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Germany Considers Paying for Information that Leads to 1,500 Tax Evaders
February 16, 2010
Topic: International/Offshore
The newest one-two punch is being served by none other than Germany. German authorities are currently in negotiations with a confidential informant who is offering to sell them information on about 1,500 German offshore account holders. The confidential informant is willing to sell the information for the not so small amount of $3.5 million. German authorities have taken samples of the information and believe it to be credible.
A member of Germany's business-friendly Free Democratic Party and chairman of the German parliament's finance committee, Volker Wissing, confirmed that a decision regarding the purchase will be made at a hearing on February 10, 2010. Wissing added that "the sale of stolen goods is a crime, but any legal means of obtaining important evidence should be considered with an open mind".
Other German officials are slightly more skeptical about the information. Michael Fuchs, the Deputy Parliamentary Party Chairman and a member of Chancellor Angela Merkel's conservative Christian Democratic Union, argued that "It would not be proper for the German government to purchase stolen property and that Germany should press Switzerland to provide evidence of tax fraud through the process of international legal assistance."
The Swiss Bankers Association reacted sharply to the news of the latest assault on their banking system and issued a statement warning Germany to return the information as the Swiss believe it to be stolen banking data. A spokesperson for Germany's finance ministry stated that a decision on the purchase of evidence would be made after state government officials conclude a preliminary investigation into the background of the data in question. This is not the first purchase by Germany of stolen information in the attempts to limit offshore account secrecy. In 2008 German's foreign intelligence service paid Heinrich Kieber, a former bank employee at LGT Group, for stolen account files from LGT Treuhand AG.
German officials believe that the information could lead to a substantial gain, however. Although the earlier match up with America drew a great deal of attention, Americans with offshore accounts represented no more than 5% of the $1.8 trillion that is said to be tied to Swiss secrecy banking. German officials, on the other hand, claim that their country has around $175 billion in Swiss accounts which adds up to about 10% of the total; almost double the amount of the Swiss's most recent accusations.
Germany is not the first country to pressure Switzerland into handing over information about tax evasion. The American government has begun an in depth investigation into the accusations brought forth by several whistle-blowers. Italy launched a tax amnesty program that gained them about €80 billion in hidden money. And last fall, the French government got their hands on stolen data from an employee of HSBC Holdings PLC. The French have since then come to an agreement with the Swiss government that they would not use the stolen data to track down tax evaders.
With several nations out on the hunt for hidden tax money, other tax secrecy nations should take note based on the pressure and fire that Switzerland has been facing over the past few years. Eventually the craze to find tax evaders will spread to other countries like wild fire. Where there's a fire, there will be whistle-blowers waiting to cash in on the rewards to be had by providing valuable information to governments around the world.
