PwC whistleblowers convicted over ‘Luxleaks’ tax scandal

Added 30th June 2016

Two whistleblowers have been found guilty in the so-called ‘Luxleaks’ tax scandal while a journalist has been acquitted.

PwC whistleblowers convicted over ‘Luxleaks’ tax scandal

Former PricewaterhouseCoopers employees Antoine Deltour and Raphael Halet received 12 and nine-month suspended sentences respectively for leaking 30,000 pages of documents in November 2014.

The documents, which were reviewed by the International Consortium of Investigative Journalists (ICIJ), exposed how 340 international companies – including Apple, Ikea and Pepsi - struck “secret deals” with Luxembourg, enabling them to save billions in their global tax bills.

In some cases, the government agreed to let the world’s largest conglomerates pay a tax rate of 1% or less.

At the time of the scandal, Jean-Claude Juncker, now head of the European Commission, was prime minister, while Luxembourg’s finance minister, Pierre Gramegna, described the leak as “the worst attack” his country had ever experienced.

Prior to serving as prime miniser, Junker was finance minister of Luxembourg between 1995 and 2013 - when the majority of the Duchy's controversial tax regime was constrcuted.

Edouard Perrin, a French journalist who reported on the leaks, was acquitted of all charges.

According to media reports, during the trial prosecutors claimed that Deltour was an “anti-capitalist” and requested he be sentenced to 18 months in prison.

‘True scandal’

Meanwhile, French campaign groups including Oxfam France and Attac France criticised the prosecution of the three men, with Attac France describing the verdict as a “true scandal” and a victory for multinational companies.

PwC, which gave evidence at the trial, pressed for a conviction – insisting that Deltour was a thief, not a whistleblower despite a Public Accounts Committee (PAC) report last year accusing the accountancy firm of allegedly promoting tax avoidance on an “industrial scale.”

 ‘Panama Papers’ leak

In April, more than 11 million documents, dubbed the ‘Panama Papers’, uncovered how politicians, sports stars and financial institutions from around the world use offshore shell companies to avoid paying tax.

The leak resulted in several nations announcing measures aimed at increased transparency and tackling tax evasion with British prime minister David Cameron bringing in a new rule requiring all crown dependencies and overseas territories to provide company ownership data to UK tax and law enforcement authorities.

 He also unveiled a new tax evasion law, making companies criminally liable for employees who aid tax evasion.

The Isle of Man and Gibraltar also joined Europe’s five largest economies — Germany, Britain, France, Italy and Spain — and 17 other jurisdictions in signing up to a confidential beneficial ownership register which would automatically share information on the ultimate owners of companies.  


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One law for one ...

And Juncker? Well, he got away with it, moving on, and up, within the dubious hierarchy of the European Union. No wonder the EU attracts such bad press. It's a tax haven in all but name.

Posted by: John Allan, 02 Jul 2016

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Monira Matin

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Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.

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