Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Olaf Scholz faces new probe over German tax fraud scandal

Olaf Scholz faces new probe over German tax fraud scandal

Germany’s leader is set to face a parliamentary investigation after Easter. The political fallout could be serious.

Germany's center-right opposition wants to raise the heat on Chancellor Olaf Scholz by launching a parliamentary investigation into his alleged connection to a massive tax evasion scandal.

The case — which dates back over five years to the time when Scholz was still mayor of the Hamburg city-state — is linked to the broader so-called “Cum Ex” affair, under which the German state was defrauded by over €30 billion as some banks, companies, or individuals claimed tax reimbursements from authorities for alleged costs that never occurred.

The scandal already hung over the Social Democratic politician's election campaign in 2021 but had little impact in the end as Scholz's potential involvement remained unclear. Now it is heating up again after new details emerged that put his previous defense in question.

The Hamburg regional parliament plans to summon Scholz this spring — which will be for the third time — to an investigative committee looking into the scandal. And now the center-right CDU/CSU bloc also wants to set up an inquiry at the national level in the Bundestag.

“We will request a parliamentary committee of inquiry into the Scholz-Warburg tax affair in the German Bundestag in the first parliamentary week after the Easter vacations,” said the CDU's Mathias Middelberg, deputy parliamentary group chairman, on Tuesday.

A government spokesperson said that “as a matter of principle," Berlin does not comment on decisions announced by Bundestag members "out of respect for the constitutional body," according to media reports.

Katja Mast, the Social Democrats' chief whip, said the CDU/CSU is not following any interest in knowledge, but rather party tactical interests. “They bring up allegations that have long been refuted,” she said, adding that the committee in Hamburg had clarified all questions.

The CDU/CSU group has enough votes in parliament to be able to set up an investigative committee. The Left party also said it would back such a request. Parliamentary investigative committees can hear witnesses and experts and request access to documents. Although the findings are summarized in a non-binding report, the political consequences, such as for upcoming elections, could be significant.

In a letter to the CDU/CSU parliamentary group seen by POLITICO, chairmen Friedrich Merz and Alexander Dobrindt said that the case should be investigated due to its “significant” importance for German national politics.

Scholz has come under scrutiny because of his links to one Hamburg-based bank involved in the tax evasion scheme: During his time as mayor, he met on three separate occasions in private with one of the owners of the M.M. Warburg & Co. bank, which was already under investigation at the time by the Hamburg tax office. Officials were planning to reclaim €47 million, which they believed were ill-gotten gains in connection with the fraud.

However, in the end, the finance authority let the statute of limitations on the payment demand expire — and years later, after details of Scholz's meetings with the banker emerged, critics began questioning whether the top Social Democrat might have intervened in favor of the bank.

Although the chancellor has constantly denied having intervened, he has also given no answer on what was discussed during the private meetings. Instead, Scholz said on several occasions during the past two-and-a-half years that he cannot remember the content of the discussions.

During his time as mayor of the Hamburg city-state, Scholz met with one of the owners of the M.M. Warburg & Co. Bank, involved in a tax evasion scheme


That defense is now being called into question as details emerged of a previous and longtime confidential Bundestag committee hearing with Scholz in July 2020, in which he appeared to easily remember details of his meetings with the banker. His critics argue that Scholz only started to claim having no memory of the meetings when their political and possibly criminal explosiveness became clear.

“This comprehensive memory gap of the chancellor after an initial memory of a concrete meeting … raises a multitude of questions to be clarified,” the letter from the CDU/CSU states.

Scholz and his allies have repeatedly rejected such criticism as politically motivated and stressed that past investigations found no wrongdoing. Scholz also highlighted that in the end, the bank did repay the €47 million, albeit only after it was ordered to do so by a court. The Hamburg Public Prosecutor's Office said in March that it does not see any initial suspicion against the chancellor in the affair.

That hasn't discouraged the opposition from planning to dig deeper, though.

“The chancellor would like to see … a line drawn under the clarification of this tax affair. But it is precisely the task of parliament to control the government, to look closely, especially with so many unanswered questions,” said CDU lawmaker Matthias Hauer.

Newsletter

Related Articles

0:00
0:00
Close
EU Relocates Summit to Punish Hungary over Orban's Ukraine Visit
World's Hottest Day Recorded on July 21
President Biden Returns to White House After Testing COVID Negative
Thousands Protest in Mallorca Against Mass Tourism
Hacking Vulnerabilities: Androids vs. iPhones
Ukraine Crisis Should Be EU's Responsibility, Says Trump’s Envoy
Joe Biden Withdraws from 2024 US Presidential Race
A Week of Turmoil: Key Moments in US Politics
Erdogan Challenges NATO Stance at 75th Anniversary Meeting
Hungary's Orban Shakes Up EU Leadership
German National Sentenced to Death in Belarus
Elon Musk's Companies Drop CrowdStrike After Global Windows 10 Outage
Trump Pledges to End Ukraine Conflict if Reelected
Global IT Outage Unveils Digital Vulnerabilities
US Criticizes International Court's Opinion on Israeli Occupation
EU’s Patronizing Attitude Towards Africa Revealed
Ukraine to Receive First One and a Half Billion Dollars of Seized Russian Funds
Netanyahu Denounces World Court Ruling on Israeli Occupation
Massive Flight Cancellations Across the U.S. Due to Microsoft Outage
Russia Accuses Ukraine of Using Chemical Weapons
Ursula von der Leyen Wins Second Term as European Commission President
Police Officer Injured in Attack in Central Paris
Record Heat Temperatures in Ukraine Amid Power Crisis
Japan to Allocate $3.3 Billion to Ukraine Using Frozen Russian Assets
EU Parliament Condemns Hungarian PM's Russia Visit
FBI Struggles to Find Motive Behind Trump Shooting Incident
Kremlin Criticizes EU Rejection of Orban’s Ukraine Peace Proposal
Russia's Electronic Warfare Neutralizes Western Weapons in Ukraine
Trump Challenges Biden to Debate and Golf Match
Macron Accuses Israeli Minister of Election Interference
US Senator Highlights Weaknesses in Western Military Industry During Ukraine Conflict
George Clooney Urges Biden to Withdraw from Presidential Race
Political Shift in the UK: A Detailed Analysis of Labour's Victory and Future Prospects
Viktor Orbán's Peace Mission: A Diplomatic Controversy in the EU
India Advocates Peace and Prosperity: PM Modi's Speech in Austria
New UK PM Keir Starmer Reaffirms Strong Support for Ukraine at NATO Summit
Spain PM Pedro Sanchez Denounces Double Standards on Gaza at NATO Summit
Sunita Williams Safe on ISS, to Address Earth on July 10
Biden Affirms Commitment To Presidential Race
France Faces Political Turmoil and Airport Strikes Ahead of Paris Olympics 2024
Putin Hosts PM Modi for a Private Meeting
Boeing Pleads Guilty Over 737 MAX Crashes
2024 Predicted to Be World's Hottest Year
White House Denies Biden Being Treated for Parkinson's Disease
Biden to Meet New UK Prime Minister Keir Starmer
Biden Insists on Continuing Presidential Race Amid Criticism
UK Defence Minister Pledges Enhanced Support to Ukraine
French Prime Minister Gabriel Attal Resigns After Election Setback
Macron Faces New Political Challenges Despite Election Relief
France's Far-Right Falls Short in Parliamentary Elections
×