Saturday

22nd Jul 2017

LuxLeaks whistleblowers sentenced again

  • Supporters of whistleblower Antoine Deltour. The LuxLeaks case had been presented as a showcase by transparency and anti-tax evasion activists. (Photo: Mélanie Poulain)

LuxLeaks whistleblowers were convicted again by Luxembourg's court of appeal on Wednesday (15 March) but with reduced sentences compared to the first verdict.

Antoine Deltour, a former PricewaterhouseCoopers (PwC) employee who leaked documents showing how the company helped multinational companies to evade tax in the Grand Duchy of Luxembourg, was given a 6-month suspended sentence and fined €1,500.

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  • Deltour (r) got a 6-month suspended sentence. (Photo: European Parliament)

Raphael Halet, another PwC employee who had helped Deltour, was fined €1,000. 

After the first trial last year, Deltour received a 12-month suspended sentence and a fine of €1,500. Halet was fined €1,000 and given a nine-month suspended sentence.

Edouard Perrin, a journalist who had revealed the tax evasion scheme in a programme on French TV in 2012, was acquitted for the second time.

Both Deltour and Halet were convicted of theft of tax rulings and computer fraud. Both were cleared of the charge of trade secret violation.

Halet was convicted of violating professional confidentiality, while Deltour was cleared of the charge thanks to his whistleblower status.

The court had recognised Deltour and Halet's whistleblower status but had noted that it did not protect them under national or European law.

"This disappointing judgment constitutes an additional argument for going ahead with recent European initiatives towards whistleblowers’ protection," Antoine Deltour said in a statement published by the defendants' support committee after the verdict.

The group, Support Antoine, said that the court's decision presented "a disturbing contradiction".

"It recognizes the whistleblower’s role and the public interest of the revelations but anyhow concludes on a condemnation," it said in the statement.

"Once again, private financial interests seem to take priority over the collective interest and the rights for information."

Activists have used the LuxLeaks case to showcase the need for more transparency and anti-tax evasion measures. Whistleblower protection has been a main focus.

LuxLeaks revelations

PwC first filed a complaint after the first revelations in 2012. But further revelations by a network of newspapers in the so-called LuxLeaks project in 2014 showed the extent of the tax evasion schemes uncovered by Deltour and Halet.

The LuxLeaks revelations showed how tax rulings allowed more than 300 companies to pay almost no taxes in Luxembourg, using it as a tax haven to avoid paying billions of taxes in other countries where these companies also operate.

The revelations came just after Jean-Claude Juncker, the longstanding prime minister of the Grand Duchy who reigned during the time the tax rulings were developed, became president of the European Commission.

The extent of the revelations, after several years of financial and economic crisis, pushed the EU executive led by Juncker as well as member states to propose and adopt tighter rules on tax evasion and tax fraud.

Molly Scott Cato, a British Green MEP, said on Wednesday that without Deltour and Halet's revelations, "the significant tax reforms that are now being agreed by the EU institutions would not have happened".

She said that "the LuxLeaks scandal highlights the need for tax rulings to be made public and for companies to be obliged to publicly disclose where they do business. It also draws attention to the urgency of making progress with EU-wide whistleblower protection legislation."

While "corporate tax dodging is costing billions of euros every year," whistleblowers like Deltour and Halet "deserve praise, not punishment", said Tove Maria Ryding from the European Network on Debt and Development (Eurodad).

"It is scandalous that those who did an invaluable service to society, risking their careers, have again been found guilty while the rich and powerful rob hundreds of billions of euros from citizens," said radical-left MEP Fabio De Masi, who is vice-chair of the European Parliament’s inquiry committee for Panama Papers, another raft of revelations on tax evasion practices.

The LuxLeaks revelations also triggered a special committee in the parliament, to shed light on tax rulings in Europe.

Its chair, French center-right MEP Alain Lamassoure told MEPs on Tuesday that "fair competition and tax justice" were making progress but three conditions were needed to address citizens' demands for more transparency.

He said that corporate tax systems in Europe have to be harmonised, through the so-called common consolidated corporate tax base (CCCTB) scheme that is still under discussion.

He also said that whistleblowers should be granted Europe-wide protection.

The third condition, he added, is that EU finance ministers politically back the Code of Conduct Group, a body set up in the EU council to work on preventing harmful tax competition.

LuxLeaks whistleblowers fined and put on probation

Antoine Deltour and Raphael Halet, former employees at PricewaterhouseCoopers (PwC) who revealed how corporations hid away profits, were fined and given suspended sentences by a court in Luxembourg.

LuxLeaks trial to be whistleblower showcase

The trial of Antoine Deltour, who leaked documents on Luxembourg's sweetheart tax deals with big firms, will be used by campaigners and politicians to push for a law to protect whistleblowers.

LuxLeaks forces discussion on EU-wide protections

LuxLeak whistleblower Antoine Deltour is urging justice ministers to help put in place rules to protect people across Europe who leak confidential information for the public good.

Investigation

Mafia money pollutes the EU economy

Huge amounts of money from criminal activities are funnelled into the legitimate European economy. But little is being done about it at EU or national level.

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