TUCKED ONE STREET behind
Monte Carlo’s historic harbor, which is famously dotted with champagne
bars and anchored by the storied casino that was the backdrop to
multiple James Bond films, the Monaco police station may be the most
unglamorous building in one of the world’s most glamorous settings.
Gray
and boxy, it looks more like student housing on a university campus
than a bulwark of security for the global elite who flock here as much
for its aura of protective secrecy as its shimmering scenery.
But
over two days this February, in the police captain’s office with a
window facing up the rocky slope toward the palace, a dapper 68-year-old
suspect in a corruption scandal rattled one of Europe’s most storied
royal families and shook the foundations of a tiny country built on
polished appearances, ironclad confidentiality and tightly choreographed
power.
The
suspect, Claude Palmero, has salt-and-pepper hair and wears wire-rim
glasses. If he looks like an accountant, it’s because he is, and he now
finds himself at the center of the alleged corruption scandal.
For
much of his adult life, Palmero was the financial gatekeeper for Prince
Albert II, Monaco’s ruler for the past two decades and the son of
Prince Rainier III and Princess Grace, the Oscar-winning actress
formerly known as Grace Kelly.
A
devoted sportsman, environmentalist and philanthropist, 67-year-old
Albert has a fortune that has been conservatively estimated at more than
1 billion euros, and by all accounts he historically paid little
attention to how it was managed. Instead, he entrusted it to Palmero as
his administrateur des biens.
That role, which Palmero inherited from his father, empowered him to
manage Albert’s private fortune, including by orchestrating quiet cash
transfers when requested by the prince or others in the royal family.
Palmero
oversaw not only Prince Albert’s private fortune but also assets held
by the Crown, from prime real estate to a vast array of
collections—including cars, stamps, coins and artworks, as well as
financial holdings.
But
the relationship turned sour in 2023, after a leak of hacked documents
implicated Palmero in a number of alleged corruption and
influence-peddling schemes. In a casual text message that belied the
chaos that was to come, Albert in May of 2023 wrote to his longtime
money manager: “I am now more or less obliged to speak out…to ‘blow the
whistle’ a little bit to signal the end of recess and try to reassure
many people here at home.” He fired Palmero weeks later.
Albert
also initiated a broader shake-up at the top of the principality.
Dozens of insiders left their posts, including some of Monaco’s most
influential power brokers.
The
move kicked off a wave of recriminations and more damaging leaks,
including from notebooks Palmero meticulously kept about the prince’s
private activities.
French
newspapers ran some contents of the notebooks, highlighting Albert’s
financial support for his children born out of wedlock and their
mothers, as well as the spending of his wife—Princess Charlene, a former
Olympic swimmer—and other members of the royal family. (Monaco is a
principality, not a kingdom, though the public widely refers to its
ruling dynasty as a royal family.)
In
September 2023, Albert ratcheted up the feud further by filing a
lawsuit—along with his sisters—against Palmero, accusing him of breach
of trust and theft. The charges were later expanded to include forgery,
use of forged documents and money laundering. According to people close
to the prince, it was the first time in over 700 years of the Grimaldi
dynasty that a ruler filed a criminal complaint against a Monaco
resident.
The
February interrogations at the police station, spanning two full days,
were part of the continuing investigation that is discreetly winding its
way through Monaco’s courts.
Palmero
has been questioned about Panamanian holding companies, Swiss bank
accounts and secret payments made to keep the prince’s private life
exactly that—private. During questioning, he was not even allowed to use
the bathroom without a guard escort.
Palmero
has denied the allegations. Prosecutors have interviewed him on
multiple occasions but have not brought any charges. Palmero’s defense
can be boiled down to this: All of his activity was designed with the
best interests of the prince in mind, including cleaning up the messes
made by Albert and other members of the royal family, who paid little
attention to their finances and spending.
In February, for example, Palmero was asked about a roughly $15.9 million transfer he made to a company called Étoile de Mer.
Palmero
referred the officer to a letter addressed to the prince’s legal team,
explaining that the funds had ultimately ended up with a company used to
cover expenses tied to Nicole Coste, the former Air France flight
attendant and onetime lover of Prince Albert, as well as their son,
Alexandre.
The
prince “wished for the utmost confidentiality so that this situation
would not become known to his wife,” the letter read, according to
documents viewed by WSJ. Magazine.
Police
investigators also questioned Palmero about a $795,000 transfer flagged
by auditors as “suspect.” He described it as reimbursement for years of
unlogged spending on behalf of the prince himself, kept private “for
reasons of confidentiality” and his own sense of duty and discretion.
Among
the outlays Palmero claimed to have quietly absorbed: rent for the
prince’s Monaco bachelor pad, the salaries and housing arrangements for
Coste’s staff and assorted costs tied to Princess Charlene’s private
Monaco apartment, which he said were deliberately kept off the books to
avoid leaving evidence that she sometimes stayed outside the palace.
The
commingling of funds was further complicated by Palmero’s practice of
investing alongside the royal family, which he said he could do because
he has a personal fortune of more than $113.5 million, much of which
came from an inheritance.
In
one instance, police pressed Palmero on why some $185 million—mostly in
private-equity funds—was held in a company called Janus, which was
owned by Palmero.
“Janus is a two-headed god,” Palmero told police, implying that this was no coincidence. “There were two people involved.”
At
times, Palmero got exasperated by the questioning, saying of his former
boss: “He now pretends that for 22 years he knew nothing about the
state or management conditions of his own assets? He is the sovereign of
a state! So either he is lying to serve his own interests, or he should
step down—because someone like that should not be allowed to manage
anything! It’s utterly ridiculous!”
Some
of the prince’s allies agree with at least part of that assessment,
suggesting the prince placed too much trust in familiar faces.
Surrounded by old friends and advisers who echoed each other’s views, he
saw little cause for doubt. The scandal, they say, jolted him into
seeing things differently.
Prince
Albert took the throne 20 years ago this July, promising to usher in a
new era in which Monaco would stand for something more than immense
wealth for its own sake. But the scandal is merely reinforcing to many
outsiders the famous Monaco descriptor from Somerset Maugham: “a sunny
place for shady people.”
IN A STATEMENT TO WSJ. MAGAZINE,
Jean-Michel Darrois, Prince Albert’s lawyer, said the prince would not
comment on the specifics of the scandal and the dispute with Palmero.
“Of course, this episode has been difficult,” Darrois said. “He has
taken all necessary decisions and measures to address the issues,
strengthen governance and ensure full transparency. The matter is now in
the hands of the judiciary, in which he has complete confidence. His
focus is now fully on Monaco’s future.”
Palmero’s
lawyers, Marie-Alix Canu-Bernard and Christophe Llorca, dismissed the
allegations, saying that his management of the family’s assets had only
ever been profitable. “The false indignation of the princely family —
especially Prince Albert’s — inventing that their estate administrator
of 22 years might have tried to appropriate their assets, is utterly
staggering,” they said. The lawyers described the barrage of lawsuits as
a “palace vendetta” aimed at silencing Palmero’s fight against
corruption.
With
no income tax for individuals and an obsession with privacy, Monaco is a
magnet for billionaires, celebrities and high-net-worth expats looking
to shelter fortunes in plain sight. Property prices regularly hit over
$110,000 per square meter, making it some of the most expensive real estate on earth. The harbor in the sun-dappled Mediterranean hosts a parade of superyachts—floating mansions stacked with helipads and champagne decks, all moored just steps from the palace.
And
once a year, the entire city transforms into a high-octane playground
for the Monaco Grand Prix, when Formula 1 cars scream through the narrow
streets, watched from private terraces and luxury suites perched above
the track.
The
principality’s global status is largely the creation of Albert’s
father, Prince Rainier III, who ruled for over 50 years. In 1956, he
married Grace Kelly, the Hollywood starlet whose image helped cement
Monaco’s mystique on the world stage until her death in a car accident
in 1982....