In essence the Nóos Institute did not misuse Government funds, the accusation is that Nóos (not a private business but a non-profit organization by the way) did send invoices for two congresses which were never held and for the events which were organized, the accusation is that they were way overpriced. The clients of Nóos were usually regional governments, municipalities, regional administrative bodies, semi-governmental institutions, etc. The direct accusation is that the surplus, the profit went to the pockets to 15 persons, under them Iñaki Urdangarín.
The point is that when this is true, Iñaki Urdangarín, married to the sister of the King of Spain, had a profit out of wrongdoing (corruption). In comparison with the tsunami of corruption cases engulfing Spain, this really seems to be a minor case but the fact that Iñaki is in it, seems the proverbial red cloth for the angry bull. Before the crisis Spain had a miraculous economic boom, thanks to EU funds, which translated in immense infrastructural works, modernization, redevelopment. When you visit Spain today, you will be amazed about the absolutely perfect highways, the state-of-the-art high speed trains, the brand new urban developments, the erection of mega windmill energy parks, etc. So many Spanish regional governments, municipalities, institutions, banks, companies, wanted to have their part in this immense never-stopping flow of billions coming into Spain.
You want to build a large urban expansion? In our little rural area? Hm.... I think there will be opposition in the council. And eh... will there be any demand for these sparkling new urban houses, somewhere on the countryside? Hm.... Then suddenly the Mayor, the members of the regional governments, the councillors, the members of semi-public institutions found nice envelopes, free diners in posh restaurants, were welcomed to have a nice holiday with family in a luxe resort somewhere. O wait... tickets for the best places in Estadio Santiago Bernabéu for Real Madrid vs Barcelona? Sure!
This practice has really engulfed Spain (and other countries in similar circumstances as Portugal, Italy and Greece), where enormous funds were coming and everyone wanted to have their share. In all this, the case Nóos is a very minor one but of course the spouse of an Infanta de España is an enormous trophy for media and public. The monarchy, until then standing spotless on a piedestal, thundered down from its revered place: so even the King and his family have dirty hands? That was the gigantic damage, not helped by the deep economic crisis and other escapades of the King himself.