LuxLeaks whistleblowers get suspended jail sentences
Two whistleblowers in the "LuxLeaks" tax scandal were given suspended jail sentences on Wednesday for leaking thousands of documents that exposed Luxembourg's huge tax breaks for major international companies.
The LuxLeaks scandal sparked a major global push against the generous deals handed to multinationals that grew even further after the Panama Papers revelations earlier this year.
Former PricewaterhouseCoopers employees Antoine Deltour and Raphael Halet received 12-month and nine-month sentences respectively while journalist Edouard Perrin was acquitted of all charges.
In his ruling, Judge Marc Thill recognised the defendants’ status as whistleblowers and their “undeniable contribution… to greater transparency” on tax matters.
The documents revealed the huge tax breaks that tiny EU nation Luxembourg offered international firms including Apple, IKEA and Pepsi, at a time when Jean-Claude Juncker, now head of the European Commission, was prime minister.
The revelations ended up forcing the EU to take urgent steps to stop global firms avoiding tax in Europe, including anti-trust inquiries into firms like Apple, McDonald’s and Amazon.
The scandal also pressured Luxembourg into accepting a new law that requires EU member states to share tax deal information with its bloc partners.
In an email to AFP, a support group for Deltour said both men would appeal, adding that the verdict amounted to a dangerous “warning towards future whistleblowers” by the court.
Deltour and Halet faced a maximum penalty of 10 years on charges which included stealing documents, revealing business secrets and violation of professional secrets.
The documents were originally used for a 2012 report by reporter Perrin on French public television but really exploded onto the world stage two years later with the huge “LuxLeaks” release of all 30,000 pages into the public domain.
– ‘Tax dodgers emboldened’ –
The case drew worldwide attention and a few dozen tax campaigners demonstrated outside the court in Luxembourg on Wednesday at the start of the hearing.
“Tax dodgers will be emboldened by this verdict — the law is on their side, which is wrong,” said Max Lawson, an inequality expert from the charity Oxfam.
“It will take an exceptionally brave individual to speak out about tax abuse now that they face the very real prospect of a huge fine or imprisonment,” he said.
The LuxLeaks scandal put huge pressure on Juncker during his first weeks as head of the European Commission, the powerful executive arm of the 28-nation European Union.
The entire LuxLeaks trove contained many more documents, not only from PwC but also other accountancy and law firms involved in obtaining secret “tax rulings” that lowered rates for companies to as little as one percent.
Luxembourg authorities pressed on with investigations after the International Consortium of Investigative Journalists released its documents, leading to Deltour being charged in December 2014 for violation of professional secrecy and wrongfully accessing a database.
“The judges have clearly decided to protect the interests and reputation of multinational companies that allegedly avoided taxes rather than the interest of public to be informed about wrong-doings,” said Jane Whyatt of the European Centre for Press and Media Freedom.
However, the tiny duchy of Luxembourg has also tried to show that it is clamping down on tax evasion, as well as diversifying into other forms of industry.
PricewaterhouseCoopers, which declared itself a civil party in the trial, won a symbolic euro ($1.1) from their former employees in the verdict.