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Germany’s Scholz grilled for tax evasion scandal

#Germanys #Scholz #grilled #tax #evasion #scandal

Chancellor Olaf Scholz is due to answer before a committee on Friday as part of the investigation into a financial scandal that has cost the government billions, while the leader struggles to allay suspicions about his possible role in the huge tax fraud.

Scholz will testify for the second time before the Bundestag committee in Hamburg, which is examining whether local politicians helped a bank avoid paying back incorrectly claimed tax refunds.

Scholz was mayor of Hamburg from 2011 to 2018, then finance minister in the cabinet of then Chancellor Angela Merkel.

The “Cum-Ex” scam, first uncovered in 2017, involved numerous participants who quickly swapped company shares with each other on dividend day to receive multiple tax refunds for a single payout.

In Germany, dozens of people have been charged over the scandal, including bankers, stock traders, lawyers and financial advisers.

The Hamburg committee is investigating why local tax authorities dropped a 2016 request to reclaim 47 million euros ($48 million) in taxes from private bank MM Warburg over cum-ex deals.

Under pressure from Merkel’s federal government, the bank finally had to pay back amounts in the double-digit millions.

According to German media reports, investigators have examined emails from the account that Scholz used in connection with the scandal during his time as Hamburg mayor.

– ‘No findings on political influence’ –

The Hamburg barbecue comes as Scholz is already facing dismal popularity ratings after his first six months in office were marred by criticism of his perceived weak response to the war in Ukraine.

More recently, the Chancellor also sought to reassure Germans amid possible energy shortages this winter and the very real prospect of a recession in Europe’s largest economy.

Scholz also faced a backlash this week for failing to immediately condemn Palestinian President Mahmoud Abbas’ comments made in Berlin on the Holocaust.

Scholz spokesman Steffen Hebestreit assured journalists on Wednesday that the chancellor would answer all of the committee’s questions and would have nothing to hide.

When asked about the scandal itself, Scholz said at a summer press conference last week that he had “spoken very extensively and for many hours on these things and will do so again”.

“A huge number of hearings, a huge number of files have brought only one result: There is no evidence of political influence,” he said.

But rumors are circulating that the decision to let Warburg off the hook came shortly after a conversation between Scholz and the then bank boss Christian Olearius.

Scholz has denied pressuring Hamburg’s tax authorities over Warburg’s cum-ex activities, but new allegations in recent days claim he may be hiding something else.

According to several German media reports, investigators have confiscated emails from Scholz’s former office manager, Jeanette Schwamberger, which could bring new evidence to light.

– cash stash –

These emails are, according to the reports, “potentially evidentiary as they prompt deliberations about deleting data.”

The Frankfurter Allgemeine Zeitung said the emails clearly “incriminated” Scholz.

Other newly seized documents reportedly indicate that Scholz, contrary to his previous claims, raised the issue of reimbursement directly with Olearius.

These latest revelations suggest that Scholz and his people “were trying to give only limited information about specific meetings or phone calls,” said Matthias Hauer, an opposition Conservative MP.

The Hamburg investigation is also investigating former SPD MP Johannes Kahrs.

According to the German media, investigators recently found around 200,000 euros in cash in a Kahrs safe deposit box, although it is unclear whether the find has anything to do with the cum-ex scandal.

When asked about the cash at the summer press conference, Scholz said: “I’m just as curious as you are, and of course I’d like to know where it came from.”

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#Germanys #Scholz #grilled #tax #evasion #scandal

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