No fairy tale: Spain's princess faces court date

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PALMA DE MALLORCA, Spain (AP) — On a picture perfect spring day in 2009, Spain's Princess Cristina and her husband held a first communion celebration bash at their modernist Barcelona mansion with drinks and nibbles served from huge party tents on the sprawling grounds. The cost: 4,591 euros ($6,194).

Not surprising for European royalty, except for who picked up the tab: the Aizoon real estate and consulting firm that the youngest daughter of Spain's King Juan Carlos owned with her husband, Olympic handball medalist turned businessman Inaki Urdangarin.

The use, or possibly abuse, of company funds for personal pleasure is among evidence an investigating judge has compiled in a corruption case that has ensnared the royal couple. And on Saturday, Cristina will make an unprecedented royal appearance in court to answer questions from the judge who has called Aizoon in court paperwork a "front company" — and formally named her as a fraud and money laundering suspect.

The court date will be a spectacle viewed by millions of Spaniards on TV, even though the princess' grilling by the judge will happen behind closed doors with no media access inside. All eyes will be on whether Cristina does the "paseillo" — Spain's word for the matador's strut into the bullring, which is being used to describe the kind of "perp walk" she could perform for her arrival at the court in Palma de Mallorca, the biggest city in Spain's Balearic Islands.

The princess will either take about 50 paces down an alley under the scrutiny of onlookers — or be driven directly to the side entrance. Whatever the case, don't expect her to turn up in a limousine or a flashy Mercedes. Her husband arrived in a modest Opel minivan before heading into the two paseillos he's done so far, and similar transport can be expected for her.

Inside the courtroom, Cristina will sit in a high-backed chair directly facing a judge who has a picture of her father mounted on the wall behind him.

The way the princess' court appearance is handled could be key to how much more the mystique of an already discredited Spanish royal family may suffer.

The monarchy enjoyed huge esteem for decades because Juan Carlos played a strong role in Spain's transition from dictatorship to democracy. But now it is tarnished by a combination of the princess' legal woes and the king's own catastrophic decision to go on an expensive elephant hunting trip in 2012 — just as the nation teetered on the edge of financial chaos during Europe's debt crisis.

In Cristina's legal saga, Judge Jose Castro says in court records that many company expenses that appear personal in nature were never declared on the couple's income taxes, and that he must determine whether the amounts spent reach an annual value of more than 120,000 euros that could turn the non-reporting into a crime punishable by prison. If the amounts are less, the result would be a likely administrative tax investigation and possible fines.

In scores of pages of court paperwork filled with complex legal jargon, Castro sprinkles in details about the lavish life the couple enjoyed. He hones in on the household examples with bills for work or services at the mansion as possible illegal activity. Among the examples: A cocktail party the couple hosted for 81 friends to celebrate the birth of one of their four children; a bill for a salsa and merengue dance instructor who visited the mansion; dinnerware purchased for the home that cost 1,741 euros ($2,352).

But the judge also includes examples he says are probably not illegal, including hotel stays in Italy and Mozambique and restaurant meals where some food was ordered from children's menus. It's up to Castro to decide later whether she should be charged with crimes that carry maximum term of 11 years in prison.

The timing of his revelations couldn't be worse as Spaniards suffer from a prolonged economic slump and deteriorating trust in Spanish institutions including the monarchy.

The case is a direct offshoot of one led by the same judge in an investigation of Urdangarin for allegedly using his position as the Duke of Palma to embezzle public contracts via the Noos Institute, a supposedly nonprofit foundation he and a business partner set up that channeled money to other businesses, including Aizoon.

The deals they brokered included organizing seminars and sports events as a tourism lure. But some allegedly never took place or were billed at unusually high rates. The case is being heard in Palma de Mallorca because many deals were for the Balearic Islands.

Spain's royal family just wants the case that has now dragged on for years to end rapidly so the monarchy can try to rebuild the trust it once had, Spanish royalty watchers say. The royal cachet could rise if the economy improves and unemployment of 26 percent unexpectedly goes down dramatically. But for now, the situation looks bleak.

"The standing of the monarchy has never been so low in living memory and this is certainly the worst time to be answering questions about money laundering or not paying taxes," said Tom Burns Maranon, who has published three books about the Spanish monarchy.

The 48-year-old princess, a bank foundation director known for her love of skiing and sailing, has been cleared of involvement in Noos and her lawyer told reporters this week that she looks forward to proving her innocence in the Aizoon case.

"She's innocent, she says it and I believe it," said the lawyer, Jesus Maria Silva. "And as soon as she explains it, all of Spain will understand."

Fraud experts say her best defense against the accusations involving Aizoon, income taxes and money laundering is to answer the judge's questions while trying to build on previous testimony by her husband that she had little to do with the company.

"She needs to minimize as much as possible her knowledge about Aizoon and her participation with the company," said Ignacio Sanchez, a Madrid-based lawyer for Hogan Lovells International LLP who specializes in white collar crime and fraud. "It's normal to create a company where you create income, but personal costs are not needed for the company and they are not accepted as proper activity."

For ordinary Spaniards, the details of how Cristina and her husband paid for their lavish lifestyle are giving an edge to the mystery of whether she will face the heckles and jeers of the paseillo.

"The princess should do the paseillo to court to show that she's no better or worse than anyone else," said Fernando Rayon, who has written four books about Spain's royalty.

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Associated Press writers Harold Heckle and Jorge Sainz in Madrid contributed to this report.

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