Nick Shaxson ■ Edouard Perrin, PwC and the Dodgy Duchy of Luxembourg
The investigative British magazine Private Eye is currently running a short, incisive piece about the Dodgy Duchy of Luxembourg and PwC, which, given its importance, bears repeating in full. It runs as follows:
The Luxembourg authorities last week did what tax havens and banana republics around the world do when their dirty secrets begin to be exposed: they lashed out at one of the journalists responsible.
In 2012 Edouard Perrin, a hack with French TV company Premieres Lignes, obtained details of hundreds of corporate tax avoidance schemes tun through Luxembourg and rubber-stamped by its tax authorities. The Eye worked with Perrin and first revealed the tax avoidance factory in the UK (Eye 1314). Last year the schemes were splashed across the world’s media as LuxLeaks, the Grand Duchy was roundly condemned and inquiries were launched by a number of national parliaments and the European one too.
For performing this significant public service, Perrin and two former PwC employees have been charged with theft. Their plight is in no small part thanks to the reaction of PwC, the firm that created the schemes and whose tax boss in the UK (where the largest number of tax-dodging clients were based), Kevin Nicholson, told MPs the details were “stolen documents that have been put in the public domain”, which was “embarrassing and deeply upsetting.” His firm, which also earns fortunes in fees from the governments its schemes rip off, is thought to have been extremely co-operative with the Grand Duchy plods.
One of those other whistleblowers is Antoine Deltour, whom we’ve written about before. This is a double pronged attack on those serving the public interest: first, from Luxembourg, the Death Star of financial secrecy at the heart of Europe, and second, from PwC, the Big Four behemoth.
TJN has met Nicholson and his senior team members including Andrew Packman, who repeated to us the accusation that Deltour had engaged in ‘theft.’ At that time, TJN’s John Christensen reminded Mr. Packman of the UK legal dictum ‘there is no confidentiality in iniquity.’
We should add that TJN also met with Edouard Perrin and in autumn 2011 TJN’s Christensen and senior adviser Richard Murphy met Perrin in Paris to review the PWC database and verify its importance. Murphy subsequently worked with a BBC Panorama team which helped expose the scale of the scandal.
Recently, we highlighted a document from the European Trade Union Congress (ETUC) which contained this recommendation:
“A break-up of the Big Four accounting firms.”
LuxLeaks is just one part of a far bigger and uglier picture, as far as the Big Four are concerned. The political capture of whole governments, the propagation of sometimes violently anti-tax (and even anti-state) messages through the media, the involvement in a range of abusive behaviours, not to mention the severe abuse of market power that comes from having such uniquely dominant positions in the world economy.
Perhaps it’s time for civil society to start taking this recommendation seriously.
Index on Censorship, Amnesty International, Human Rights Watch, and others in the terrain of media freedom and human rights: let’s see your colours now.
Indonesia launches investigation following ‘Macao Money Machine’ report
October 2021 Spanish language podcast, Justicia ImPositiva: Los Pandora Papers, el Bitcoin en El Salvador y crisis de la inmobiliaria en China #64
Pandora Papers and (South Dakota) trusts: Why do criminals and the rich like them so much?
Pandora Papers: law firms must disclose clients’ names (like they’ve started doing in the US of all places)
Tax Justice Network Arabic podcast #46: ضريبة تثير جدلا لدى صانعي المحتوى الرقمي في مصر
The Tax Justice Network’s French podcast: Afrique: Plus de transparence entre administrations fiscales pour lutter contre les flux financiers illicites #32
Pandora Papers shows transparency failure is an accountability failure
Tax Justice Network Portuguese podcast #29: Fim à tributação que penaliza os mais pobres
Isle of Man banking data leak reveals how sharing data can identify offshore strategies and improve beneficial ownership
Isle of Man banking leak: Analysing banking data to reveal offshore strategies
29 September 2021