No matter how much time passes, the German Chancellor, Olaf Scholz, cannot leave behind the so-called Cum-Ex scandal, as the operations are known that generated multiple claims for tax withholding that had only been paid once or not at all. and which according to experts meant losses for the German treasury of more than 10,000 million euros. The question in this matter is whether Scholz, then mayor of Hamburg – he served from 2011 to 2018 – or other politicians used their influence in favor of the private bank MM Warburg and the formerly state-owned HSH Nordbank. To try to elucidate this, at the end of October 2020 a commission of inquiry was created in the Hamburg Parliament with the aim of clarifying a possible political influence on the tax treatment of MM Warburg, based in Hamburg. With just a few weeks to go before Germany holds early elections, Scholz’s possible responsibility is still open.
The social democratic leader has already testified three times as a witness – in 2021 and 2022 about Warburg and on December 6 of this year to answer questions related to the HSH Nordbank – and in all of them he has denied having exercised any type of influence. Although after seeing the evidence there are indications of a close relationship between politicians and bankers; no evidence of this has been found. “During Olaf Scholz’s time as mayor of Hamburg, the city was surprisingly lenient towards tax criminals,” the German weekly published Die Zeit.
Scholz’s last appearance once again captured media attention in the European country at a time when the chancellor will try to be re-elected; The elections are next February 23 after the politician put an early end to the government coalition he led due to insurmountable disagreements with his junior partner, the liberals of the FDP, and at a time when the polls show them as winners. the conservatives of the CDU and the far-right AfD (Alternative for Germany) as seconds.
Thus, on December 6, in a brief initial statement, Scholz pointed out to the investigative commission that tax evasion and tax fraud – applicable in the case of Cum-Ex transactions – were not minor crimes, but rather “serious criminal offenses.” and recalled that he has dedicated his entire political life to defending a fair and supportive tax system. “Methods such as Cum-Ex or Cum-Cum must be investigated and prosecuted consistently,” he declared of these two illegal tax evasion schemes. Cum-Cum is another financial strategy applied in countries where national and foreign investors receive different tax treatment and by which a foreign investor disposes of his assets in favor of a local investor just before a dividend payment operation to avoid paying the corresponding taxes.
The background to the chancellor’s appearances before the investigative committee are three meetings between the then mayor Scholz and the president of Warburg and his deputy, Christian Olearius and Max Warburg, respectively, in 2016 and 2017. So, Olearius, of whom always said he had a strong political influence in Hamburg, he was already being investigated for suspicions of serious tax fraud.
Scholz has confirmed these meetings. He has also claimed to have “memory gaps” on many issues; some already legendary forgetfulness in Hamburg, as the German press recalled these days: Die Zeitor the Frankfurter Allgemeine ZeitungThey have highlighted the chancellor’s ability to explain in very different ways that he does not remember anything about the matter. Despite this, the social democratic politician did remember that there was no type of political influence.
Illegal tax maneuvers
The investigation focuses on the question of whether the municipal government of the city state of Hamburg, then chaired by Scholz, influenced the Treasury’s decision to renounce recovering 47 million euros from the Warburg bank – in taxes on the income of the bank. capital that are applied to the dividends― that were improperly returned to the bank, thus allowing them to expire. In addition, another 43 million euros were not claimed until 2017, shortly before the statute of limitations expired and following an order from the German Ministry of Finance.
At the end of 2022, the investigation was expanded – at the insistence of the opposition – to include other Cum-Ex cases, such as that of HSH Nordbank, which since 2019 has been privately owned under the name Hamburg Commercial Bank, questioning whether the government of Hamburg took sufficient measures against the illegal tax maneuvers of this bank. “We are interested in knowing how Scholz found out about the bank’s involvement in Cum-Ex operations and what conclusions he drew,” he explained in a previous interview in Der Spiegel the politician Milan Pein, member of the investigation commission and, like Scholz, of the SPD.
Between 2008 and 2011, 29 tax refund operations were carried out at HSH Nordbank, then the state bank of Hamburg and Schleswig-Holstein, which the banking entity had not previously paid; facts admitted by a member of the bank’s Board of Directors a few years later. The entity commissioned an investigation and presented a confession of sorts in the form of an extensive report prepared by the financial law firm Clifford Chance. In 2014, it returned 112 million euros to the Treasury, as well as 14 million euros in interest. However, the matter did not have criminal consequences for the bankers. The Hamburg Prosecutor’s Office did not investigate, nor was there a fine, nor was it verified whether these were all the illegal transactions that had been committed.
Furthermore, the bank had also participated in Cum-Cum operations for a much larger amount. As reported now by the magazine Stern,Based on an internal report from the responsible tax office in Hamburg, the bank received more than 275 million euros in taxes through such transactions between 2003 and 2012. However, Hamburg has not yet claimed the money. The Cologne Prosecutor’s Office is investigating more than two dozen people accused of these operations. Although the claims would have prescribed under tax legislation, as explained Stern; Hamburg could recover the money if there was a criminal conviction.
The investigation tries to clarify Scholz’s role, as first mayor, in the scandal: What did he know about it? Could I have done something more? In the opinion of investigative commission member Pein, after four years of investigations it has become clear that “there was no political influence on the part of Scholz or anyone else.” “This question was asked of more than 50 witnesses, all of whom responded negatively. There are also no written tests. “Anyone who claims otherwise is doing political theater,” he said. The commission does not have much time left; New elections will be held in Hamburg at the beginning of March, by which time the final report should be ready.