By DAVID CRAWFORD in Berlin and DEBORAH BALL in Zurich
Switzerland faced a renewed assault on its private banking system as Germany considered paying for secret Swiss account data detailing alleged tax evasion by about 1,500 German taxpayers.
German authorities familiar with the investigation said Sunday that a confidential informant offered to sell them the data for €2.5 million ($3.5 million). The authorities, who say the information was stolen from a Swiss bank, say officials examined samples of the data that proved to be authentic.
Swiss banking, built on the promise of confidentiality, is still reeling from a bruising battle last year with the U.S. over allegations regarding tax evasion by U.S. taxpayers. Many Swiss bankers worry that such cases will erode client trust and lead to a flight of accounts to other countries. Under pressure from the U.S. and other nations, Switzerland recently agreed to water down its banking secrecy laws. Yet tax evasion isn’t a crime in Switzerland, and countries across Europe continue to complain that the Alpine nation is an attractive refuge for tax cheats.
Swiss finance-ministry spokesman Roland Meier said German officials haven’t yet informed their Swiss counterparts about the offered data. Mr. Meier said Switzerland is concerned about possible violations of Swiss law, including theft of bank data. Referring to a possible criminal investigation, he added, “It is a problem when illegally obtained information is introduced.” Switzerland expects Germany will ask Switzerland for legal assistance based on the information, Mr. Meier said.
A spokesman for the German finance ministry said that Germany has no set policy on when it is proper to pay a reward to a provider of evidence in tax-evasion cases, “Each case is decided on an individual basis,” the spokesman said. He declined to comment on a specific case.
German politicians were divided over the weekend on whether to purchase the data.
Volker Wissing, a member of Germany’s business-friendly Free Democratic Party and chairman of the German parliament’s finance committee, said he supports the purchase if German officials conclude it wouldn’t violate German law.
“The sale of stolen goods is a crime, but any legal means of obtaining important evidence should be considered with an open mind,” said Mr. Wissing, adding that his finance committee will discuss the proposed sale at a hearing Feb. 10. German officials said the information could help them retrieve as much as €200 million in back taxes.
In an earlier case, German prosecutors used the information successfully to obtain convictions.
Other politicians were more skeptical.”It would not be proper for the German government to purchase stolen property,” said Michael Fuchs, deputy parliamentary party chairman and a member of Chancellor Angela Merkel’s conservative Christian Democratic Union.
Mr. Fuchs said Germany should press Switzerland to provide evidence of tax fraud through the process of international legal assistance. He said he would ask German Finance Minister Wolfgang Schäuble to raise the issue of closer bilateral cooperation in tax investigation cases with his Swiss counterparts.
A spokesman for Germany’s finance ministry said a decision on any new purchases of evidence would be made after state government officials conclude a preliminary investigation. The informant offered the data to tax authorities in the state of North-Rhine Westphalia, Germany’s most populous state.
Germany has purchased stolen bank data for tax prosecutions in the past. In 2008, Germany’s foreign intelligence service paid about €4.2 million to Heinrich Kieber, a former bank employee, to buy account files stolen from LGT Treuhand AG, a subsidiary of Liechtenstein’s largest bank, LGT Group. An LGT spokesman and Liechtenstein banking officials say Liechtenstein-based LGT didn’t violate Liechtenstein law.
The records, which included information on accounts held by about 600 Germans, led to the arrest in February 2008 of Klaus Zumwinkel, then-chief executive of Deutsche Post AG, one of Germany’s biggest companies.
A German court subsequently gave Mr. Zumwinkel a two-year suspended sentence and fined him €1 million on the tax-evasion charges.
Deutsche Post referred questions last year to Mr. Zumwinkel, who declined to comment. A spokesman for LGT said the bank has reorganized its client relationships to ensure they are in accord with the law.
The brewing clash with Germany comes at a delicate time for Switzerland, whose European neighbors have also been pressuring the Alpine nation to help them oust tax dodgers with secret Swiss bank accounts.The Swiss government was dealt a serious setback last month when a Swiss court partially unraveled a deal Bern struck last year with the U.S. to settle accusations that Swiss bank UBS AG helped Americans evade taxes. The court found the agreement with the U.S. to release the UBS account data can’t break Switzerland’s still valid double-taxation treaty with the U.S. The treaty calls for the release of bank data as part of legal assistance only in the case of tax fraud, which—unlike tax evasion—is illegal in Switzerland. The court determined that those accounts didn’t constitute tax fraud. The Swiss are currently searching for a way to salvage the deal.
Over the last six months, Switzerland’sEuropean neighbors have also been piling pressure on the Alpine nation to help them oust tax dodgers with secret Swiss bank accounts.
Italy launched a tax amnesty that lured back about €80 billion in hidden money, much of it from Switzerland. At one point last fall, Italian authorities raided Swiss banks in Italy in what Swiss officials regarded as an effort to scare Italian tax dodgers.
Last fall, the French government received data on French account holders in Switzerland that had been stolen by an employee of HSBC Holdings PLC’s Switzerland business, angering the Swiss government. Last week, Swiss and French officials agreed that France wouldn’t use the stolen data to track down tax evaders. HSBC confirmed in December that data were stolen by a former employee in Switzerland and that it had filed a criminal complaint against the man.