German oppostion files complaint over Scholz's tax fraud inquiry
Germany's CDU faction has lodged a complaint with the top court against the ruling coalition for rejecting their request to establish a special committee to investigate Chancellor Olaf Scholz's involvement in a tax fraud affair.
The German Christian Democratic Union (CDU) opposition party has taken the initiative to file a complaint with the country's top court concerning Chancellor Olaf Scholz's handling of a tax fraud affair dating back to his time as mayor of Hamburg after the ruling coalition rejected their bid to establish a special committee tasked with investigating the matter, Sputnik reported.
The CDU's complaint, as disclosed by German broadcaster ARD, centers on their argument that the government's refusal to allow a committee of inquiry to scrutinize Chancellor Scholz's meetings with executives from the embattled Warburg Bank in 2016 and 2017 represents a breach of federal parliamentarians' rights.
These committees of inquiry are typically formed through a motion supported by at least a quarter of all federal parliament members and are designed to investigate alleged mismanagement at the federal level. However, the coalition contends that the tax fraud scandal falls within the purview of Hamburg state authorities.
The controversy revolves around Hamburg-based Warburg Bank's alleged involvement in defrauding German taxpayers of millions of euros through the manipulation of tax refunds for share traders, a scheme commonly known as "cum-ex dividend."
Initially, Hamburg officials attempted to compel the bank to repay 47 million euros ($51 million) in tax refunds. However, these demands were later abandoned following reports of a purported meeting between then-Mayor Olaf Scholz and the bank's executives, with officials citing an expired statute of limitations as the reason.
Chancellor Scholz has maintained that he does not recall the specifics of what transpired during these meetings but can confirm their occurrence because they were duly recorded in his calendar. Nevertheless, multiple reports and leaked emails originating from his Hamburg office have raised doubts about the veracity of the calendar entries.
In 2018, the media in Germany exposed the cum-ex scheme, which exploited a loophole in dividend payments to enable multiple returns of capital gains tax. One of the beneficiaries, the Hamburg-based Warburg Bank, was found to have misappropriated 47 million euros ($52 million) in 2009 through cum-ex deals.
Scholz, the former mayor and chairman of the then-ruling Social Democratic Party in Hamburg, allegedly had meetings with the bank's co-owners in 2016-2017 and advised them on avoiding refunds of the misappropriated funds. While Scholz admitted to meetings with Max Warburg and Christian Olearius, he claimed not to remember the content of their discussions.
However, an email from Scholz's former office chief Jeanette Schwamberger to his current chief of staff, Wolfgang Schmidt, revealed that there was no scheduled meeting with Olearius on Scholz's calendar in 2017, according to the German publication Stern.
Schwamberger's email expressed frustration and disbelief at the absence of any records for the meeting. Schmidt responded by affirming that the meeting had indeed taken place in November 2017.
Scholz maintained that he had no political influence on tax refunds during that time. Nevertheless, it appeared that he did not note the meeting with the bankers on his business calendar and only attempted to rectify this later, Stern reported.