Prince Albert

Prince Albert's secrets under threat from rebel spy
From The Sunday Times
October 25, 2009

A pay dispute could mean an extremely embarrassing court case for the 'feckless' Prince of Monaco - complete with sex tape

Matthew Campbell

Everyone wants to make friends with Albert, the prince of Monaco, the fairytale, Mediterranean mini-state whose balmy weather and strict banking secrecy have turned it into the playground of choice for tax exiles from all over the world.

The question of whether they like him, or simply want something from him, has haunted the world’s most eligible bachelor ever since he was preparing to take the helm from his father, Prince Rainier, who died in 2005.

Albert, the shy, bespectacled prince was about to become head of the Grimaldi clan. Sipping Martinis in a flat over looking the sea, he asked Robert Eringer, the American adviser he had hired three years earlier as his unofficial head of intelligence, to help him find out what people thought about him, no matter how painful.

Eringer, a former undercover FBI operative, had been in the prince’s employment since 2002. Now Albert wanted to clean up Monaco and only an outsider could help, launching secret investigations of officials and foreign entrepreneurs suspected of money laundering and organised crime.

Operation Hound Dog, as Eringer named it, had less lofty goals, originally intended to find out who in the prince’s picturesque pink palace was leaking news to the press about him and the other Grimaldis. Later, according to Eringer, Albert asked him “to extend this ruse to engage his many friends to find out what they would say about him behind his back”.

Eringer hired an “operative” to pose as the author of an unauthorised biography of Albert, the only son of Grace Kelly, the American actress, to flush out the gossips. He even engineered a bona fide publishing contract for his mole.

Today, though, it is Eringer who is dishing dirt on the prince after falling out with his former patron: he has taken Albert to court in California with a demand for €360,000 (£331,000) in wages and severance pay. In order to attract the prince’s attention, his lawsuit — a copy of which has been obtained by The Sunday Times — lays bare some of the dirtiest secrets of the palm-fringed principality on the Riviera.

Eringer, a writer of spy fiction and a former journalist, has pay slips to show that he served as Albert’s tireless spymaster between 2002 and 2007.

He investigated Russian mobsters and British property tycoons. He warned the prince about which “friends” and supplicants to avoid, including Mark Thatcher, the son of Margaret Thatcher, the British former prime minister. He even became embroiled in negotiations with a Californian teenager who was later recognised as Albert’s illegitimate daughter.

Eringer paints an unflattering portrait of a feckless, indecisive prince who quickly tired of intelligence briefings in favour of go-karting and “gallivanting about”. Albert, says the lawsuit, had “convinced himself years ago that attending parties was ‘working’”. The playboy prince, on at least one occasion, asked the spymaster to “assist” a woman who had been the subject of his amorous attentions.

As for Operation Hound Dog, it led to Paris, where an American entrepreneur friend of Albert was said to be boasting about a video he had taken of Albert at his 40th birthday party. Eringer said that it showed a woman performing a “sex act” on the prince.

“This is what I have on your prince,” the American was in the habit of commenting to friends in Monaco as he showed them the film.

The lawsuit is extremely embarrassing to a country which is trying to clean up its act in order to be removed from the famous “blacklist” of uncooperative tax havens issued by the Organisation for Economic Co-operation and Development. It cast a shadow over Albert’s efforts to promote his fight against climate change at a gathering of celebrities in Hollywood last week.

Albert’s lawyers have responded in fury to what they regard as an attempt to extort money from the soft-spoken prince. Thierry Lacoste, Albert’s Paris-based lawyer, said that “the majority” of what was claimed in the lawsuit was “completely false”.

Stanley Arkin, the prince’s New York attorney, described himself as one of several lawyers called to the defence of Monaco and its ruler. The prince, he said, “has told us that this is baloney ... the fact that he [Eringer] received money from [Albert] from time to time — so what?”

He called Eringer “an unworthy human being” who was trying to “extort” money from Albert, 51, with a “made up” lawsuit. Atkin said, in praise of his client: “This is nothing but an attempt to drag down this wonderful young man.”

Eringer, 55, was not amused at what he called “slander”. He said that he had written several times demanding payment before launching his lawsuit. He never had any reply.

“I look forward to testifying about the veracity of each element of my complaint under oath in a court,” he said from his home in Santa Barbara, California. “And I look forward to Prince Albert doing the same, under pain of perjury.”

Albert, he claims, agreed in 2002 to pay him £220,000 a year to set up an unofficial intelligence service to fight corruption and investigate those suspected of money laundering and fronts for organised crime.

With its casino culture, gleaming yachts and luxury real estate, the tiny territory wedged between France and Italy has for long been a magnet for money of dubious origins; “a sunny place”, in the words of Somerset Maugham, the writer, “for shady people”.

When Rainier fell ill towards the end of his reign, things began to deteriorate, according to a palace official quoted in the Eringer lawsuit.

Rainier’s fairytale romance with Kelly, whom he married in 1956, had brought a touch of glamour to Monaco that helped to turn the tiny state into a key offshore financial centre. The idyll faded slightly after Kelly’s death in a car crash in 1982. As Rainier lay dying in 2005, Monaco was in trouble.

Rainier, said Claude Palmero, an accountant at the palace, “wasn’t even a shadow of himself during the last two to three years. He wasn’t there. He could not even discuss his own personal affairs. He signed whatever was put before his eyes”.

Those around Rainier, who was famed for his collection of vintage cars, “were exploiting his weakness, his ill health, his mental incapacity and running rampant with awards and Monegasque passports and job appointments and future job promises in Prince Rainier’s name”, according to Eringer.

Albert, who is described as being closer to his American mother than to an authoritarian father who insisted on speaking French, decided the time had come to stop the rot.

After Rainier was buried next to Kelly in Monte Carlo’s cathedral and Albert had been sworn in, he held a reception at the palace to proclaim the new gospel.

It was enough to make his subjects choke on their canapés. “Money and virtue must be combined,” he said.

To help him go after the “bad guys”, as Eringer puts it, the spymaster set up meetings with the heads of America’s FBI and CIA, as well as briefings on organised crime from British intelligence.

He claims to have notched up successes. Operation Scribe resulted in glowing press coverage of the prince’s crackdown on corruption: “Monaco steers clear of once-shifty image,” was how USA Today reported the transition. Operation Spook, meanwhile, was used to scare away dodgy businessmen with tip-offs that they were under investigation.

Eringer also claims that he had thwarted efforts by Russian intelligence to penetrate Albert’s “social orbit” and helped to expose a retired American air force colonel suspected of involvement in Russian money laundering through a Monaco firm.

He claims that he managed to stop a corrupt Russian from becoming an investor in Monaco’s much beloved football team and advised the prince to keep away from a French businessman friend of Jacques Chirac, the former French president, who Albert claimed had produced “great ideas for Monaco”. The businessman had allegedly played a role in the Iraq oil-for-food scandal under Saddam Hussein.

One of Eringer’s constant concerns was the penetration of Monaco by freemasons. According to the lawsuit, he briefed Albert “on the three masonic lodges in France and their overlap with organised crime, including links to Monaco”. He advised the prince “to curtail freemason influence in Monaco and to follow Britain’s example of compelling those in civic jobs to declare freemason affiliation for the purpose of transparency and to quash any attempt by freemasons to establish a lodge in Monaco”.

He also investigated “the connection between Italian organised crime groups and Monaco”, pinpointing which banks in Monaco were used by mobsters for laundering money.

It was Eringer who tipped off the prince about efforts by Mark Thatcher to gain residency in 2005, resulting in his rejection as “undesirable”.

Albert was apparently pleased with Eringer’s industry. He authorised him to set up a headquarters known as “M-base” in an apartment block overlooking the sea. Eringer regularly briefed Albert there during the cocktail hour.

Eringer had a “Monaco intelligence service” identity card, signed by the prince, that urged authorities to give him their full co-operation. Albert gave him a photograph of himself on which he scrawled “Best wishes and long life to M-base”.

Eringer says that his running costs for some missions were supplemented with funds from the CIA, which he accepted after consulting the prince. Albert’s only comment was: “Make sure the French don’t find out.”

The CIA apparently found it a fruitful co-operation, delighted, no doubt, to have gained such a toe-hold in France’s “back yard”.

“As a result of Eringer’s efforts,” says his complaint, “[former] CIA director Porter Goss pledged to protect HSH [His Serene Highness] and Monaco, which became accepted as doctrine within the CIA, along with [giving Monaco] high-priority status”.

Other targets of Eringer’s intelligence-gathering were a colourful cast of characters that could have come straight from the pages of any spy novel. One of the Russians he investigated was suspected of several murders in his homeland. Eringer also delved into the activities of members of some of Monaco’s most prominent families.

He was particularly proud to have drawn agencies from other European mini-states into a “micro Europe” intelligence union. He claims he would regularly meet the spymasters of Luxembourg, Liechtenstein, Andorra, San Marino and Malta for weekends of wine tasting when they would share information about money laundering and organised crime. They would also share jokes.

Italian intelligence officials told him, according to the lawsuit, that “they were taking bets not on whether Eringer would make it through the year, but on who would eliminate him: Italian organised crime, Russian organised crime, the freemasons, the Monegasque establishment or the French”.

Eringer was dismayed when Albert appointed to a top government post an official who, according to Eringer’s reports, had accepted a £2.7m bribe from a Lebanese entrepreneur, falsely claiming that it was for the prince. The Lebanese businessman was heard boasting: “I’ve got Albert by the balls.”

Another official was put in charge of a government department despite his alleged involvement in the theft of a £1m painting by Miro, the Spanish artist, that had been donated to the Monaco Red Cross. According to Eringer, another local figure had been “involved in shredding evidence about the money left in Monaco by 200 Jews deported from Monaco to concentration camps in 1944”.

Just as distressing for Eringer was Albert’s dismissal of Jean-Luc Allavena, the prince’s chief of staff. “HSH finally had the balls to fire someone,” Eringer wrote in his journal.

“The bad news: he fired the wrong person ... Allavena was the backbone of Albert’s reign, honest and incorruptible, slogging away from 7am to midnight most weekdays while HSH was off gallivanting.” Eringer said that he was “mortified” when, despite all his warnings to Albert about freemasons, the prince, a former member of Monaco’s Olympic bobsleigh team, informed him that “a former bobsledding [colleague] wanted to create a freemason lodge in Monaco and that he was inclined to let him go ahead”.

Albert, who had begun dating Charlene Wittstock, 31, a South African Olympic swimmer, seemed to lose his interest in the briefings at M-base.

“HSH did not appear at a meeting ... to brief him on a very shady character who had arrived in Monaco to deal in conflict diamonds and laundered money,” says Eringer in one part of his lawsuit. “Instead he went go-karting.”

By the summer of 2007, Albert had reduced Eringer’s salary to £144,000 and told him to focus exclusively on “maintaining and working the liaison relationships” with foreign intelligence services instead of investigating money laundering suspects. However, when Eringer sent an invoice for payment for the first quarter of 2008 he got no reply from the palace.

Subsequent letters and telephone messages to Albert from Eringer went unanswered, he claims. Eringer decided to cease his activities.

“Everything I did was in the service of the prince,” he writes in the suit claiming breach of contract. “I regret nothing. I acted professionally at all times ... we were too damned honest and efficient for our own good.”