Was Prince Andrew Settlement Paid for by the British Public? It's Complicated

Prince Andrew's decision to pay off his sexual abuse accuser rather than face a devastating civil trial has raised questions about where his money is coming from.

The Duke of York bowed out of the Jeffrey Epstein-related lawsuit after months of grandstanding, with lawyers estimating he could face a bill of more than $10 million.

Queen Elizabeth II's second son agreed on Tuesday to settle the civil suit brought by Virginia Giuffre, who says she was forced to have sex with Andrew while a 17-year-old trafficking victim of his friend Epstein. Prince Andrew has always denied the allegations.

Andrew had a recent windfall from the sale of his Swiss holiday home, Chalet Helora, but The Daily Telegraph also reported the Queen will contribute.

Buckingham Palace declined to comment, but even if the newspaper is correct, the issue of whether the payment constitutes public money is a complicated one.

Prince Andrew at Windsor Church
Prince Andrew leaves the Easter Sunday church service at St George's Chapel, Windsor Castle, on April 5, 2015. The Duke of York paid off the woman who accused him raping her when she was a 17-year-old sex trafficking victim. BEN STANSALL/AFP via Getty Images

Royal Finances

The royal family's main source of public funding is the Sovereign Grant, paid by the British government each year using profits drawn from property portfolio The Crown Estate.

However, it is highly unlikely any Sovereign Grant money would have been given to Andrew, not least because the payment would likely have become public in annual accounts.

The Queen could of course dip into her personal fortune, which includes Balmoral Castle and the Sandringham Estate and has been estimated at $500 million by Forbes.

The Daily Telegraph, however, identifies a different estate as the source of the queen's contribution, The Duchy of Lancaster.

The property portfolio was founded in the 13th century and its own website describes how it is "held in trust for the Sovereign in His or Her role as Duke of Lancaster."

In other words, it is not the queen's personal wealth, to do with as she pleases, but belongs to the office she occupies as monarch.

Public Funding?

There is a dispute over to what extent—if at all—profits from the estate should be considered public money, though either way it has nothing to do with the income tax that comes out of the pay packets of British workers.

Graham Smith, chief executive of anti-Monarchy group Republic, said: "The Duchy of Lancaster belongs to The Crown and it gives the queen something like £20m ($27 million) a year. Money that should be going to the treasury.

"Most of the money that they have comes from us in one way or another. Whichever way you work it out, it's ultimately us who are paying for Andrew to save himself from a court appearance."

However, not everyone agrees with this blunt assessment and the arcane history of the royal family's finances does not translate easily into modern life.

It's Complicated

Royal financing expert David McClure, author of The Queen's True Worth, told Newsweek the Duchy was overlooked when the crown lands were passed into public ownership in 1760.

At the time it was not worth much, as little in fact as a few hundred pounds or less, however it has since swelled into a £577 million ($756 million) portfolio with an annual surplus of £22.3 million ($30 million).

McClure said there have been various attempts over several hundred years to have it passed over to Parliament but none have been successful.

He told Newsweek: "I wouldn't go as far as to say public. It is maybe 50/50. I wouldn't say it is 100 percent public, that's what the pressure group Republic says.

"I don't take that view. It is disputed. It's been disputed for 200 years by Parliament so I would say it's probably a bit more public than private.

"If the money is coming from the queen then more than likely it's coming from the Duchy of Lancaster.

"Is there public money involved? Who knows, it might be coming from things other than the Duchy of Lancaster. It might be coming from her (the queen's) savings."

However, he added: "I think the public should have the right to know because Prince Andrew is a public figure. Why not? In other cases these figures come out. Why should the royal family be privileged? Do I think it's going to happen? Don't hold your breath."

Prince Andrew in Virginia Giuffre's Famous Photo
Prince Andrew puts his arm around Virginia Giuffre while Ghislaine Maxwell watches on in the famous picture she submitted as part of her sexual abuse lawsuit against him. Giuffre said the image was taken by Jeffrey Epstein on her camera in London, in 2001. Virginia Giuffre