CumEx and Cum Cum: Multi-Billion Tax Fraud Investigator Suing the German Gov't
Let's give former prosecutor Anne Brorhilker some help, but I fear 'our' elites have long moved on from pretending to be the peoples' servants
As Europe limps ever closer to open war with Russia, some might argue that the EU’s leading politicos are doing so—to avoid being prosecuted for their own misdeeds.
While this is particularly apparent in the case of Ursula von der Leyen’s ‘success™’ (garnering enough ‘votes™’ for a second term as the EU chief executive), today we’ll talk about embattled German chancellor Olaf Scholz (SPD) whose own shenanigans are deeply tied up with a gigantic financial scandal related to the so-called ‘CumEx Files’.
Basically, when he was treasurer of the state of Hamburg, he failed to oversee banks and other financial institutions that were defrauding the federal gov’t to the tune of multiple billions of euros. Here’s the ‘official’ version (via Wikipedia; references omitted, emphases mine):
The CumEx-Files is an investigation by a number of European news media outlets into a tax fraud scheme discovered by them in 2017. A network of banks, stock traders, and lawyers had obtained billions from European treasuries through suspected fraud and speculation involving dividend taxes. The five hardest hit countries may have lost at least $62.9 billion. Germany is the hardest hit country, with around $36.2 billion withdrawn from the German treasury…
In cum-ex trades, shares with and without dividend rights were quickly traded between various market participants just before the payout date for the dividend, allowing traders to reclaim double the taxes.
Financial institutions in essence allowed two parties to simultaneously claim ownership of the same shares, therefore allowing both to claim tax rebates to which they were not entitled.
Authorities have since deemed the reclaims illegitimate, but at the time of the trades, this was less black and white, and a vast network of traders, analysts and lawyers were thought to be involved in the practice throughout the continent.
We note, in passing, that the English version doesn’t mention Olaf Scholz specifically, but basically, everybody knows:
The Danish State Commissioner August Schäfer first warned of the practice in 1992, after the testimony of five whistleblowers. However, the practice remained widespread until an administrative assistant in the German Federal Central Tax Office noticed abnormally large tax rebate claims from a US pension fund.
Moreover, the German Wikipedia entry notes that ‘the cum-ex transactions had been known to the Federal Ministry of Finance since 2002 at the latest’.
So much for the introduction, because now we’ll turn to the main course: of course™, authorities investigated these shenanigans (nothing came of it), and earlier this year, the public prosecutor threw in the towel in the face of all the obstruction.
Earlier this week, she resurfaced—announcing her intention to sue the gov’t, as related by the below piece; translation and emphases mine, as are the bottom lines.
Former Cum-Ex Prosecutor Now Suing the Government
By Max Borowski, NTV News, 16 June 2024 [source]
As a public prosecutor, Anne Brorhilker drove hundreds of criminal proceedings against cum-ex fraudsters. She has now resigned from the civil service to fight against the ‘skewed system’ that made the multi-billion-dollar tax fraud possible.
One of the differences between her old job and her new one, explains Anne Brorhilker, is that as a public prosecutor and civil servant she was not allowed to make any political demands. For years, she drove forward hundreds of cases against those involved in the multi-billion euro cum-ex tax fraud. But she could and was not allowed to do anything about the ‘imbalance in the system’ [by which is meant that German public prosecutors must follow orders from political appointees, such as federal and state justice ministers]. As an activist and new co-head of the citizens' movement ‘Finanzwende’ [lit. Financial (sic, meant is fiscal) Change], she is now making up for this and at the same time making serious accusations against the federal government and, above all, the finance minister.
Brorhilker demands that the financial administration, with the Federal Ministry of Finance and Minister Christian Lindner at the helm, must ‘prove that they are on the side of the citizens’ and not the banks, which have defrauded the state of billions, says Brorhilker in an interview with journalists. Her co-managing director, ‘Finanzwende’ founder Gerhard Schick, adds:
Christian Lindner’s friendship with the banks has become a threat to public budgets.
What concerns Brorhilker and Schick is the state’s apparent inaction in what is known as cum-cum tax fraud. This scam is closely related to the more well-known cum-ex transactions—with two significant differences: the damage is estimated to be even higher than cum-ex at at least 28.5 billion euros, according to Brorhilker. And the finance ministers at federal and state level have so far shown no interest in collecting this money—despite gigantic budget holes [of course not, because that money is going elsewhere]. On the contrary: according to Brorhilker, the Federal Ministry of Finance even encouraged the practice for years, for example by declaring the clearly criminal share deals permissible under certain conditions in a 2016 letter. This was only corrected in 2021, but this has not yet resulted in any recognisable efforts to recover these billions.
‘Interest in preventing controls and prosecution’
According to Brorhilker, the authorities’ failure to act is damaging trust in the rule of law. Her suspicion: the influence of the financial lobby, especially the banks, is unmistakable at this point, explaines Brorhilker:
This is a large, very well-connected industry that has a vested interest in preventing effective controls and prosecution and gets away with it.
Attempts to clarify this influence were blocked by the authorities concerned. For example, by refusing to provide any information on the background to the letters in question from the Federal Ministry of Finance on the subject of cum-cum, sometimes with adventurous justifications.
‘Finanzwende’ is now taking action against this information blockade with four lawsuits against the Federal Ministry of Finance and the finance ministries of Hesse, Baden-Württemberg, and North Rhine-Westphalia. The activists are also turning to the public to generate political pressure so that tax evasion worth billions can finally be seriously combated. According to Brorhilker, other countries show that this is possible if the political will is there. In Denmark, for example, the government is in favour of prosecuting cum-ex offenders abroad. France has set up its own public prosecutor’s office for such offences. Germany, as she knows from the cum-ex investigations, is laughed at by the perpetrators in the investment banks in view of the virtually non-existent control mechanisms.
Cum-ex and cum-cum transactions are securities transactions that have been very widespread for many years, in which shares are moved back and forth across national borders around the dividend record date. The aim is to have the tax on the dividends refunded several times, even though it was only paid once. Under Brorhilker’s leadership, the public prosecutor’s office in Cologne obtained numerous legally binding judgements against cum-ex fraudsters and recovered many millions of euros for Germany’s taxpayers. In April, she asked to be dismissed from the civil service and shortly afterwards announced her move to ‘Finanzwende’. The non-governmental organisation sees itself as a counterweight to the financial sector lobby.
Bottom Lines
We need more people like Ms. Brorhilker, no doubt. At the same time, the likely outcome will be—nothing. These people she is up against, they feel themselves above the law and protected by their lackeys ostensibly running the gov’t in the people’s name.
Go back and check back to the date this became known to German authorities: 2002. If successive German governments—that included, by the way, every party except for the AfD—wanted to do something about this, they could certainly have done so. None of them wanted to.
The same applies to other European governments.
So, what does this mean? The globalist elites are plundering the public purses everywhere, and there’s nothing that’s going to stop them.
War with Russia, if and when it comes, will accelerate this trend, and the main question is: where will the benefits accrue? (Don’t be naive, there are always winners in war, it’s just not the likes of you and me.)
For the globalist elites, it’s a bloody game; for you and me, it’s Russian roulette (no pun intended).
As to Ms. Brorhilker, I wish her well and hope something will come out of this, but I won’t hold my breath; I fear that she and many others (myself included) still cling to the past in terms of our once-functioning (at least better) societies.
Our opponents have long moved on.