Cum-Ex-Geschäfte

“Cum/ex transactions.” A lucrative tax loophole that major German banks have been using. Spiegel reported the story on 28 Apr 2013, saying it had been broken by the Berlin Sunday version of Die Welt (Die Welt am Sonntag, WamS) but so far search results for it online are only turning up in Der Spiegel. The loophole, estimated to have cost the German government 12 billion euros so far, was created by corporate tax reform legislation of the SPD + Green Party coalition in 2002. Though discovered by officials shortly thereafter in 2002, and reported all the way up the chain of command, the loophole was not fixed by Hans Eichel (SPD) or his successor Peer Steinbrück (SPD, currently running against Angela Merkel for chancellor of Germany). Amendments to the law in 2007 made the situation worse, Spiegel reports that WamS reports. Wolfgang Schäuble (CDU) appears to have waited several years to fix the problem as well, though now the order appears to have gone out.

The problem was this: under certain circumstances capital gains tax could be reimbursed multiple times. After e.g. stocks or bonds were sold short but before they were bought back to conclude the transaction, German bureaucracy sometimes obscured to whom the stocks or bonds belonged: the person loaning the stock, the short seller or the end customer. The question would be trivial, say financial reporters, were it not for the fact that sometimes if the sale occurred right before a dividend the German IRS would erroneously issue more than one get-your-tax-back certificate for capital gains on the stock. Honest people would ignore the unearned get-your-tax-back certificate, but others would deliberately game the system to get the treasury to reimburse them these taxes even conceivably more than five times, said professor Heribert Anzinger of the University of Ulm.

This looks like the dividend stripping loophole HypoVereinsBank and others were reported in 2012 to have used to extract money from the German fiscus. Etymologically, Wikipedia contributors explain, when a company’s general assembly of shareholders decides to issue a dividend, the dividend is usually issued the day after the assembly meeting, called the “ex day” (“Ex-Dividende”). The day before the ex day is called the cum day, for arcane reasons.

(COOM   ECKS   geh SHEFF teh.)

V-Mann, V-Frau

“V men” are police snitches in certain milieux. For a long time I thought V in this case stood for Verfassungsschutz, but apparently it stands for Verbindungs– or Vertrauens-? In the latter case, the paid informants in the German right-wing scene who have supplied questionable information to the police might actually be called “confidence men.”

Update on 4 Sept. 2012: The Thuringian state Verfassungsschutz office apparently ignored its own rules for selecting V-people. German constitutional law requires V-people to be neither leaders nor criminals, “yet V-men in Thuringia often fulfilled both those criteria,” according to Der Spiegel. Furthermore, the Thuringian Verfassungsschutz paid for lawyers, cars, computers and workshop rent for these guys, “keeping the neonazis mobile” as left-wing Thuringian state parliamentarian Martina Renner (Die Linke) described it.

Update on 15 Sept. 2012: Not only police kept V-people. German foreign intelligence, domestic intelligence (state and federal), military intelligence, and police (state and federal) paid V-people for information. Vertrauen means trust or confidence. As Spiegel-Online noted in this excellent article about one of the Berlin police’s neonazi V-men, it is not always clear in these situations who is trusting whom.

Update on 4 Nov 2012: The new head of German Verfassungsschutz, Hans-Georg Maaßen, has called for a central national register of all V-people. This must replace the current system wherein each German state pays its own set of informants and is not required to share information about them, he told the Welt am Sonntag. “Central knowledge is indispensable for effective management of the federal and state V-people.”

Update on 8 Dec 2012: The central list of V-people will go active by 1 Jan 2013.

Update on 4 Feb 2013: There is an argument in the committee investigating the band of neonazi serial killers because a government office refused to have a V-man connected to the cell, “Thomas R.,” appear to testify before the committee. Apparently the bureaucrats running the V-people were and remain also assured complete secrecy and apparent immunity.

Update on 5 Feb 2013: Europol used V-people in its investigation of the UEFA and FIFA soccer betting scandal that so far has turned up at least 380 manipulated games around the world between 2008 and 2011, with profits of at least 8 million euros in Germany alone. In this investigation Europol also accessed phone conversations and evaluated 13,000 emails.

Update on 27 Apr 2013: As part of their 2013 election platform, the Green Party wants to get rid of all V-people.

Update on 23 May 2013: The federal + states commission investigating the investigation of the neonazi serial killers published its highly critical report, which included a recommendation to continue the option of immunity for V-people who commit crimes. Saying such crimes were scarcely avoidable, commission spokesman and Munich attorney Prof. Eckhart Müller indicated the immunity was actually for the government officials paying the V-people, to keep these authorities from being prosecuted under German laws against incitement to crime.

Update on 16 Jul 2014: After a V-Mann testified this week that he gave his snitching fees to the neonazi bank-robbing cell of serial killers—he was available to testify inter alia because he’s been arrested for sexual abuse of a child—someone leaked a 1997 letter to ZDF in which the federal police firmly warn Verfassungsschutz about V-people, saying some were in “exposed positions” and fearing there could be an “incendiary effect.” By this I think they mean now that the authorities were paying neonazi leaders good money, though it sounds like at the time these words could mean they were worried about their sources’ safety. They think now there were seven paid V-people who were in contact with the neonazi serial killers. The 1997 letter mentions two of them by name.

In 1998 the authorities found a bomb-making workshop used by the cell, with one of the terrorist’s contacts list in it. The list was never used by investigators—perhaps because it contained the names of many V-people?

The Thuringian state legislature has passed stricter rules for the V-people paid by Thuringian state Verfassungsschutz. The income cannot be the source’s livelihood. Also, the Thuringian Verfassungsschutz has been made a part of the state’s interior ministry; previously, it was independent.

(F OW! mon. F OW! frrr ow!.)

Blog at WordPress.com.