of the royal family has been subpoenaed by a judge in a criminal inquiry. Coinciding with other major corruption scandals affecting Spain´s political parties, big business and the labor union movement, the Nóos case has caused serious damage to the royal family´s prestige.

Earlier, a smiling Cristina arrived at the Palma de Mallorca courthouse for her testimony. She nodded and acknowledged a barrage of photographers kept behind a rail by police as she stepped out from the back seat of a dark Ford sedan that brought her to the back entrance of the courthouse.

“Good morning,” Cristina told the waiting journalists. She made no other statements. Wearing a black jacket and blue pants, the princess shook hands with one of her lawyers before disappearing inside. Cristina arrived at about 15 minutes before for her 10am (CET) scheduled appearance before Judge José Castro, who has been carrying out the Nóos inquiry for more than two years. Except for her purse, Cristina carried no documents or files.

“She is very calm,” Jesús Silva, one of her lawyers, told journalists shortly before his client arrived. Around 200 protesters yelling insults and carrying Republican flags and signs calling for the abolishment of the monarchy, were kept at bay by police. But their taunts could be heard as the princess stepped inside the courthouse.

As opposed to her husband, Iñaki Urdangarin, who was called to testify before the same judge in 2012, Cristina was allowed to drive up to the back entrance of the courthouse and avoid the so-called “walk of shame” -- a long pedestrian stretch between the building’s doorway and the spot where vehicle access ends.

Cristina, 48, was first subpoenaed by Judge Castro last April after Urdangarin’s partner Diego Torres turned over a batch of emails suggesting that princess was privy to her husband’s business activities. The basis of Torres’ strategy was to try to try to convince the judge that the princess should also be targeted in the investigation as his own wife, Ana María Tejeiro, had been at the beginning of the inquiry.

From the outset, anticorruption prosecutors rejected calling the king’s daughter in for questioning, which put them in direct conflict with the judge as the inquiry continued. A provincial court in Mallorca overruled Castro but gave him the go-ahead to continue sifting through the couple’s tax records, which opened a new door for the judge to subpoena the infant for a second time.

Urdangarin created the Nóos Institute in 1999 with his partner Torres, who had been one of his teachers at Madrid’s ESADE business school. The non-profit entity was set up as a consulting group and began organizing sporting events and tourism conferences for the Balearic Islands and Valencia regional governments after no-bid contracts had been won.

Princess Cristina served for a time as a spokeswoman on the Nóos board. But Urdangarin testified in August 2012 that she never made any decisions and that her presence was merely as a figurehead to help round off the total number of members needed to make up the company’s directorship.

At the same time as he was running Nóos, Urdangarin also set up several for-profit businesses, including Aizoon, which prosecutors believe was one of the destinations to which Nóos income was diverted. Aizoon, nominally a real estate firm, was jointly owned by the couple.

Since Castro began looking at Cristina’s personal income tax statements, he found that she had charged a number of personal events, such as baptism receptions and birthday parties, to the Aizoon account. Her tax statements purportedly show that she didn’t report all the income she may have received from Aizoon. Cristina, through her lawyers, has previously denied all the accusations which Judge Castro preliminarily filed against her.

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