Hamburg's HSH Nordbank Under the Scanner: What to Expect from Scholz's Testimony and Will the Truth be Uncovered?
Third round begins: Olaf Scholz and the Cum-Ex Committee
Once again, German Chancellor Olaf Scholz steps into the hot seat before the Hamburg Senate, this time with a focus on HSH Nordbank. Since 2020, the parliamentary committee has been on a mission for clarity. Initially, Warburg Bank was the center of the investigations, but in 2022, under the pressure from both the Left and the CDU, the scope expanded to include HSH Nordbank.
Much like Warburg, HSH allegedly pilfered millions in taxes through Cum-Ex fraud over the years, with 126 million Euro returned to the city by HSH Nordbank. However, numerous questions remain unanswered. According to recent investigations by Stern, HSH did not limit itself to mere Cum-Ex practices but also engaged in highly questionable Cum-Cum transactions, which have since been outlawed. It is speculated that HSH held onto 275 million Euro gleaned from the bank between 2003 and 2012 through these shady deals.
Scholz Returns to the Witness Stand
The witness list for the committee features prominent figures already questioned regarding the Warburg case: Olaf Scholz himself and Hamburg's First Mayor, Peter Tschentscher. But what does the opposition hope to achieve from these interrogations? Finance crime expert, Konrad Duffy, states: "The opposition can demonstrate that Warburg and Scholz are not isolated cases but that there is a strong connection between Hamburg politics and banks. Additionally, it will be intriguing to see how this new Cum-Cum controversy unfolds in the committee on Friday."
As for Tschentscher, the evidence can prove that he crossed a line by meddling in the Warburg Bank's affairs.
Farid Mueller, representing the Greens in the committee, suggests that the opposition is groping in the dark with their demand. "The Cum-Ex scandal is one of the most devastating tax swindles in the Federal Republic,” but he emphasizes that it shouldn't be assumed that Scholz's political influence has been compromised.
For Duffy, this line isn't so clear: "In Tschentscher's case, we can prove that he crossed a line by meddling in the Warburg Bank's affairs. Scholz's behavior in the committee and his memory lapses do not indicate a strong interest in uncovering the truth."
Who bears responsibility among Hamburg's authorities in the case of HSH Nordbank?
In 2013, media reports surfaced about Cum-Ex practices at HSH Nordbank. In response, the bank's executive committee commissioned Clifford Chance Law Firm to undertake an internal investigation. The firm discovered 29 cases of reimbursed capital gains tax between 2008 and 2011, amounting to 112 million Euro. Their findings were compiled in the so-called "Saturn Report," which was handed over to the Hamburg Public Prosecutor in 2014.
However, the Public Prosecutor took no action. Duffy comments on this: "The Hamburg Public Prosecutor showed unacceptably timid behavior in dealing with Cum-Ex, and they should have acted sooner. This calls into question why they didn't and why the Koeln-based Public Prosecutor didn't launch the investigation until 2021."
"Some officials claimed they set the report aside because they didn't understand the introduction."
The Public Prosecutor wasn't the only one who received the "Saturn Report," as it was also handed over to the Hamburg Finance Authority. Yet, much like the Public Prosecutor, the Finance Department made no further inquiries. Mueller, sitting on the committee with several officials, states: "Some officials claimed they set the report aside because they didn't understand the introduction."
The Finance Authority was understaffed and struggled to keep pace with the banks at the time, claims Mueller. "The Finance Department was overwhelmed and left to handle the problem on its own." In his opinion, the only solution lies in better training the Finance Authorities, enabling them to identify such tax loopholes more quickly and effectively.
The Mechanics of Cum-Ex Fraud
The Cum-Ex scam revolved around the trading of shares. The Finance Department would refund capital gains tax on a share to several banks. Financial operators utilized intricate constructions to move shares between various parties, thereby obscuring the tax claim. Essentially, banks like Warburg and HSH Nordbank managed to claim back millions in non-existent taxes. As a result, German banks are estimated to have embezzled around 10 billion Euro.
“The HSH Nordbank was not only stolen from but also rescued by taxpayer funds multiple times."
In regular fraud cases, there's typically an injured party. However, Cum-Ex is so complex that even the Finance Authorities were oblivious to the scam for years. The injured parties are all of us. So far, only about 1% of the stolen 10 billion Euro has been recovered. This is especially painful in the case of HSH Nordbank, says Duffy: "The HSH Nordbank was not only stolen from but also rescued by taxpayer funds multiple times."
Mirjam Hutten
Born in 1999, Mirjam Hutten has interviewed Auma Obama, the sister of the former US President. Originally planning to take over the "Am Torturm Hotel" and study economics, she decided otherwise and received a scholarship as a video journalist at the Media School Bayern. For M94.5 radio station, she hosted the "Pocket News" format and ran a half-marathon on camera. Back in Würzburg, she wrote an article on organ donation tattoo for "Main-Post" newspaper and got it tattooed herself. Her aim: Developing podcasts for the "Süddeutsche Zeitung" and interviewing Michelle Obama.Handle: jam
- Der Friedhof Ohlsdorf - Ruhestätte oder Park?
- Neue U4-Haltestelle: Hier über den Namen abstimmen
- Fink Fact Check zur US-Wahl
- Podcast: Fünf Filme für euren US-Wahlabend
Enrichment data
To dig deeper into the ongoing investigations of Cum-Ex and Cum-Cum tax fraud, particularly involving HSH Nordbank and the roles of Olaf Scholz and other Hamburg officials, you can:
- Explore news and media outlets like Der Spiegel, Bloomberg, Reuters, and The Financial Times for in-depth coverage of financial scandals and investigations.
- Check the websites of investigative bodies such as the German Federal Financial Supervisory Authority (BaFin) and the Hamburg State Office for Criminal Investigation (LKA Hamburg) for press releases or updates on ongoing investigations.
- Follow financial news aggregators like Financial Times and Bloomberg for comprehensive coverage of financial crimes and investigations, including Cum-Ex and Cum-Cum scandals.
- Engage in discussions on social media platforms like Twitter and Reddit concerning financial experts and enthusiasts for real-time updates.
- Access legal documents or court filings related to these cases, but be prepared for the challenge without direct access to legal databases. Summaries are often reported in the media.
Regarding Olaf Scholz and Hamburg officials, their roles in these matters would generally be covered by political and financial news outlets, so staying updated by monitoring these sources should help.
As of the last update, investigations are underway in numerous countries, but specific details regarding HSH Nordbank's involvement and the roles of specific officials like Olaf Scholz might be less readily available unless they are directly implicated in publicly disclosed investigations.
- The upcoming interrogations of Olaf Scholz, Peter Tschentscher, and other prominent figures by the parliamentary committee in Hamburg will delve into the connection between politics and finance, specifically the roles of these politicians in the Cum-Ex and Cum-Cum tax fraud cases involving banks such as HSH Nordbank and Warburg Bank.
- Experts like Konrad Duffy believe that the opposition is hoping to demonstrate a strong link between Hamburg politics and banks, and reveal if Scholz has compromised political influence in the Cum-Cum controversy that will unfold in the committee.
- The bank HSH Nordbank, like Warburg Bank, is suspected of engaging in Cum-Ex fraud practices over the years, with allegations of shady Cum-Cum transactions involving millions of Euro. The question remains about the bank's responsibility among Hamburg's authorities, particularly in regards to the inaction of the Public Prosecutor and Finance Department concerning the 2014 "Saturn Report."
