Monaco, long regarded for its opulence and the reigning Grimaldi dynasty, finds itself embroiled in a financial scandal as allegations surface about part of the royal family’s fortune being stashed in tax havens.
The claims, made by a former close confidant, Claude Palmero, have sent shockwaves through the affluent city-state, adding to the challenges facing the palace under the rule of Prince Albert II.
The controversy erupted after French newspaper Le Monde published detailed notes allegedly made by Palmero, who managed the palace’s assets for over two decades, first under Rainier III and then Prince Albert II. These notes suggest that certain royal funds were placed offshore in tax havens such as Panama and the British Virgin Islands.
Jean-Michel Darrois, Prince Albert’s lawyer, acknowledged the creation of offshore companies during Rainier III’s reign but emphasized that efforts were made to resolve the situation. The wealth manager’s replacement has been actively liquidating these holdings. However, offshore companies established in the British Virgin Islands in 2002 faced complications due to unpaid fees, hindering the royal family’s ability to claim them.
Palmero’s lawyer, Marie-Alix Canu-Bernard, asserted that all actions taken by the asset manager were done with the knowledge and consent of the royal family, always in their best interest. The motive behind placing funds offshore in a tax-friendly Monaco remains unclear, but speculation suggests it may have aimed to shield their financial affairs from scrutiny.
Monaco, the world’s second-smallest country, has long attracted celebrities and the wealthy with its lack of income or wealth tax and sunny climate. The recent real estate boom in the tiny state, where property sells for astronomical sums, adds another layer of complexity to the unfolding scandal.
Claude Palmero, previously implicated in property development schemes, has faced accusations related to his role in overseeing allowances for members of the royal household. Since his dismissal, he has pursued legal action against the royal family, filing a complaint with the European Court of Human Rights in Strasbourg. The court will now consider allegations of unfair treatment in Monaco.
The controversy coincides with the Council of Europe’s warning to Monaco regarding anti-money laundering efforts. Responding to these concerns, Monaco announced the establishment of a new Monegasque Authority for Financial Security to combat money laundering and corruption. The unfolding scandal raises questions about the financial transparency of the iconic principality and the ongoing challenges facing its royal family.