Tag Archives: Tax avoidance and tax evasion

Le Monde File Lawsuit Against President Sarkozy For Spying

Le Monde has filed a lawsuit against President Nicolas Sarkozy‘s office for using the country’s counter-intelligence services to track the French newspaper’s sources. Sarkozy’s office is being accused of having hunted down the source who talked to the paper about alleged illegal party funding by the country’s richest woman, L’Oreal heiress Liliane Bettencourt.

“The presidency emphasizes the fact that it has never given the slightest order to any service whatsoever.”

The Elysee

Je ne sais rien ...

In a front-page editorial published on Monday, the newspaper say they are suing the president’s administration for violation of the secrecy of sources, accusing Sarkozy of having ordered the national intelligence service to track down the source who talked to Le Monde about alleged illegal party funding by the country’s richest woman, L’Oreal heiress  Liliane Bettencourt.

Police sources are telling Le Monde that counter-espionage officers have looked at the telephone records of a justice ministry official to find out if he have spoken to reporters.


The official has now been removed from his duties, accused of having released restricted information and sent on a minor legal mission in the French Guyana.


France’s national police chief, Frederic Pechenard, reject the claims saying that the probe was legal and that the evidence was collected through a “legitimate investigation of the origin of leaks.”

Mr. Pechenard confirms that domestic intelligence services have been involved, as their mission is to “protect the security of institutions.”

However, Le Monde claims the spying is illegal because it violates a law protecting journalists’ sources – a law proposed by Mr. Sarkozy and enacted in January this year.


Meanwhile, Mr. Sarkozy’s cabinet firmly rejected any connection to the case.

“The presidency emphasizes the fact that it has never given the slightest order to any service whatsoever,” the Elysee says in a statement.

Le Monde quotes intelligence sources who says Mr. Sarkozy was furious at the leak published mid-July and ordered an investigation by the Direction Centrale du Renseignement Interieur (DCRI).

DCRI is a umbrella division of the internal security organization, created two years ago in an attempt to de-politicize  the country’s security services.

Liliane Bettencourt


The leak exposed labor minister Eric Woerth lobbying Ms. Bettencourt’s wealth manager for a job for his wife.

Five months later, the wealth manager was awarded the Legion d’honneur, a top French honor.


This investigation is still ongoing and now looking into Mr.  Woerth’s alleged conflicts of interest, among other accusations is tax evasion and illegal party funding.

The scandal has dented Mr Woerth’s credibility as he prepared to present a key pension reform to parliament.

A fresh set of nationwide union strikes are due on 23 September against the reforms, while Mr Sarkozy’s popularity – close to a record low – has only slightly improved following his clampdown on Roman camps.

Leaked documents published last week by Le Monde describes in detail how the Romans should be targeted “with priority.”

Le Monde has been on a collision course with the center-right government of Mr. Sarkozy ever since the traditional newspaper was taken over this summer by a trio of left-leaning millionaires, the EUobserver writes.

"This is to balance the newspapers, Mr. Minister .. or for your personal use?"

Related by the Econotwist:

Media Freedom Threatened In Most European Countries

EU Hunts For Journalist’s Sources

European criminals and politicians taking “libel tourism” trips to UK

Estonia Put Pressure On Journalists

Estonian Newspapers Protesting With Blank Front Page

Warns Against Euro Zone “Elite”

EU Lobbyists Complains Over Unfair Treatment


Manufacturer Direct espymall


Anti Spam


Filed under International Econnomic Politics, National Economic Politics

Greece: Corruption Behind Crisis

According to the head of Transparency International‘s office in Greece, corruption is one of the main reasons why the nation is  having a economic crisis.The organization estimates the cost if day-to-day corruption in Greece to be between 717 and 857 million euro per year.

“It’s not the only reason, but it’s a very important one.”

Aris Syngros

With Greece feeling the pressure from member states, the EU commission and the IMF to get a grip on its public spending, a transparency watchdog has estimated that the cost of bribes paid out by Greek citizens for public and private services is at least €800 million a year.

“Corruption is one of the main reasons why we have this economic crisis in Greece. It’s not the only one, but it’s a very important one,” head of Transparency International’s office in Greece, Aris Syngros, said during a hearing in the European Parliament last week.

Mr. Syngros presented the results of a survey carried out in the second half of 2009 which puts the cost of day-to-day corruption between €717 million and €857 million, an increase by some €40 million compared to results published a year before.

The calculation is based on telephone interviews with a sample of 6,122 individuals, carried out between July and December 2009.

The survey shows that the public sector in Greece is the most prone to corruption, with 9.3 percent of households reported to be asked to pay bribes in order to speed up administrative processes, get fair treatment in hospitals or avoid a penalty for traffic offenses.

The average bribe paid in 2009 for public services is €1,355.

But private companies and services also ask for bribes, as 5.3 percent of the people who participated in the survey admitted to have paid an average €1,671 to the private sector.

The study does not include high level corruption cases or big tax evasion schemes, which would put the figures much higher, Mr Syngros stressed.

“Corruption is not something we can’t see or touch. It’s real money, drained away from the real economy. Everybody speaks about recovery, growth, jobs, but without fighting corruption, this won’t work,” he says, urging the European Commission to put pressure on the Greek government to implement a far-reaching anti-corruption strategy.

“So far, the EU was like a spectator in a football match. We need a more active EU, that goes down on the field and is part of developing solutions.”

Back in Athens, Prime Minister George Papandreou acknowledged that “funds are being wasted this very minute into a black hole of mismanagement, corruption and waste.”

The EU executive is now looking at ways to extend monitoring of anti-corruption efforts in all member states, the EUobserver writes, as government and private corruption scandals ranging from defense contracts in Portugal to companies such as Siemens and Volkswagen continue to pop up.

Transparency International reports a worsening of the corruption perception in most EU countries.

“It’s a question of credibility for the EU: if we present ourselves at international level as upholding a certain standard, we have to do more at home as well. We are now working on a mechanism of periodical reporting on anti-corruption efforts within the EU,” a commission official says.

Source: EUobserver.com

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Filed under International Econnomic Politics, National Economic Politics

A Black Market of Bank Information

As a result of cash-strapped governments intesified hunt on tax evaders a black market for private client data hes emerged, according to a reasearch note by Moody’s. The latest information has revealed bank employes aelling stolen data to foreign governments.

“In cases like these, consequences often go beyond the mere loss of the clients directly involved. In the most extreme cases, nervousness from depositors can lead to significant money outflows, which might force the banks’ to rethink their business model.”

Javier Rodrigues Martin

Foreign governments caution Switzerland that client data theft cases could increase, Moody’s says in a research note.  The most important challenge for banks is the reputational damage caused by data theft or fraud by their own employees, the analyst points out.

The latest client data theft affecting a Geneva-based private bank and involving French tax authorities shows how far cash-strapped foreign governments are ready to go to get tax evaders’ money back. The threat of further breaches of bank secrecy due to client data theft (tacitly encouraged by foreign governments) is likely to increase customer insecurity at private banks, which may ultimately lead to money outflow (both cash deposits and securities) and challenge these banks’ core funding base.

Since Switzerland agreed to relax its banking secrecy rules in March of this year, more than 12 double taxation treaties (DTT) have been drafted between the country and foreign governments, allowing it to be taken off the OECD grey list of un-cooperative countries in September 2009. The DTTs allow for bilateral cooperation in case of tax evasion or fraud from their citizens. However, so-called “fishing expeditions” are not allowed under such agreements and foreign governments need to provide the name and details of tax evaders as well as solid suspicions to Swiss authorities if they are to get assistance. Since this information is typically difficult to obtain, some governments have resorted to client data stolen by private banks’ former employees. This was the case with LGT Bank in Liechtenstein in 2002, where a former employee sold data to the German tax authorities, and more recently with HSBC Private Bank in Geneva.

While HSBC Private Bank has declared that data on fewer than 10 accounts between 2006 and 2007 were taken, the French government claims to be in possession of the names of about 3000 tax evaders relating to other Swiss banks. It also cautions that data theft cases could increase if Switzerland does not show more cooperation.
On one side, the lack of certainty about the names owned by the French authorities is meant to encourage clients to voluntarily disclose their assets to the tax authorities. However, the most important challenge for banks is the reputational damage caused by data theft or fraud by their own employees. In cases like these, consequences often go beyond the mere loss of the clients directly involved. In the most extreme cases, nervousness from depositors can lead to significant money outflows, which might force the banks’ to rethink their business model.

In order to protect against this increasing threat, private banks need to invest more in protecting client data. This burden occurs at a time when compliance costs are also increasing – due to the more complex legal environment- while the earning side is constrained by lower market valuations. In the longer-term, Switzerland will need to come up with further-reaching cooperation agreements if it wants to preserve client confidentiality while removing doubts about their tax-compliance.

Copy of the original research note.

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Filed under International Econnomic Politics, National Economic Politics