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Of Luxembourg, London and Paris, and a Lady Named Merkiavelli

4:01 pm in Uncategorized by GREYDOG

By Iddhis Bing, 99GetSmart


Angela Merkel hits back at #donttellmerkel campaign by telling the Irish / Spanish / Greeks to “Get back to work!” via @COYBIG

Angela Merkel hits back at #donttellmerkel campaign by telling the Irish / Spanish / Greeks to “Get back to work!” via @COYBIG

Invisible Money 4

At the end of Invisible Money 3, the ink was drying on the latest tax evasion scheme in Marius Kohl’s office at 18, rue du Fort Wedell in Luxembourg’s capital. Kohl, head of the tax bureau at Sociétés 6, was formalizing the tax deal for the world’s third largest pharmaceutical company, GlaxoSmithKline. He and the Bureau d’Impots are happy to provide fast service for an untold number of companies – Amazon, Google, The Guardian (yes, that Guardian, through the Eden Company), iTunes, Procter & Gamble among them. His is a busy trade and still very much ongoing in luxurious Luxembourg, which profits from structural loopholes in antiquated European tax law. 40,000 pages of such instances give some hint of how widespread the tax avoidance business is.

Marius Kohl is the head of a department in a small government apparatus dedicated to tax affairs. But he is not the man who sets the policy. He has bosses above him who do that, persons readers will soon know more about. Because if Marius Kohl ever deviated from considered policy, if his actions were at variance from his superiors’ dictats, Marius Kohl would be gone at the end of the day, whether he approved a new set of origami organizations or not.

Let’s freeze Marius Kohl with his pen an instant away from signing on to yet another fictive, intracompany entity. We’ll leave him right where he is, while we turn around to take a quick look at the landscape in which Luxembourg operates, a landscape which makes Luxembourg possible.

It has been a busy month or so in politics and on the tax/debt front. Are the two inextricably linked? Of course they are. “The fact that many men are occupied in making clothes for one individual is the reason so many others go without.” Does that make sense?

In Athens in October, protesters greeted Angela Merkel with a banner in front of Parliament that read “Angela weine nicht. Da ist nichts im Shrank, was zu holen wäre” – “Don’t cry, Angela. There’s nothing left in the cupboard for you to take.” The line is originally Bertolt Brecht’s.

Is Chancellor Merkel the uncrowned Queen of Europe? Europeans might be forgiven for thinking she is. So when Ulrich Beck, a German sociologist, published an article last week depicting Merkel as a devoted student of Machiavelli, it was widely read across the continent and gave rise to a new moniker for Germany’s leader: Merkiavelli. The empress has a new set of clothes.

Beck argues that Merkel must walk the fine line between being loved at home – enough to be reëlected – and loathed outside Germany – but not so loathed as to be detested and lose her preëminence. “Merkiavelli’s power rests upon the desire to do nothing, her penchant for avoiding action, acting later, hesitating. This art of selective delay, a mixture of indifference, a refusal of Europe and European engagement, is the source of Germany’s powerful position in a continent stumbling through the crisis.”

“Madame Merkel prefers – and this is the full Machiavellian irony of her position – to make the willingness of Germany to provide assistance to indebted countries dependent upon their acceptance of the German policy of stability.”

“Politically, inside Germany the Chancellor reassures Germans, who fear for their retirement, their little house and their economic miracle, and with a very Protestant rigor she defends the politics of No in measured doses, all so that she gives the appearance of being the one instructor at school capable of teaching Europe a lesson.”

“The more Germans become critical with respect to Europe, the more they feel encircled by countries peopled with debtors who only want to get their hands into German wallets, the more difficult it will be to maintain her two positions.”
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Some Get Prizes, Others Jail: Kostas Vaxevanis and a Tale of Two Reporters

7:44 am in Uncategorized by GREYDOG

Kostas Vaxevanis

Greek journalist Kostas Vaxevanis, arrested for revealing names of wealthy tax evaders

On the evening of October 27, the Greek journalist Kostas Vaxevanis was awakened by police who arrested him and hauled him off to jail. The charge? Hot Doc, the magazine he writes for and edits, published portions of the  ‘‘Lagarde List” containing the names of 2,059 Greeks who allegedly spirited money out of the country and into the warm embrace of UK-based HSBC’s Swiss offices.

Vaxevanis was charged with the publication of private data, although only names, and not account numbers or amounts, were listed. Vaxevanis did not allege that anyone on the list was guilty of a crime, merely that an investigation into the matter was in order. The List  has been the talk of Greece, although not its newspapers, for months.

Interestingly, a website run by Makis Triantafillopoulos (, published the same list just hours before Hot Doc. No arrests have been made in that case. Triantafillopoulos is widely regarded as having close ties to Greece’s ruling class.

The Lagarde List has a fascinating if brief history. Compiled by Christine Lagarde when she was Finance Minister in the Sarkozy Government, it is said to contain the names of over 22,000 individuals with hidden accounts from across Europe. It was given by Lagarde to members of the Greek government in 2010 and promptly ‘‘lost.” Since then, officials in Greece have been scrambling to find it. Several ministers claim they gave it to another minister in another department…

Since publication of the list on Friday, two men whose names appear on it, Leonidas Tzanis, a former Greek minister who had been under investigation, and Vlassis Kambouroglou, a wealthy businessman in the defense industry, have turned up dead, both apparent suicides.

Kostas Vaxevanis was released from jail on Monday, October 29.

Meanwhile, in France, with la rentrée in full swing, the season of awards is upon us.

The prestigious 2012 Louise Weiss Award for European Journalism has been given to Edouard Perrin for his film Les petits secrets des grandes entreprises. The TV2 documentary was made in conjunction with Panorama, the investigative magazine of BBC1, and is the basis for the Invisible Money series on GroundReport.

According to the prize committee, the documentary, which aired on May 11, 2012 is ‘‘an unprecedented investigation which revealed in copious detail the methods used to achieve what is shamefully called ‘fiscal optimisation.’ ”

The TV2 team had this to say upon receiving the award:

‘‘We  were able to successfully reveal the opaque legal arrangements by which a multitude of large corporations subtract billions of Euros from their tax declarations. The investigation depicted in detail how this takes place with the complicity of Luxembourg’s government. We remain disappointed by the silence of our governments in dealing with the practices we revealed.”

On an angrier note, the documentarian Paul Moreira had this to say on his Facebook page: “I’m pissed. Edouard Perrin’s stunning investigation wins the Louise Weiss Prize and the Budget Ministry completely fails to react… Edouard showed how large European companies avoid paying taxes… We’re not talking about peanuts but tens of billions of Euros. It could give the Budget Ministry a few ideas. Obviously, it would require being a bit rude with the Luxembourgeois, who are, as everyone knows, people with impeccable manners.”

Two journalists, two wildly different scenarios for what are, essentially, facets of the same story – a story Europe’s leaders find simply too hot to touch, let alone discuss publicly. Vaxevanis could not ask for better publicity: his magazine is now known around the world. Perrin did a lot of work the old fashioned way, door to door, office to office, and he nailed the perpetrators in copious detail. Hats off to both gentlemen. Neither story is about to go away.

 By Iddhis Bing99GetSmart under Creative Commons license