Thursday

22nd Feb 2018

Redacted tax fraud report poses questions on Juncker

  • Juncker last week said he wasn't aware of any missing page (Photo: ec.europa.eu)

A missing page from an 18-year old report is casting a shadow over the European Commission president’s alleged role in corporate tax avoidance schemes.

Sweetheart tax deals in Luxembourg enabled some 340 multinationals to legally divert hundreds of billions of euros away from national coffers elsewhere.

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Designed by big accountancy firms like PricewaterhouseCoopers (PwC), at least 548 were set up between 2002 and 2010, when Jean-Claude Junker presided over the Grand Duchy as its prime minister and finance minister.

But Juncker has consistently denied any role in the matter despite making claims in 2004 that he had “personally lobbied for these companies to choose Luxembourg as a European base”.

He had also in 2004 taken partial credit for attracting big firms like Amazon, AOL, and Microsoft to set up offices in his home state. Amazon has since become part of a broader probe by EU regulators into the Duchy’s low tax arrangements.

Last week, he told skeptical MEPs in the special committee on tax that they were exaggerating his “political talent in that respect.”

But a report on fiscal fraud by Luxembourg’s former economic minister and Juncker’s political rival Jeannot Krecke is rousing fresh suspicion.

The 239-page report recommended to step up audits on tax rulings. It was released to the public a few months after Juncker became PM in December 1996.

Krecke at the time had a one page on tax rulings - deemed too sensitive for public disclosure - removed before it went public.

“My decision [to redact the page] was based on the fact that I did not find it appropriate to launch an international discussion on tax rulings during our presidency”, he said in an email, seen by this website, to Fabio de Masi, a German MEP from the United Left.

Only three copies of the full report were handed out. One of those went to Juncker.

De Masi asked Juncker at a special committee hearing on 17 September to produce the missing page to help them in their broader inquiry.

But Juncker told the MEP he didn’t know anything about the report.

“And, actually, I don’t have that documentation in my cellar and I’m also not going to go in my cellar with you to go and look for it”, he said.

Krecke says he handed Juncker the full report in 1997 and then once again after the committee hearing.

“After the hearing at the European Parliament, I gave once again a version of the personal report to Mr. Juncker, as obviously he did not have any more this version”, he said.

Krecke also told a journalist from Luxembourg in an interview that he had handed Juncker a complete version of the report just before the same hearing on 17 September.

Asked to comment, Juncker’s spokesperson Margaritis Schinas on Monday (28 September) said it was up to Krecke to produce the missing page.

“If you are asking me if Mr Juncker has anything to say about the missing part, well it is up to the author to answer this question”, said Schinas.

Krecke, for his part, has declined.

Juncker denies role in tax scams

EU Commission chief Juncker says he had nothing to do with Luxembourg's sweetheart tax deals in his time as PM of the microstate.

Poland shows no sign of concessions to Commission

While the dialogue between Warsaw and the Commission has improved since new prime minister Mateusz Morawiecki entered office, there is no sign of compromise over rule of law concerns - as the clock ticks towards a March deadline.

MPs demand Council become more transparent

Three Dutch MPs, on behalf of 26 national parliamentary chambers across the EU, are demanding more transparency. 'The Eurogroup is the most opaque of them all,' complained Dutch MP Omtzigt.

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