The trial of Antoine Deltour, Raphael Halet, and Edouard Perrin opens today in Luxembourg. Reporters should mob the courtroom. Camera crews should block the streets outside. I cannot think of a more important case, or one that reveals more clearly how tax havens punish those who reveal injustice rather than those in multinational businesses and accountancy firms who are – oh, how can I put this without troubling the legal department? – who are, shall we say, content that the authorities do not apply the same level of scrutiny to them.
After the Panama leak revealed how dictatorships and organised crime, along with less colourful evaders and avoiders flourished, let us hope that the Luxembourg trial gets the publicity it so richly deserves, and prompts a global campaign against this equally piratical statelet.
Deltour anticipated the Panama scandal. He is a polite, moral man, who had never sought publicity let alone payment for his story. In 2010, Deltour worked with PwC’s Luxembourg office and ‘discovered the reality of the system’. PwC was engaged in a ‘massive practice’ of limiting multinationals exposure to tax. He copied documents and left the firm to work as a civil servant in Nancy in his native France. ‘I acted by conviction, for my ideas, not because I wanted to be in the media,’ he said later.
He should be all over the media by tonight. In 2012, along with my friend and comrade Richard Brooks of Private Eye, he helped the second defendant, the French journalist Edouard Perrin, show how PwC connived with the Luxembourg government to allow multinationals to escape the taxes that you and I, dear reader, have no choice but to pay.
In 2014, the International Consortium of Investigative Journalists, which coordinated the global release of the Panama papers, followed up Perrin’s documentary for French TV with the release of 28,000 pages of ‘Luxleak’ documents showing how Pepsi, Ikea, AIG, Coach, Deutsche Bank, Abbott Laboratories and nearly 340 other companies had secret deals with Luxembourg.
Almost 28,000 tax rulings, returns and other sensitive documents from PwC were published in all. They disclosed that the Luxembourg authorities had helped cut tax payments on multinational profits to 1 percent.
The third defendant Raphael Halet, a former worker at PwC, was not named until this week, and we have to wait for the trial to find out what charges the Dodgy Duchy has laid against him.
But three points are clear already.
First, Luxembourg has no proper boundary between corporate interest and public interest. Just as the Luxembourg state cut sweetheart deals with PwC to allow multinationals to avoid tax, so the Luxembourg state is prosecuting the whistle-blowers at PwC’s behest. PwC made the initial complaint in 2012, after Perrin’s documentary was broadcast. Luxembourg brought charges in 2014, after the second set of ‘Luxleaks’.
Second, the whistle-blowers and journalist face ferocious criminal sanctions for embarrassing an accounting conglomerate and its clients. If an accountancy firm cannot convince its staff it is a moral organisation worthy of respect, that is the accountants’ problem. But in Luxembourg, where the state and the tax industry are one, it becomes a criminal matter.
Deltour alone faces charges of theft, violating Luxembourg’s professional secrecy laws, violation of trade secrets, and illegally accessing a database. If found guilty, the court could give him up to ten years in jail and a fine of up to €1,250,000.
Third, the whistle-blowers were acting in the public interest. Yes, thank you, I know journalists always say that anything we want to print is in the public interest. But in this instance I can prove it. Public authorities across Europe and beyond used the leaks as a reason to begin inquiries into multinationals diverting profits through tax havens.
They made the European Parliament question the suitability of having Jean-Claude Juncker as president of the European Commission, given that Junker was the prime minister of Luxembourg at the time the duchy moved into tax avoidance. Pierre Moscovici, the European Commissioner for financial affairs, admitted the leaks showed that ‘corporate taxation needs radical reform’, while the UK Parliament’s Public Accounts Committee said they showed PwC was ‘selling tax avoidance on an industrial scale’.
If public bodies change laws because of a revelation, then by definition that revelation is in the public interest.
After the Panama leak Francois Hollande, president of Antoine Deltour’s and Edouard Perrin’s France, gushed his praise for the whistle-blowers who had blown the secrets of Mossack Fonseca & Co. ‘They take risks and they have to be protected,’ he cried.
We don’t know the names of the Panama leakers, but we do know that Antoine Deltour, Raphael Halet, and Edouard Perrin have not been protected for taking risks on our behalf. They face up to 10 years in prison instead.
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