Germany’s Scholz Faces Possible Parliamentary Tax Fraud Probe



German lawmakers said Tuesday that they will look into Chancellor Olaf Scholz’s possible involvement as mayor of Hamburg in a tax fraud scheme that cost the government millions of euros.

The investigation would look into whether political figures assisted the private bank M.M. Warburg in avoiding paying back falsely claimed tax rebates in Hamburg, conservative CDU and CSU MPs said at a press conference.

The inquiry would also look at whether Scholz’s previous statements in relation to the scam were “believable”, said Mathias Middelberg, deputy leader of the conservative group in the Bundestag.

Scholz, who served as mayor of Hamburg from 2011 to 2018, has repeatedly denied any involvement in the decision to let the bank off the hook.

In Hamburg, one of Germany’s 16 federal states, the chancellor is already facing a similar parliamentary investigation.

The Hamburg committee is looking into why local finance officials dropped a bid to recoup 47 million euros ($48 million) in taxes from Warburg in 2016.

The “cum-ex” scandal, first exposed in 2017, involved numerous participants quickly exchanging company shares amongst themselves around the day of dividend payments in order to claim multiple tax rebates on a single payout.

The tax scheme, which was used throughout Europe, is estimated to have left a multibillion-euro hole in Germany’s public finances.

In Germany, dozens of people have been charged in connection with the scam, including bankers, stock traders, lawyers, and financial consultants.

Under pressure from former Chancellor Angela Merkel, Warburg was eventually forced to repay tens of millions of euros.

A parliamentary inquiry requires a quarter of the Bundestag’s MPs, or 184 deputies. The opposition Conservative Party has 197 MPs.

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