Prince Andrew charity broke law over £355,000 payment to former trustee

Watchdog investigated charitable trust after Duke of York’s Epstein TV interview

FILE - In this Monday, April 13, 2015 file photo, Britain's Prince Andrew visits the AkzoNobel Decorative Paints facility in Slough, England. Prince Andrew's effort to put the Jeffrey Epstein scandal behind him may have instead done him irreparable harm. While aides are trying to put the best face on his widely criticized interview with the BBC, royal watchers are asking whether he can survive the public relations disaster and remain a working member of the royal family. (David Parker/Pool Photo via AP, File)

The UK’s charity watchdog has found the Prince Andrew Charitable Trust broke the law over £355,000 (Dh1.5 million) in payments to a former trustee.

The Charity Commission was asked to investigate the trust after Prince Andrew’s television interview last year over his friendship with the late billionaire and convicted sex offender, Jeffrey Epstein.

The watchdog has announced that the organisation breached charity law over a series of payments to a former trustee.

The trustee was being paid by the charity’s three trading subsidiary companies as a director of them.

The trustee was an employee of the Duke of York’s household from April 2015 to January 2020 and undertook work for the trading subsidiaries.

The household was then reimbursed for a proportion of the employee’s time by the subsidiaries after the year end. These payments totalled £355,297.

Trustees cannot be paid to act as directors of a subsidiary company unless there is authority from the charity’s governing document or the payments are authorised by the commission or the courts, none of which was in place at the charity.

As a result, the money has been returned to the charity, which will redistribute it among its causes.

(FILES) In this file photo taken on September 07, 2019 Britain's Prince Andrew, Duke of York, attends a ceremony commemorating the 75th anniversary of the liberation of Bruges, in Bruges.  Queen Elizabeth II's second son, Prince Andrew, on June 8, 2020, denied failing to cooperate with the US Department of Justice (DoJ) in its investigation into the late sex offender Jeffrey Epstein. Claims he had offered "zero cooperation" in the case were untrue, his lawyers said, adding: "The Duke of York has on at least three occasions this year offered his assistance as a witness to the DoJ." / AFP / JOHN THYS

“Charity is special, with unpaid trusteeship a defining characteristic of the sector,” said Helen Earner, director of operations at the Charity Commission.

“By allowing the payment of a trustee via its subsidiaries the Prince Andrew Charitable Trust breached charity law.

"And by insufficiently managing the resulting conflict of interest from this payment, the trustees did not demonstrate the behaviour expected of them.

“We’re glad that concerns we identified are now resolved, after the charity acted quickly and efficiently to rectify these matters.

“The recovered funds will now go towards the causes intended and we will continue to work with the trustees as they wind up the charity.”

The Prince Andrew Charitable Trust supported his charitable work in education, entrepreneurship, science, technology and engineering.

“This issue came to light after the charity reported to the commission a potential reputational risk arising from significant media coverage of an interview with the Duke of York broadcast by the BBC in November 2019,” the commission said.

Businesses and institutions have since distanced themselves from Prince Andrew and he has stepped back from royal duties since the interview.

On Monday, through his lawyers, he hit back at claims he has not been co-operating with prosecutors in the US investigating Epstein.

He has faced mounting pressure to speak to the FBI over his relationship with Epstein and allegations that he slept with an underage girl.

US officials are investigating reports that Epstein, who was found dead in prison last year, trafficked women and girls around the world to be abused.

“The Duke of York has on at least three occasions this year offered his assistance as a witness to the Department of Justice,” said his lawyers, from Blackfords.

“Unfortunately, the DoJ has reacted to the first two offers by breaching their own confidentiality rules and claiming that the Duke has offered zero co-operation.

“In doing so, they are perhaps seeking publicity rather than accepting the assistance proffered.”

Geoffrey Berman, the prosecutor at the US Department of Justice leading the Epstein investigation, said on Monday his “door was open” if his offer to co-operate “was serious”.