Germans Question Methods to Obtain Info on Tax Evaders | Germany | News and in-depth reporting from Berlin and beyond | DW | 28.02.2008

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Germans Question Methods to Obtain Info on Tax Evaders

The German government's crackdown on tax evaders comes courtesy of stolen bank data, for which Germany's intelligence service, the BND, paid millions. But now many have begun to ask: Does the end justify the means?

Scales tipped by a bundle of bank notes

Can the millions of recouped tax euros make up for bending the law?

Investigators probing the scale of tax evasion by Germans have already uncovered some 200 million euros ($300 million) in funds stashed in trusts in Liechtenstein -- and that's just the tip of the iceberg.

By the time investigators have finished, the 4.2 million euros paid to an informant alleged to have stolen client data from Liechtenstein's LGT bank in 2002 will look like a bargain-basement price in comparison with the vast sums reclaimed by the German finance ministry.

LGT group logo

The data bought by the BND was reportedly stolen from the LGT group in 2002

Despite this, the whole affair is leaving a bad taste in the mouths of many ordinary Germans as well as politicians who take issue with the methods used by the government to obtain the Liechtenstein bank data.

A poll showed that 52 percent of voters think the Bundesnachrichtendienst (BND) should not have paid for the information, while just 41 percent think the payment was justified.

"Ordinary Germans feel a certain solidarity with the people who are now being investigated for tax evasion," said Frank Decker, a political scientist at Bonn University.

"On some level, this is something everyone in Germany tries to do, whether that involves writing off bigger sums in your tax declaration than you should, getting paid for work that you don't declare or paying someone to work under the table for you," he added. "These people also don't want to be caught, and so they have something against the government using such methods to pursue tax evaders."

A great deal or a criminal act?

The BND normally has nothing to do with tax matters, but officials say it was offered the information and only acted on it after consulting the government and tax authorities.

A notarized contract for the sum paid to the informant was drawn up, and detailed records were kept every step of the way.

According to finance ministry officials, there's no doubt that the data will be admissible in court. Finance Minister Peer Steinbrück said he didn't want to imagine the "wave of indignation that would roll through the country" if the BND had acted any differently.

But Ferdinand von Schirach, one of two lawyers who have said so far that they plan to sue the German state for its handling of the affair, said the government cannot use taxpayers' money to reward criminal acts -- such as the stealing of confidential bank information.

"Even though it seems like a great deal… a crime cannot be committed," he told Reuters TV. "If that was the case, the state would be no better than any criminal on the street."

BND must answer to parliamentary committee

Last week, the BND was asked to brief a parliamentary committee on its methods so that the government could decide whether to approve or disapprove of the Liechtenstein operation, but members of the parliamentary intelligence committee deemed more documents were needed.

The next briefing is set for March 5. Speaking to the Berlin-based newspaper, taz, following the initial briefing, Green party parliamentarian Christian Ströbele stressed the need for rule of law, even when it comes to hunting down tax evaders.

"Putting aside my joy that the right people are finally being targeted, the law has to be followed here, even against our richest citizens," Ströbele said.

Wolfgang Neskovic

Neskovic: BND's behavior is "clearly illegal"

Left party parliamentarian Wolfgang Neskovic was more critical.

"The BND's behavior is, in my view, clearly illegal," he said.

But Neskovic doubts whether the parliamentary session on March 5 will lead to any consequences for the intelligence agency.

"In this republic, there are unchecked zones, especially when it comes to the intelligence service, and this has to change," said Neskovic, a former Federal Court justice. "What we know of up to now is just a drop, and what we don't know amounts to an ocean."

Liechtenstein furious over German tactics

Prince Alois of Liechtenstein

Prince Alois says Germany is attacking his nation

The acting head of Liechtenstein, hereditary Prince Alois, has described the BND's behavior as "highly suspect." He said the informant, who has been identified as former LGT bank employee Heinrich Kieber, had been convicted of stealing bank data in 2002 and imprisoned.

"Obviously, Germany wants to be a big-time receiver of stolen goods," he said, also making thinly veiled references to Germany's past aggression in Europe. "We are also a sovereign state and -- we hope -- do not live in an era where might makes right."

Contributing to the war of words that's been started with the tiny Alpine state, German Chancellor Angela Merkel accused Liechtenstein's banks of "encouraging lawbreaking," and said that it and other tax havens should "mend their ways" or face the consequences.

Swiss banks suspicious of espionage

One of the consequences already emerging from the BND's Liechtenstein operation is that Germans applying for jobs at Swiss banks will undergo additional scrutiny in future because of espionage concerns. The thousands of Germans already working in Switzerland's financial industry could also feel the effects of the German government's crackdown.

The head of Switzerland's private banker's association, Michel Derobert, said the methods used by the BND to obtain the secret banking data from Liechtenstein were "reprehensible" and would lead to extra precautions in Switzerland to protect client privacy. Germany's purchase of the data will discourage Swiss banks from employing Germans, he told the Swiss daily Le Matin.

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