Spain royals freeze out duke over graft probe

Spain's royal palace on Monday froze King Juan Carlos' son-in-law out of its official activities over a corruption scandal that has caused a rare embarrassment for the monarchy, media reports said. Judges are investigating alleged corruption involving a company formerly run by Inaki Urdangarin, 43, the Duke of Palma de Mallorca -- the first major scandal ever to hit a member of the royal family. The duke's behaviour "does not seem exemplary" and he has agreed with the palace to be excluded from official royal activities, Spanish media quoted Rafael Spottorno, the head of the king's household, as saying. In a rare briefing by the palace's top civil official, Spottorno said the duke, who has not been charged nor admitted any wrongdoing, had the right to be presumed innocent. Urdangarin, a former Olympic handball player, on Saturday issued a statement saying he regretted the harm the scandal was doing to the royal family's image and insisted the palace had nothing to do with his private activities. His lawyer Mario Pascual Vives said the duke "is worried, saddened and rather indignant at what is coming out in the media," in comments on Monday to the Spanish news agency EFE, alluding to the leaking of details of the probe. The royal family traditionally maintains a discreet profile in Spain, where Juan Carlos is widely respected, credited with guiding the country to democracy after the death of the dictator Francisco Franco in 1975. The scandal has nevertheless caused indignation at a time when ordinary Spaniards are being squeezed by spending cuts and a lack of jobs, with an unemployment rate of 21.5 percent. The royal family had resisted commenting for weeks until Monday's high-level briefing to select Spanish media. Palace spokesmen were not available to give further details. Court documents seen by AFP last month showed that the company, Instituto Noos, is suspected of creaming off money from contracts paid by the regional government of the Balearic Islands where it is based. The investigation centres on a payment of 2.3 million euros ($3.2 million) to Institutods Noos for organising a tourism and sports conference in 2005 and 2006. Urdangarin was president of the company between 2004 and 2006. Public prosecutors suspect the company of siphoning off money paid by the region to firms run by Urdangarin and his successor Diego Torres, according to a search warrant for the premises of the firm, seen by AFP. Urdangarin married Princess Cristina, the youngest daughter of King Juan Carlos and Queen Sofia, in Barcelona in October 1997. The couple have four children and currently live in Washington, DC. He played for the Spanish national handball team in the 1992, 1996, and 2000 Summer Olympics, captaining the team in 2000. Public corruption has been a key target of outrage for the "indignants" protest movement that erupted after local elections in May. The palace on Monday will publish details of how it spends taxpayers' money on its website before the end of the year and is studying ways to cut its spending, Sottorno was quoted as saying by Spanish media. Its budget, allocated from public funds under the constitution, was 8.43 million euros ($11 million) this year, five percent less than in 2010, according to palace figures.