Prince Andrew’s Spy Scandal Has ‘Caused Panic in the Palace’: ‘Royal Family Is Spiraling’

About 70 members of the extended royal family attended the annual pre-Christmas lunch hosted by King Charles III at Buckingham Palace on December 19. And despite the presence of his daughters, Princesses Beatrice and Eugenie, Prince Andrew was not among them. His ex-wife, Sarah Ferguson, “also urged him to skip the traditional celebration at Sandringham,” a palace source exclusively tells In Touch, “to avoid putting his brother in the awkward position of disinviting him.”

It’s probably best to lay low. Just two weeks before Christmas, a new scandal involving the disgraced prince exploded: According to U.K. court documents, Chinese businessman and alleged spy Yang Tengbowas “a close confidant” of Andrew’s “in an apparently serious breach of national security.” Andrew has insisted that “nothing of a sensitive nature was discussed,” and he’s cut ties with Yang, who denied claims that he is involved in espionage. But the media frenzy “has caused panic in the palace — he’s been accused of spilling all to this man, and Andrew knows a lot,” says the source, noting that as the late Queen Elizabeth II’s favorite child, Andrew has been privy to highly sensitive information about the king and his children. “The royal family is spiraling over fears that secrets are going to be coming out.”

CLOSE TIES

It doesn’t look good for Andrew. The Duke of York, 64, reportedly knew Yang for 10 years, and by 2020 had “an unusual degree of trust” in him, according to a U.K. national security court’s judgment upholding Yang’s ban from the country. Their relationship developed “in a context where the Duke was under considerable pressure,” the document states.

At the time, Andrew, who was still reeling from his disastrous 2019 BBC interview in which he fumbled to explain his friendship with late pedophile Jeffrey Epstein and allegations that he’d had sex with Epstein victim Virginia Giuffre when she was a minor. (The prince denied any wrongdoing but was stripped of his military titles and forced to step down as a working royal.) “It is obvious that the pressures on the Duke could make him vulnerable to the misuse of that sort of influence,” read the judgment. In a memo found in Yang’s possession, Andrew, who has reportedly been cut off financially by Charles and is resisting the king’s attempts to evict him from his longtime residence, Windsor’s Royal Lodge, is described as being in a “desperate situation and will grab onto anything.”

Andrew went to great lengths to foster the relationship, the documents show. Yang, 50, was invited to the duke’s private 60th birthday party, and in a 2020 letter, Andrew’s senior adviser wrote to him: “I hope that it is clear to you where you sit with my principal and indeed his family …. You sit at the very top of a tree that many, many people would like to be on.”

The adviser even suggests that at Yang’s behest, Andrew’s team could “get people unnoticed in and out of the house in Windsor.” The idea that a covert operative “could have been sneaking onto the royals’ private property with Andrew’s help is disturbing,” says the source, noting that the lax security on Windsor grounds was recently exposed when burglars scaled the fence to steal farm equipment. “But what is most concerning is that Andrew might have shared things, even in passing, that could be damaging to the family.”

BEHIND PALACE WALLS

What could he reveal? “There’s so much going on with Charles,” says the source, noting that the king, 76, and Prince William have been criticized recently for how they run the duchies of Lancaster and Cornwall, which have generated billions of dollars. Meanwhile, politicians in Jamaica have made a historic bid to remove Charles as ceremonial head of state in their country. “And there are details about Charles’ battle with cancer that haven’t been publicly disclosed, like how much longer he has to live,” adds the source, “and when William and Princess Kate will become king and queen.”

The state of their marriage is another sensitive topic. The pair, both 42, have been plagued by rumors of an affair between the prince and their Norfolk neighbor Rose Hanbury for years. And though both William’s and Rose’s lawyers have denied it, says the source, “there’s been gossip behind palace walls about the toll the headlines took on William and Kate.”

Andrew also had a front-row seat to “Megxit.” When Meghan Markle, 43, and Prince Harry, 40, stepped down from the family in 2020, “it was a difficult time for the late queen — and she and Andrew were always close, so it wouldn’t be surprising if she shared her thoughts with him,” the source says of what some royal experts have characterized as a “private betrayal” by Harry. Despite the bombshells in his memoir, Spare, Harry has hinted that he held back some stories, and since Beatrice and Eugenie remain close with their cousin, says the source, “Andrew could have heard more of them.”

Even decades-old dirt isn’t safe. Andrew knew the late Princess Diana since childhood and was originally intended to be romantically matched with her. She was also BFFs with his ex, Fergie. “He’s likely got stories of how badly the family treated Di, which could destroy any goodwill Charles has won back,” says the source. “The fact that the family have shunned Andrew for years may now backfire because he doesn’t have much to lose. And loose lips sink ships!”