Grilling over Scholz’s handling of multibillion-euro tax fraud ends in stand-off


  • Scholz testifies before Hamburg lawmakers about fraud treatment
  • Case threatens to undermine Scholz as he faces multiple crises
  • Scholz lags behind top ministers, SPD party third in polls

BERLIN, Aug. 19 (Reuters) – A criticism by Hamburg lawmakers of German Chancellor Olaf Scholz over his handling of a multibillion-euro tax fraud when he served as the city’s mayor ended in a stalemate on Friday as Scholz denied any impropriety and opposition lawmakers accused him to cover up the truth.

While the 3-1/2-hour hearing didn’t provide any new insights into the “cum-ex” scandal, the drag on the case threatens to undermine the chancellor, who struggles to keep his fragile coalition together in the face of it. public dissatisfaction with rising energy costs.

In the “cum-ex” scheme, or dividend stripping, banks and investors would quickly trade company shares around their dividend payout day, blurring share ownership and allowing multiple parties to falsely claim tax refunds on dividends.

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The loophole, now closed, took on a political dimension in the northern port of Hamburg due to the slowness of the authorities in 2016, when Scholz was mayor in demanding reimbursement of millions of euros paid under the scheme by the local authorities. bank Warburg were earned.

Warburg, which plays a major role in Germany’s second-largest city, finally paid its tax bill of about 50 million euros ($50.3 million) after the federal Treasury intervened.

“I have had no influence whatsoever on the tax case in Warburg,” Scholz said Friday during his second appearance before the Hamburg parliamentary inquiry into the cum-ex affair, one of Germany’s biggest post-war corporate scandals.

“There’s not even the slightest suggestion anywhere that I’ve agreed with anything,” he said, citing dozens of other testimonials before the committee over 2-1/2 years of investigation.

Scholz again insisted that he could not remember the contents of the three meetings he had with Warburg’s chairman at the time, adding that as mayor, he had also met representatives from other banks.

“The chancellor basically declined to participate in the inquiry today,” said opposition conservative representative Richard Seelmaecker on the committee, joking that Scholz would have to undergo hypnosis to restore his lost memories.

Seelmaecker said Scholz could be called to testify before lawmakers for the third time as new findings from the investigation just emerged.

The Chancellor’s popularity lags behind that of his economy and foreign affairs ministers, with only 58% of Germans feeling he is doing well, compared to an average of about 70% for his predecessor, Angela Merkel, during her 16 years in office.

His Social Democratic Party (SPD) has fallen to third in the polls, behind opposition conservatives and junior coalition partners the Greens.

EUR 200,000 IN A Vault

Treasury Secretary Christian Lindner, of the junior coalition party, the pro-business Free Democrats, which is also trailing in polls, lent his support to the chancellor on Friday.

“I have always understood Olaf Scholz as a person of integrity, whether I was in the opposition or as now in the government – and I have no reason to doubt that now,” Lindner told the Rheinische Post newspaper.

Prominent Greens have kept quiet about the affair after criticizing Scholz about it while in opposition.

Recent headlines that prosecutors investigating the plan in Hamburg discovered 200,000 euros in the safe of a local politician of Scholz’s ruling Social Democrats raised suspicions of political intervention on behalf of the bank.

Scholz denies any knowledge of the money or its origin and says he has no further contact with the relevant legislator. The legislature did not respond to a request for comment.

“I hope that suspicions and innuendo can stop,” Scholz said. “They’re missing any base.”

The chancellor had had to deal with Hamburg lawmakers last year.

Gerhard Schick, director of watchdog Finance Watch Germany and former Greens legislator in the federal parliament of the Bundestag, said he did not believe in Scholz’s forgetfulness.

“I think that’s appearances and it damages his credibility,” he said.

One of the prosecutors’ recent findings is a discrepancy between the many agenda items of the Hamburg authorities calling the Warburg bank and “cum-ex” and the few emails on the subject, Der Spiegel magazine wrote, citing to the prosecutors’ report.

“This suggests a targeted deletion (of emails),” Spiegel quoted the report as saying.

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Reporting by Sarah Marsh and Andreas Rinke; Additional reporting by Hans Seidenstuecker and Jan Schwartz; adaptation by Andrew Cawthorne, Toby Chopra and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voice
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.


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