German intelligence tells how it bought data

22nd February 2008, Comments 0 comments

The agency was approached by an informant almost two years ago.

Berlin -- Germany's BND external intelligence agency briefed parliamentarians on how it paid a whistle-blower for data about German tax dodgers from the secretive Liechtenstein banking system.

Though the briefing in Berlin was classified, a newspaper, the Sueddeutsche Zeitung, reported that the BND said it received its first approach from the informant two years ago.

BND chief Ernst Uhrlau had denied during the briefing that the informant was a person convicted by Liechtenstein of fraud, the newspaper said. There have been questions all this week about the extraordinary operation.

It quoted Uhrlau saying that after an initial approach on Jan. 24, 2006, the BND had checked out the informant, then met him.

Thomas Oppermann, who chaired the parliamentary intelligence committee, said members had asked for more documents and would meet again on March 5 to approve or disapprove of the BND operation.

Germany expects greater transparency on the issue of money laundering and measures to counter unfair tax competition from Liechtenstein, Chancellor Angela Merkel said earlier after meeting the principality's prime minister, Otmar Hasler, in Berlin.

The meeting came amid a widening tax evasion scandal that has brought down at least one prominent German business leader.

Merkel moved to dampen emotions after Liechtenstein Crown Prince Alois had expressed sharp criticism of the purchase of apparently stolen information on accounts held with banks in the Alpine state.

But she called Alois' remarks "incorrect and unhelpful."

Regarding cooperation from Liechtenstein on financial disclosure, Merkel said progress was being made, although outstanding issues remained. These had to be cleared up as a matter of urgency, she said.

Pointing to an agreement on greater tax transparency between Liechtenstein and the United States, Merkel said this was a point of reference and a similar arrangement had to be possible with the European Union.

Hasler pointed to reforms under way regarding the law on foundations, which are used by rich Germans to conceal untaxed income from German inland revenue.

"Liechtenstein is on a road to reform that was initiated independently of events of recent days," Hasler said.

Germany is demanding that Liechtenstein comply with the rules of the Organization for Economic Cooperation and Development (OECD) in various areas, including unfair tax competition and financial transparency.

It also wants Liechtenstein to implement the third set of EU money laundering guidelines rapidly. Germany itself has yet to ratify the guidelines.

Earlier the two sides had engaged in a sharp exchange, senior German politicians calling the principality a "robber barony" that encouraged tax evasion for its own profit, while Hasler said the criticism was "completely out of place."

Alois and Hasler were particularly angry at the purchase for more than 4 million euros (6 million dollars) of a disk containing information on foundations managed by the Liechtenstein Bank LTG.

"In Liechtenstein spying on business secrets and passing on the information is punishable by law. And this will be prosecuted in Liechtenstein," Hasler told German television.

Reports in Berlin said the government was considering sanctions against the principality, although officials denied Germany would hold up Liechtenstein's pending admission to the Schengen free-travel zone.

The tax evasion scandal, which broke on Thursday last week with a police raid on the home and office of Deutsche Post head Klaus Zumwinkel, one of Germany's most respected business leaders, rumbled on in Germany.

After further raids Tuesday, police moved Wednesday on Karl-Michael Betzl, a commissioner for data protection in the southern state of Bavaria, who promptly stood down.

DPA with Expatica

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