It rarely happens that a lobby association receives a visit from the police. And mostly it’s about infidelity in your own ranks. But raids on Tuesday in the offices of the Federal Association of German Banks were about much more: possible entanglements in the biggest tax scandal in post-war history. “It is true that the public prosecutor’s office in Cologne is investigating cum-ex proceedings in our offices in Berlin and Frankfurt,” the lobby association confirmed, according to media reports, and immediately assured that the investigation was not directed against the banking association itself.
A legal loophole made it possible for the cum-ex deals to make it easier to reimburse a capital gains tax once paid. Experts estimate the damage incurred at twelve billion euros. Numerous banks, celebrities and investors were involved in the scandal. The gap was only closed in 2012. “Not only the Cum Ex tax dealings were criminal. It was also criminal to keep the cum-ex-loophole open for over a decade and expand it under the influence of the banking lobby, «said Fabio De Masi, deputy chairman of the parliamentary group on the left in the Bundestag.
According to media reports, the investigators suspect that suspects in several proceedings through the association tried to influence laws in their favor. The raids were intended to secure evidence of this. Already in a committee of inquiry of the Bundestag it became clear that the banking association played a shady role in the scandal. The lobby organization made the responsible Federal Ministry of Finance aware of the legal loophole and immediately provided a wording that was taken over almost word for word in 2007 and was supposed to close the loophole. However, the deals were still possible if a foreign bank was interposed.
“Cum Ex was not ended with this change in law, on the contrary: criminal business with billions in damage for taxpayers increased drastically,” said Konrad Duffy of the citizens’ movement Finanzwende. In addition, a former finance judge who worked in the Ministry of Finance and had a major influence on legislation received funds from the banking association. Commentary on page 10