Subscribe to our free daily newsletters
. Military Space News .

Subscribe to our free daily newsletters

Analysis: Spy agency hunts tax evaders

disclaimer: image is for illustration purposes only
by Stefan Nicola
Berlin (UPI) Feb 19, 2008
A German spy agency has paid a secret informant some $7.3 million for a CD containing incriminating data on rich Germans who transferred billions to nearby Lichtenstein to avoid taxes. It's the biggest blow against tax fraud in Germany, and the first that has the country's intelligence agency involved.

What reads like a spy novel has led to the arrest of Deutsche Post head Klaus Zumwinkel (who since stepped down), so far the most prominent, but reportedly only one of hundreds of suspects who are accused of having used banks in the small and discreet tax haven Lichtenstein to forgo German tax claims. The arrest of Zumwinkel, who is accused of having evaded $1.5 million in taxes, has shocked the country as the former Post manager had previously been regarded as one of Germany's most respected chief executive officers.

The infamous CD is believed to contain evidence on several billions that have been funneled through Lichtenstein banks and bogus charities. Police on Monday and Tuesday embarked on nationwide raids that included homes and offices in Munich, Hamburg, Frankfurt and Ulm. In total, some 900 properties will be searched over the coming days.

What makes this case special is the fact that Germany's Federal Intelligence Service, or BND, was intimately involved in the investigation. The BND has managed to recruit excellent sources within Lichtenstein banks and has been conducting espionage operations in the principality since the beginning of the decade, the Berliner Zeitung newspaper reported.

The BND also mediated the German Finance Ministry's $7.3 million acquisition of the CD from a former employee of the LGT Group -- a Liechtenstein bank owned by the country's ruling family, the Financial Times reported.

While the Finance Ministry defends the deal, saying it will result in several hundred millions of dollars in back payments, the sale remains controversial, as a government agency has paid for possibly stolen data.

Ferdinand von Schirach, a lawyer, told German news channel n-tv the move was legally highly questionable.

"The German government has used tax money to pay for a crime by a citizen of Lichtenstein. That can't be. That's illegal."

Lichtenstein's ruling Prince Hans-Adam II has also harshly attacked the German government for what he feels was an "attack" on his principality.

"Germany with its attack on Lichtenstein does not solve the problems it has with its tax payers," he said, adding that paying a criminal for stolen data was against the law.

Lichtenstein, a landlocked alpine principality with just 35,000 citizens, has made a name for itself as a discreet tax haven. Bordered by Switzerland to its west and by Austria to its east, Lichtenstein is one of the few countries in the world with more registered companies than citizens and has, like Switzerland, laws that protect bank customers from outside governments.

That irritates Germany's conservatives.

"It's simply unacceptable to have tax havens in Europe that encourage capital flight and incite tax fraud," Ronald Pofalla, a senior conservative, told a Berlin news conference. "We must ensure that such refuges are shut."

German Chancellor Angela Merkel said she would urge Liechtenstein's Prime Minister Otmar Hasler to introduce greater transparency in Lichtenstein on financial issues. Hasler is due to arrive in Berlin Wednesday.

"The country's reputation is at stake," Merkel Monday told the foreign press corps in Berlin. She also acknowledged that Lichtenstein had made progress over the past years, adding that this "gives me hope that we can sort out what is outstanding."

Email This Article
Comment On This Article

Related Links
Cyberwar - Internet Security News - Systems and Policy Issues

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Analysis: Terrorist use of the Internet

Lawmakers in the United States and elsewhere should not to try to censor Islamic extremists' use of the Internet, says a new report from a global think tank.

  • Analysis: India's Asian Security plan
  • Outside View: Russia, NATO sea moves
  • China tells US to drop Cold War attitude after 'spy' arrests
  • Russian military's roar is hollow: analysts

  • No progress in NKorea nuke talks: US envoy Hill
  • Analysis: Iran, Russia: Friends or rivals?
  • Indian official warns over Pakistan nukes: report
  • Urgent Need For Nuclear Detectives

  • AIM-9X Enters The US Navy's Weapons System User Program
  • India to test submarine-based missile
  • Lockheed Martin Receives New Contract For Army Tactical Missile System
  • France And US Sign Agreement For Sale Of Lockheed Martin Hellfire II Missiles

  • Missile Defense Globally Protects Against Toxic Satellite
  • Raytheon Finishes 2007 With Two Patriot Awards Totaling 377 Million USD
  • Only NKorean missile can 'wake up' Japan, says Tokyo governor
  • MEADS Passes PDR Milestone

  • All-star line-up at first Singapore Airshow
  • Military Aircraft To Perform Aviation Safety Research
  • Flapping-wing airplanes are envisioned
  • British-designed jet could reach Australia in under five hours

  • Boeing-Insitu ScanEagle UAV Achieves 10,000 Flight Hours In Support Of Australian Army Operations
  • Northrop Grumman's Global Hawk UAS Surpasses Expectations, Establishes Delivery Record In 2007
  • Iraq War See Widespread Use Of Unmanned Air Vehicles
  • BAE Systems Delivers UAV Target Detection Systems To US Army

  • Outside View: Beware of Iran's trap
  • Feature: Al-Qaida feels pressure in Iraq
  • Feature: Iraq's sectarian split
  • Military Matters: Did Saddam win?

  • Northrop Grumman Unveils Active Electronically Scanned Array For F-16
  • Dogs of War: The pay gap myth
  • BAE Systems Receives Contract Modification For M113 Reset
  • Combating Land Warfare Threats In The 21st Century Part Three

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2007 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement