When a New York court announced a multi-million pound settlement between Andrew Mountbatten-Windsor and Virginia Giuffre in 2022, it came with the hope among senior royals that it would draw a line under the House of Windsor’s exposure to the Jeffrey Epstein scandal.
Thrashed out over a 10-day period between the ex-Duke of York’s lawyers and representatives of Giuffre, the out-of-court deal ended her civil case alleging she had been forced to have sex with Andrew at the age of 17.
In return, a figure widely understood to exceed £12m was handed over by Andrew using funds provided by his family as his mother, Queen Elizabeth II, prepared to celebrate an unprecedented Platinum Jubilee.
As one former royal aide put it: “There was a desire for the court case not to be hanging over the jubilee celebrations. Rightly or wrongly, there was an expectation it would cauterise the wound caused by Andrew’s association with Epstein.”
Andrew’s out-of-court settlement haunting royals
Instead, the deal – announced to the world four years ago this month – is returning to haunt the Royal Family as questions are raised about how the settlement was funded and what was known to “The Firm” about links between Andrew and Epstein.
It is a relationship that barely a week ago saw Mountbatten-Windsor arrested on his 66th birthday on suspicion of misconduct in a public office related to claims that he passed confidential documents to Epstein during his decade as an official trade envoy.
Mountbatten-Windsor was released under investigation last week (Photo: Phil Noble/Reuters)Labour MPs this week told The i Paper there needs to be an investigation into the source of the funds and what was known within the Royal Family.
Richard Burgon, a former shadow Lord Chancellor, said a “full independent review” is needed, adding: “This is not just about Andrew’s conduct, it is about the funding of the settlement, institutional knowledge of that settlement, and responsibility within the Royal Household.”
Calling for a review of how Andrew’s activities had been funded, Rachael Maskell, the MP for York Central, said: “[It] should come under close scrutiny to understand whether any public funding was involved in anything beyond his travel and expenses… in his role as special trade envoy. This must clarify if public funds were involved in the settlement he made to Ms Giuffre.”
A running sore
The details remain highly opaque of the legal and financial bargain struck with Giuffre, a teenage victim of Epstein who died by suicide last year.
Andrew, who insisted that he had never had “any form of sexual contact or relationship” with Giuffre, made no admission of liability in the out-of-court settlement and has always denied any wrongdoing in connection with Epstein.
Sources told The i Paper this week the settlement is in danger of becoming a “running sore” for the Royal Family as it represents their most significant known interaction in the Epstein scandal.
Queen Elizabeth II at Buckingham Palace in 2013 with the now King Charles and Andrew Mountbatten-Windsor (Photo: Carl Court / AFP via Getty Images)It is thought the funds paid to Giuffre came from at least three sources within the Royals’ sprawling finances after it became clear that Mountbatten-Windsor, whose known sources of income were his £20,000 annual Royal Navy pension and a £250,000 stipend from the Queen, could not provide the funds himself.
The Queen, who is known to have had a particular soft spot for her second son, is said to have contributed a “loan” to Andrew worth about £7m, while a further £3m is thought to have been sourced from the estate of the late Duke of Edinburgh, who had died some 10 months earlier.
A further £1.5m was reportedly sourced from other members of the Royal Family – it is unknown which members contributed. In an unusual move, Buckingham Palace earlier this month responded to reports suggesting King Charles had been the source of the £1.5m by stating he had not contributed.
A second former Palace insider said: “Even before the Queen’s death, it was recognised that it would be prudent to put a distance between Andrew and the other members of the family. He lost his HRH [title], he stopped being a working royal and he had to engage his own lawyers to fight the Giuffre case.
“But to a greater or lesser extent, he was also reliant on those with the funds – in particular Her Majesty – to settle the case. It was an impossible choice.”
Questions over charity donation
An enduring example of the way in which the settlement appears to have overlapped between Mountbatten-Windsor and his family lies in an agreement for the ex-prince to make a significant donation to Speak Out, Act, Reclaim (SOAR) – a US-based charity set up by Giuffre to help victims of sex abuse and trafficking.
The court statement outlining the settlement said: “Prince Andrew intends to make a substantial donation to Ms. Giuffre’s charity… He pledges to demonstrate his regret for his association with Epstein by supporting the fight against the evils of sex trafficking, and by supporting its victims.”
The donation of about £2m was reportedly made from funds provided by the Queen. But four years later, the status of SOAR as an active charity is unclear and its royal monies appear to be in a state of limbo.
Virginia Giuffre with a photo of herself as a teenager. She died last year. (Photo: Emily Michot/Miami Herald/Tribune News Service via Getty Images)Searches of the official register of non-profit organisations kept by the Internal Revenue Service (IRS), the arm of the US government to which grants tax-exempt status for charities, did not locate an organisation matching SOAR’s title or details.
On its website, SOAR said it was the successor organisation to Victims Refuse Silence, a previous charity set up by Giuffre in 2015, which has made no official filings since 2019. According to IRS records, Victims Refuse Silence had its non-profit status revoked in 2023 and the charity appears to have been wound down.
Representatives of SOAR did not respond to The i Paper on the status of the royal donation.
According to reports, the funds provided to SOAR as part of the 2022 settlement with Andrew are currently being held in a so-called escrow account – in which monies remain under the control of a third party until a specified condition or conditions have been met. Buckingham Palace did not respond to a request to clarify the status of the donation.
Were public funds used?
Hanging over the saga of the settlement is an array of potentially uncomfortable questions about which pots of royal money were dipped into to fund it.
In 2022, the Treasury responded to concerns over taxpayers’ money by saying: “No public money has been used to pay legal or settlement fees.”
While the use of the Sovereign Grant, the sum paid to the Royal Family from public funds to carry out its duties and maintain palaces, can seemingly be ruled out on this basis, it is unclear what other royal revenue streams were used.
One possibility is that Queen Elizabeth sourced monies for the settlement, including the SOAR donation, from the Duchy of Lancaster, the portfolio of land and holdings first ceded to the monarch in 1399.
The surplus from the duchy provides an annual income for the Sovereign to use at their own discretion, including meeting the expenses of other royals and the upkeep of the Windsors’ private estates, such as Balmoral. This so-called Privy Purse income, upon which the monarch voluntarily pays income tax, stood at £24m in 2022.
Andrew on the balcony of Buckingham Palace with the late Queen in 2018 (Photo: Max Mumby/Indigo/Getty Images)While the Duchy of Lancaster provides annual accounts, it does not detail all spending. Critics argue this leaves the door open to questions about whether the Privy Purse was used to put an end to potentially embarrassing legal proceedings.
Critics of the royal funding system have long criticised the classification of the Duchy of Lancaster and the Duchy of Cornwall, a separate portfolio of land and investments used to pay for the activities of the Prince of Wales, as “private”.
Burgon said: “Reassurances are needed that public funds weren’t used, indirectly or directly, to fund this settlement.”
It remains possible that other royal funds were used. The monarch has their own entirely private income derived from what a recent Parliamentary briefing on royal finances described as a “personal investment portfolio”.
According to the Sunday Times Rich List, the late Queen’s personal wealth stood at £340m – a sum likely to have been passed on to King Charles, although Palace sources claim the monarch’s wealth “has always been vastly exaggerated”.
The Palace did not respond to a request to comment on how Andrew’s settlement with Giuffre was funded, including whether Duchy of Lancaster income was used.
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It was reported earlier this month that Andrew has yet to pay back any of the funds used to settle the court case after a plan to use the proceeds from the sale of an £18m luxury Swiss ski chalet, bought in 2014, failed to generate significant profits.
The former royal aide said: “Money is a sensitive subject in any family. Whatever funds were made available [for the Giuffre settlement] would have been a matter of careful consideration. The difficult question which now arises is whether that consideration was careful enough.”
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