- Associated Press - Saturday, February 8, 2014

PALMA DE MALLORCA, Spain (AP) - In a historic judicial hearing that could further impact the deteriorated image of Spain’s monarchy, Princess Cristina testified Saturday in a fraud and money laundering case in which she and her husband could eventually be charged.

Judge Jose Castro will rule on whether Cristina, the first Spanish royal to be questioned in court since the monarchy was restored in 1975, illegally used funds from a company she owned with her husband for personal expenses, including lavish parties at their Barcelona mansion.

Hundreds of protesters blew whistles, revved motorcycle engines, honked car horns and chanted “Out with the Spanish crown!” near the back entrance of the island courthouse where Cristina was dropped off in a modest hatchback.

She briefly smiled and said “good morning” to a mob of journalists. Castro summoned her after naming her as a fraud and money laundering suspect.

The closed-door session, which lasted nearly seven hours, was a key step in determining whether she will be charged, but a final decision could take months.

The use, or suspected abuse, of company funds to cover household expenses at the Barcelona home is among evidence Castro has compiled about Aizoon, the real estate and consulting firm Cristina co-owned with her husband.

Castro has referred to Aizoon in court paperwork as a “front company.”

A lawyer representing an organization called Frente Civico, which has brought independent accusations against the princess, told reporters during a recess that Cristina seemed calm and well-prepared.

But Manuel Delgado also said Cristina was evasive and at times exercised a right not to admit facts that could hurt her defense.

“She’s practically not answering anything. She doesn’t know, she doesn’t answer and that’s it,” said Delgado, who was among lawyers allowed inside the courtroom to watch the testimony.

Delgado declined to comment on Castro’s questions, but said the princess told the judge “she had great confidence in her husband.”

After the hearing ended and the princess had left, giving a broad smile to the waiting press, her legal team said the questioning had gone well as far as they were concerned.

“Answers given with a ‘yes’ or ‘no’ are not considered evasive anywhere,” said Jesus Silva, one of Cristina’s lawyers. “They are emphatic, exactly the opposite to evasive,” he added.

Prosecutors dropped a subpoena in a related case because of insufficient evidence of her involvement in a foundation set up by her husband, Inaki Urdangarin, an Olympic handball medalist turned businessman.

The legal troubles of King Juan Carlos’ youngest daughter have seriously damaged the Spanish monarchy’s image at a time of 26 percent unemployment, outrage over political corruption, tax hikes and austerity.

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