'Lux Leaks II' puts new pressure on Jean-Claude Juncker
All four of the world's largest audit firms now involved in Luxembourg tax avoidance scandal, according to investigative journalists
By Tommy Hansen
COPENHAGEN
Just one day after taking his formal oath of office as president of the European commission, pressure is again mounting on Jean-Claude Juncker in the so-called "Lux Leaks" scandal.
Following the release of the "Lux Leaks II" files by the International Consortium of Investigative Journalists (ICIJ) documenting how more organized tax evasions were carried out by large corporations with the help of the authorities of Luxembourg, a former top Amazon employee has revealed that Juncker - then serving as both prime minister and finance minister of Luxembourg - personally pursued the company when the "internet bookstore" firm was deciding where to base its European headquarters.
The UK's Guardian, Times and Daily Mail newspapers reported on Wednesday that the Luxembourg newspaper d’Lëtzebuerger Land had been told by Bomb Comfort, the former Head of Tax for Amazon, in an interview: “The Luxembourg government presents itself as business partner, and I think it’s an accurate description; it helps to solve problems.”
"Lux Leaks II" provoked a strong reaction from the Socialists and Democrats Group (S&D Group) in the European Parliament, who urged the European Commission to take “prompt and far-reaching action” - or lose support.
The President of the S&D Group, Gianni Pittella, told The Anadolu Agency on Thursday: “Lux Leaks II has revealed once again the depth of this scandal."
"It shows there is a scandalously deep chasm which can only be fixed by genuine, practical legislative changes."
'Blank cheque'
"The European Commission and President Juncker must make tax evasion a top priority and come up with wide-ranging and effective proposals against tax havens and tax avoidance in the first six months of 2015, otherwise, the S&D Group is ready to withdraw its support for the Commission," he said.
Pittella went on: "We have always stressed that we did not sign a blank cheque for Juncker."
"Now, Juncker has to demonstrate he deserves our trust and backing."
According to Danish newspaper Politiken, Juncker has claimed the Lux Leaks scandal is a coordinated attack directed at him personally.
“This is no coincidence. The first wave came as I started in the job, and the second wave hits at the day when I am to take my formal oath," Juncker said as he entered the EU's Court of Justice in Luxembourg for the official ceremony on Wednesday.
In an interview with the French Libération newspaper, he admitted his position as European commission president had been "weakened because Lux Leaks suggests that I would have participated in schemes which infringe elementary rules of ethics and morality".
'Need to criminalize'
Head of the SPD delegation in the European Parliament, Udo Bullmann, told The Anadolu Agency that the issue needs to be thoroughly addressed in the 2015 Commission Work Programme.
Bullmann said: "The battle against tax evasions must become a key element in the Work Programme which we expect next week."
"We are talking about massive amounts, billions, that should be used within the EU for investments in society, and we urgently need to criminalize the assisting of such misbehavior and introduce solid initiatives to fight it."
In the Amazon case, former employee Comfort, who has been Luxembourg's Honorary Consul for the Seattle area since 2011, describes meetings with top civil servants from the Luxembourg finance ministry and with Juncker himself, who was then serving as both prime minister and finance minister in the country.
Comfort states: “His message was simply: ‘If you encounter problems which you don’t seem to be able to resolve, please come back and tell me. I’ll try to help’."
Comfort also claims Juncker courted the online giant, behaving as a "business partner".
Months after arriving in Luxembourg in 2003, Amazon secured a confidential deal which two months ago became the subject of a formal investigation by the European Commission.
Secret deals
The commission had already opened three other state-aid investigations; Apple in Ireland, Fiat Finance and Trade in Luxembourg, and Starbucks in the Netherlands.
Jean-Claude Juncker comfortably survived a no-confidence vote defeated by 461 votes to 10 in the European Parliament on November 27, brought over the first round of Lux Leak files comprised of 548 tax documents involving more than 300 different companies with the accounting giant PricewaterhouseCoopers.
The revelations were unearthed by the International Consortium of Investigative Journalists (ICIJ) on November 6, revealing that big name corporations like Pepsi, IKEA and FedEx had secured secret deals with Luxembourg saving billions of dollars in global taxes.
The new set of 54 released Luxembourg tax documents from ICIJ expands the list of companies involved by another 33, including The Walt Disney Co., chemical conglomerate Koch Industries Inc, private equity firm Warburg Pincus and Internet phone giant Skype.
The "Lux Leaks II" files also show that the aggressive tax structures are being brokered not only by PwC but also by Luxembourg-based law and tax firms and global accounting firms like Ernst & Young, Deloitte and KPMG.
The formal oath of office was taken on Wednesday by Juncker and the Members of the College of Commissioners at the EU's Court of Justice in Luxembourg, pledging to "respect the Treaties and the Charter of Fundamental Rights of the EU, to carry out their responsibilities in complete independence and in the general interest of the Union".
