Corinna Sayn-Wittgenstein, a German princess through a former marriage, said in an interview published in daily newspaper El Mundo that she found a job for Inaki Urdangarin in 2004 at the Laureus sports foundation but he ultimately turned it down.
"The king asked me to help Inaki find a suitable job at an internationally recognised organisation," said Sayn-Wittgenstein, whom Spanish media describe as a close friend of the king.
Urdangarin, a former Olympic handball champion who is married to the king's youngest daughter Cristina, is accused of leveraging his connections to gain inflated contracts to stage sports and tourism events from regional governments for the Noos Institute, a non-profit foundation he once managed.
Prosecutors suspect Urdangarin and his former business partner Diego Torres siphoned off millions of euros from these contracts and then redirected much of the money to offshore accounts and private businesses.
Urdangarin, 45, was jeered as he appeared at a court in Palma to be questioned for the second time by a judge investigating the corruption allegations. He and Torres have denied any wrongdoing and have not been charged with any crime.
Torres has provided the investigation judge with e-mails allegedly exchanged between Urdangarin and Sayn-Wittgenstein which appeared to indicate that the king backed and closely followed his son-in-law's business career.
Sayn-Wittgenstein, who runs a consulting firm, Appolonia Associates, told El Mundo that Urdangarin visited her London office in June 2004 to discuss a job at Laureus, which is best known for staging a yearly awards ceremony sponsored by luxury brands.
"His profile seemed perfect to work for Laureus. He was a real 'Golden Boy': an Olympic Athlete with two medals, at Atlanta and Sydney, and member of a European royal family through his marriage with Princess Cristina," she said.
But after several months Urdangarin, who comes from a wealthy Basque family and who acquired the title of Duke of Palma when he married Cristina in 1997, decided not to accept the job, she added.
"When he did not accept the offer from Laureus, I was very disappointed. And that put me in a very uncomfortable position with the Foundation," Sayn-Wittgenstein said.
"It was perfect given his position, but I think it was not enough for him. Laureus was not El Dorado," she added.
Laureus offered to pay Urdangarin a yearly salary of €200,000 but he felt the amount was not sufficient, El Mundo reported.
During his court appearance on Saturday, Urdangarin said the royal family did not advise or authorise the activities of the Noos Institute, which he ran from 2004 to 2006.