A former lover's taped conversations, murky financial dealings splashed across front pages, and a legacy in ruins.

The emergence of shocking allegations of corruption and money laundering against former Spanish King Juan Carlos have cast doubt over the very future of the monarchy, under his son King Felipe.

Juan Carlos seemed set to go down in history as the leader who skilfully guided Spain from dictatorship to democracy after the death of Gen Francisco Franco in 1975, but the 82 year-old's private financial activities have prompted two court inquiries in Switzerland and Spain.

Why Felipe has been ensnared

After Juan Carlos abdicated in response to rumours about his scandalous personal life in 2014, King Felipe sought to cut a contrastingly austere figure to that of his larger-than-life father, in a country where the monarchy does not enjoy high levels of support.

But Felipe's name has also been linked to the luxury lifestyle bankrolled by his father's offshore millions, prompting calls for reforms and greater accountability. The king is now under pressure to distance himself from his father. 

Following the royal money trail

In 2018 a Swiss prosecutor reacted to media rumours regarding Juan Carlos's obscure fortune and launched an investigation, questioning the ex-king's Swiss-based lawyer, financial adviser and other associates, including an ex-lover, Corinna zu Sayn-Wittgenstein.

Prosecutor Yves Bertossa's ongoing inquiry centres on a $100m (£80m) gift to Juan Carlos from the king of Saudi Arabia in 2008, and whether it was in connection with the awarding of a €6.7bn contract for a Spanish consortium to build a high-speed railway from Medina to Mecca three years later.

Mr Bertossa has discovered the existence of two offshore funds, connected to Swiss bank accounts.

One is the Panama-based

Lucum Foundation, set up to receive the $100m gift from the late King Abdullah, and which was liquidated in 2012, with almost the entire original amount donated to Ms zu Sayn-Wittgenstein, a German-born businesswoman.

Ms zu Sayn-Wittgenstein possesses a contract signed by Juan Carlos demonstrating that the donation was an "irrevocable gift" and not a money-laundering scheme, but also says she paid back money loaned to her from Lucum to buy a pair of apartments used by her and Juan Carlos in the Swiss resort of Villars.

The other fund is Fondation Zagatka, registered in Liechtenstein and whose primary beneficiary is Álvaro de Orleans. He is a distant cousin of the king who has been questioned by Mr Bertossa over why its account received multi-million payments from overseas business deals while shelling out more than €5m on private jet flights used by Juan Carlos.

Mr de Orleans claims he has helped the king out of a sense of "family honour" and that Zagatka's millions are all his own.

In June, prosecutors at Spain's Supreme Court announced the start of the first ever investigation into Juan Carlos in his own country, to establish whether the former king could be accused of any crimes related to the Saudi money. The former king remains immune from prosecution for any action committed before his 2014 abdication.

When did it start going wrong for Juan Carlos?

Hints and rumours of Juan Carlos's flamboyant lifestyle, alleged extramarital affairs and links to corrupt deal-making were frequent during his reign. But Spain's mainstream media and political establishment largely looked the other way, until an April 2012 accident befell the monarch while pursuing one of his passions: hunting.

He was not hunting boar or deer at home but elephants in Botswana, when unemployment in Spain had topped 24% in the worst recession since Juan Carlos had piloted the country to democracy.

Juan Carlos broke his hip, and when he had to be flown back to Spain the cover on his secret jaunt was blown.

The hunt mishap came shortly after a separate scandal that embroiled the king's son-in-law, Iñaki Urdangarin, in a fraud investigation that eventually saw him jailed in 2018.

A previously pliant media turned against Juan Carlos. Spaniards were soon informed that their king had been in Botswana with his lover, Ms zu Sayn-Wittgenstein, with the tab paid for by a Saudi magnate.

A series of health problems and persistent rumours regarding his personal life led to the decision to abdicate in favour of King Felipe in June 2014. But the worst was yet to come for the newly titled "emeritus king".

Bombshell revelations on tape

In 2018, online newspaper El Español published a series of articles based on taped conversations between Ms zu Sayn-Wittgenstein and José Villarejo, a former police investigator currently in jail. Unbeknown to Juan Carlos's ex-lover, Villarejo had a habit of recording his conversations with the rich and powerful.

Speaking to him in her London home in 2015, Ms zu Sayn-Wittgenstein describes what she alleges to be Juan Carlos's clumsy efforts to launder money. She mentions her surprise at suddenly being told she has been gifted a property worth €3m by the king of Morocco, before being asked to pass it over to the former Spanish monarch.

"They say 'she doesn't want to give things back'. But if I do, it's money laundering and I´ll go to jail," Ms zu Sayn-Wittgenstein can be heard saying on the tape. She then claimed that members of Spain's CNI intelligence service had organised a campaign of intimidation to pressure her into co-operating.

"The king has no concept of what is legal and what isn't," Ms zu Sayn-Wittgenstein said.

The tapes led directly to the opening of investigations in Geneva and at Spain's National Court. The Spanish inquiry has since been taken up by the Supreme Court as it is the only judicial institution permitted to probe the former king.

Further damage to the royals

While the wheels of justice turn slowly and may never lead to Juan Carlos being placed in the dock, the media floodgates have opened regarding the former monarch's lavish lifestyle.

Spanish newspaper El País, traditionally a staunch Juan Carlos supporter, revealed how he flew into Switzerland in 2010 to knock on the door of his wealth manager and hand him a briefcase containing $1.9m in cash he said was a gift from the ruler of Bahrain.

Perhaps most damaging for Spain's monarchy as an institution was the revelation in March that Felipe had been named as a hereditary beneficiary of the Lucum and Zagatka funds, leading the current king to announce that he rejected any economic inheritance Juan Carlos may have prepared for him.

In an unprecedented statement by Spain's Royal Household, it was also announced that Juan Carlos would no longer be granted his annual allowance of some €200,000 from the official state budget. Juan Carlos has not been seen in public since.

What might happen next?

The former king has no immunity in Switzerland, regardless of the date of any possible crimes, so it remains to be seen if Prosecutor Bertossa will lay accusations against him.

Regarding the Spanish Supreme Court inquiry, most experts believe the former king will avoid charges as most of the possible offences took place before his abdication.

Spain's Congress too has so far voted against a minority of left-wing and regional parties that wish to hold an investigative commission into the origin of Juan Carlos's offshore fortune.

But what of King Felipe's future in a country that polls suggest is split fairly evenly down the middle on remaining a monarchy?

Three days after the announcement that he was renouncing his father's wealth, King Felipe spoke on television to address Spaniards under lockdown due to the Covid-19 pandemic, making no mention of the scandals, as a noisy minority of citizens banged pots on balconies in protest at the royal family's behaviour.

What should Felipe do?

Over recent weeks, the Royal Household has refused to comment on any of the revelations concerning what it now refers to as Juan Carlos's "private life".

But reports of millions of euros being delivered to the royal family's Zarzuela residence by Juan Carlos and his hired assistants - and the emergence of a new tape in which Ms zu Sayn-Wittgenstein stated that the former king used his wealth to pay for all of his family expenses "in cash" - do little to help King Felipe distance himself from the sins of his father.

Some argue that Felipe needs to take greater steps towards a clean break with the past.

Prime Minister Pedro Sánchez recently admitted that the accusations levelled against Juan Carlos were "disturbing", and that he was in favour of reforming the constitutional concept of absolute immunity for Spain's head of state.

José Antonio Zarzalejos, a prominent supporter of Spain's monarchy and former editor of the royalist ABC newspaper, said King Felipe had to take further steps to secure his future on the throne, including the "physical removal" of Juan Carlos from Zarzuela palace.

"Felipe should give a full public explanation to Spanish society and he should also consider a public declaration of income, just as elected politicians do." BBC