Prince Andrew’s charitable trust has been found to have breached charity law by paying one of its former trustees.
The trust has repaid more than £355,000 which is to be distributed among charities, after the Charity Commission identified the breach in an investigation.
Andrew’s charitable body allowed the former trustee to work as a director for a fee for three of its subsidiary companies – in breach of rules.
It marks another blow for the Duke of York who has been caught in a legal row over requests by US authorities to be a witness in their ongoing investigation of the disgraced financier Jeffrey Epstein.
The commission started the investigation into the Prince Andrew Charitable Trust, which supported his charitable work in the areas of education, entrepreneurship, science, technology and engineering, because of his disastrous interview on BBC Newsnight.
After that interview he was forced to step back from his public royal duties, citing the unnecessary distraction his friendship with Epstein created from the family’s work.
The interview has also inadvertently led to the breach being discovered – as the charity sought to ensure the interview did not bring “reputational” damage to the work.
In a statement, the Charity Commission said: “The Commission identified concerns about a former trustee being paid by the charity’s three trading subsidiary companies as a director of those companies.
“The former trustee was an employee of the Duke of York’s Household and from April 2015 to January 2020 undertook work for the trading subsidiaries.
“The Duke of York’s Household was then reimbursed for a proportion of this employee’s time by the subsidiaries after the year end. These payments totalled £355,297.”
The investigation found the charity could not show the conflict of interest relating to the trustee receiving payments were adequately managed at trustee meetings, and that open and fair competition was not conducted before the trustee got the role.
The Duke of York’s household has paid back the money.
Helen Earner, director of operations at the Charity Commission, said: “Charity is special - with unpaid trusteeship a defining characteristic of the sector. 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 charitable trust is now winding up and remaining funds will be distributed among charities with similar aims.
It will request to be taken off the charity register.
Yahoo UK has contacted Buckingham Palace for comment.
The news comes a day after the Duke of York made a rare statement about his offer to help American investigators over the Epstein case.
The duke and the US financier were friends and the duke has been accused of having sex with a trafficked woman, Virginia Giuffre, on one occasion when she was a minor in US law.
The duke denies all allegations of wrongdoing and on Monday claimed he had offered help on three occasions but that US authorities were breaching confidentiality rules.