Prince Harry and Prince William Charities Scrutinized Over Funds Transfer

Two charities backed by Prince Harry and Prince William are being scrutinized by U.K. regulators over accusation that the charities misused funds, Newsweek has learned.

The claims were first reported six months ago, however the regulator's decision to pursue an ongoing "regulatory compliance case" had not previously been disclosed.

Such a case is not considered an official investigation, but can lead to a warning or an action plan being put in place. The decision to launch one means the two charities will likely not face a full inquiry, which is able to bring heavier sanctions.

It follows anti-monarchy campaign group Republic reporting the charities to the U.K. regulator, the Charity Commission, in July 2020.

Republic claimed payments totalling $350,000 made by the Royal Foundation, and Harry and Meghan Markle's—now defunct—Sussex Royal charity, to the prince's eco-tourism initiative Travalyst were inappropriate.

It argued that the transfers were made in order to smooth the damaged relationship between the warring brothers, rather than in the interests of good causes. The charities deny any wrongdoing.

A commission spokesperson told Newsweek: "We have been looking at these concerns as part of an ongoing regulatory compliance case.

"A compliance case means we are assessing the information that has been put to us and seeking to establish facts; it is not, in itself, a finding of wrongdoing.

"This is not a formal investigation (statutory inquiry), which is our more serious form of intervention."

The Charity Commission case has not reached its conclusion.

Prince Harry, Prince William, Meghan and Kate Middleton were previously all part of the same Royal Foundation charity, back when the press still called them the "fab four."

However, when Harry and Meghan broke away to form their own household separate from William and Kate, prior to quitting royal duties, the charity split too.

William and Kate stayed with the Royal Foundation while Harry and Meghan set up Sussex Royal, and some of the funding went with them.

The decision to transfer the funds was taken by the charities board of trustees, which did not include Harry and William, who were patrons rather than trustees.

Republic's letter to the Charity Commission alleged: "These two charities appear to be in breach of guidelines regarding the proper use of charitable funds and may be failing in their duty to act independently and solely in the interests of their objectives.

"The Royal Foundation gave a grant of £145,000 ($183,000) to Sussex Royal and £144,901 ($183,057) to a non-charitable organization (Travalyst).

"In both instances it appears the only rationale for the decision was the personal relationship between two patrons, the Duke of Sussex and the Duke of Cambridge."

After Queen Elizabeth II ruled Harry and Meghan would not be able to use the word "royal" in their branding, Sussex Royal was sent into voluntary liquidation.

Money, first donated to the Royal Foundation, was moved again to Harry's venture, Travalyst.

At the time Republic's complaint was first made, Harry called in Schillings, his lawyers, to threaten legal action against the pressure group. Republic subsequently deleted a press release about the complaint from its website.

A spokesperson for Schillings said in July: "This is his [Prince Harry's] life's focus, and his devotion to charity is at the very core of the principles he lives by, and is obvious through the impact and success of his many charitable projects throughout the UK and beyond.

"To this point, it is deeply offensive to today see false claims made about The Duke of Sussex and his charitable work.

"It is both defamatory and insulting to all the outstanding organisations and people he has partnered with."

In July, a spokesperson for The Royal Foundation said: "The grants made to Sussex Royal were to support the charitable work of The Duke and Duchess of Sussex.

"They were fully in line with governance requirements and were reported transparently."