May 032015
 

By J Iddhis Bing, 99GetSmart

J.J. Grandville and Eugène-Hippolyte Forest, 0ctober, 1832.

J.J. Grandville and Eugène-Hippolyte Forest, 0ctober, 1832.

In late April Luxembourg’s public prosecutors indicted a French journalist (without naming him publicly) for his widely-followed reports on tax evasion.

99GetSmart readers are familiar with the scandal now known as LuxLeaks. In fact, readers here knew about it more than a year before the readers of the Guardian, ICIJ, et al. I worked with the mentioned “French journalist” to present his findings to English-language readers. His documentaries evidently got some attention, enough to cause hearings in Parliament and furious denials from the Duchy.

Earlier this year the Valls government in France abandoned its efforts to pass a “business secrets” act that would have enacted draconian punishments on whistle blowers and reporters with evidence of malfeasance in the private sector.

Edouard Perrin has won several awards for his documentaries. He covered Egypt and Libya during the uprisings, and is best known for his work in the burgeoning field of tax evasion. He’s one of the many hard-working journalists who operate just below the radar, compiling massive amounts of data on stories before they enter the general consciousness, making contacts and generally staying out of sight. Not so any longer.

On Thursday the grand Duchy of Luxembourg bestowed its highest honor on Perrin. Its prosecutors indicted him.

How to find your way around Luxembourg.

How to find your way around Luxembourg.

Antoine Deltour was the first person charged by Luxembourg as a source for documents from Price Waterhouse Coopers, the accounting firm that, in league with Luxembourg government officials, ennabled corporations such as the Big Friendlies – Google, Amazon, Pearson and hundreds of others – to evade taxes in their countries of operation by renting a mailbox in Luxembourg City and calling it their business headquarters. This arrangement is rife around the world – Apple employing the fiction that it is domiciled in Ireland comes to mind – and helps companies pay taxes in the country that offers the best deal regardless of where they are actually located. Nevertheless it is against the law, violates the rules of organizations such as the OECD and certainly spits inthe face of the European Union, despite the innocent, laissez-faire spin a small country such as Luxembourg puts on it.

All this is now known by almost everyone because a small number of journalists like Nicholas Shaxson and Ed Perrin compiled the data. The EU’s inability to take action with these scofflaws remains disturbing and inexplicable.

Deltour has confessed to providing documents to journalists. He seems overwhelmed and intimidated, what with the full weight of his country’s legal system coming down on him.

There is a second source for the Price Waterhouse Coopers documents, as yet unnamed. Thursday’s indictment seems to be an attempt to drive a wedge between journalist and source, intimating that Perrin did not limit “his role… to receiving information offered by the indicted but, to the contrary, directed that person in gathering documents which particularly interested him. The journalist would therefore have played a more active role in the commission of these crimes.”

Jean-Claude Juncker’s 18-year reign in Luxembourg ended in July 2013, when his entire government resigned in the midst of a spy scandal that implicated not only Juncker and his government but Grand Duke Henri was well. (Yes, little Luxembourg has a Grand Duke.) Juncker wasn’t out of work for long. In the stalemate after the poorly attended European elections in November last year, with no candidate having a clear majority, Juncker emerged as the compromise. He was vociferously opposed by David Cameron and quietly by France. (Le Monde’s journos boasted they would take care of him tout de suite.) But there he sits at the head of one branch of European governance. Somebody or bodies obviously wanted him in.

It  stretches credulity to suggest that Luxembourg’s happy Tax Paradise took place without Juncker’s blessing.

While this indictment certainly is a threat, it also helps to keep the issue in front of the public and very much alive. That it takes place during a repressive time, with journalists in record numbers in jails around the world, is a given.

 

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  One Response to “A Rogue State in the Heart of Europe”

  1. Is it possible that many European politicians have private offshore banking deposits in Luxembourg and how many does Mr Juncker know about ? If that should be the case then what pressure could he bring to bear on those individuals ?

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