On Tuesday, German lawmakers said that they would seek to disclose an investigation into Chancellor Olaf Scholz’s potential involvement as mayor of Hamburg in a tax fraud scam that cost the government millions of euros.
The investigation would look at whether political figures supported the private bank M.M. Warburg to avoid paying back falsely claimed tax rebates in Hamburg, MPs from the conservative CDU and CSU parties said at a press conference.
The probe would also look at whether Scholz’s last statements about the fraud were “believable,” said Mathias Middelberg, deputy leader of the conservative group in the Bundestag.
Scholz, who was mayor of Hamburg from 2011 to 2018, has constantly been pushed to deny allegations he was involved in the decision to let the bank off the hook. The chancellor is already encountering a similar parliamentary probe in Hamburg, one of Germany’s 16 federal states.
The Hamburg committee is investigating why local finance authorities in 2016 dropped a bid to claw back 47 million euros ($48 million) in taxes from Warburg over so-called cum-ex trades.
First exposed in 2017, the “cum-ex” scandal involved numerous participants swiftly exchanging company shares amongst themselves around the day of dividend payments, to claim multiple tax rebates on a single payout.
Used across Europe, the tax scheme is estimated to have left a multibillion-euro hole in Germany’s public finances. The scam has noticed dozens of people being indicted in Germany, including bankers, stock traders, lawyers, and financial consultants.
Warburg eventually had to pay back tens of millions of euros under pressure from the federal government under former Chancellor Angela Merkel. A quarter of MPs in the Bundestag are needed to open a parliamentary inquiry. The opposition conservative group numbers 197 MPs.
