Cum-Ex scandal at Warburg
Accusers see Olearius as a driving force
September 18, 2023, 6:12 p.m
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In the Cum-Ex scandal, banker Olearius, one of the central figures, is now in court. Prosecutors are convinced that he not only knew about the deals, but initiated them. Chancellor Scholz could shed light on the matter, but is not expected to testify at first.
In dealing with the Cum-Ex tax scandal, criminal proceedings against Hamburg banker Christian Olearius have begun before the Bonn regional court. At the start of the trial, the public prosecutor’s office read out the indictment against the personally liable partner of the private bank MM Warburg. It concerns 14 cases of particularly serious tax evasion, which essentially relates to the period from 2006 to 2011 – i.e. the peak phase of the so-called cum-ex transactions, in which unpaid taxes were refunded by the state and the general public was cheated out of billions became.
Prosecutors attribute Olearius’ actions to tax damages of 280 million euros. The 81-year-old has always rejected the allegations in the past. His lawyers want to respond to the allegations in the courtroom on Wednesday. 27 more days of negotiations are planned until March 2024. The former Warburg boss faces up to ten years in prison.
In cum-ex deals, banks and other financial actors staged a game of confusion. Around the dividend record date, shares with (cum) and without (ex) dividend entitlement were moved back and forth between those involved. In the end, tax offices refunded unpaid taxes. In 2012, the state closed the loophole. In 2021, the Federal Court of Justice (BGH) decided that cum-ex transactions should be viewed as tax evasion.
What role did Olearius play?
Prosecutor Stephanie Kerkering and her colleague David Pagenkemper took turns reading out the charges for a total of three hours. They named the names of the centrally involved financial actors, including the tax lawyer and “Mister Cum-Ex” Hanno Berger, who has already been sentenced to two prison terms. From the prosecutors’ point of view, Olearius fits seamlessly into the “Who’s Who” of the largest tax fraud in the Federal Republic. A central question in the trial is whether Olearius was a driving force and whether he knew what he was doing.
Yes, say the prosecutors: he was one of the initiators. “The defendant was informed about this and took significant control,” said public prosecutor Kerkering. He was involved in crisis situations in order to avert risks, and he was aware that the Cum-Ex business model was based on the crediting or reimbursement of taxes that had not been paid: “He was aware that these were incorrect information.” The prosecutor emphasized that the business model is “based on the fraudulent obtaining of taxpayers’ money.” According to the prosecution, concerns from an expert about the legality in 2010 went unanswered by Olearius – he allowed concerns to be brushed off the table and things continued.
Fabio De Masi, a former left-wing member of the Bundestag, was also in the audience in the courtroom. The process is important for a strong constitutional state, he said. “Cum-ex transactions are the most serious form of organized crime.” He expects “insight and remorse” from Olearius. From De Masi’s point of view, the processes described in detail by the prosecution make it clear that those involved cannot plead ignorance. “Everyone knew exactly what they were doing.”
Ministry of Finance prevents new statute of limitations
The court case is also explosive because of a connection to Chancellor Olaf Scholz. Olearius met him three times in 2016 and 2017, when the Social Democrat was still Hamburg’s first mayor. The banker wanted to prevent his financial institution from having to pay back taxes. In fact, this was initially successful; some of the claims were time-barred – later that changed. In 2017, there was another threat of a statute of limitations, which was only prevented by the intervention of the Federal Ministry of Finance. According to its own information, Warburg settled the tax claims due to the stock transactions in 2020. The majority shareholders – including Olearius – paid the amounts “from their own assets,” a Warburg spokeswoman said before the proceedings began.
At that time, Olearius used his contacts in politics and, according to the Bonn indictment, enlisted the SPD politician Johannes Kahrs and the former Hamburg Senator for the Interior Alfons Pawelczyk for his purposes. There were also meetings with Scholz. “It was about preventing imminent tax refund notices by putting pressure on decision-makers,” said public prosecutor Pagenkemper. “He sought direct talks with Scholz several times, which was intended to build up political pressure in the tax authority.” In a letter that he gave to Scholz, Olearius gave false information in order to conceal the actual facts. The Social Democrat Scholz admitted the meetings with Olearius, but cited gaps in his memory regarding the content of these meetings. Scholz ruled out any influence on the tax proceedings against the Warburg Bank.
A parliamentary investigative committee of the Hamburg citizenship has been investigating the role of leading SPD politicians in the Warburg tax case for almost three years, and no evidence of intervention by Scholz has yet been provided. The name of the current Chancellor is likely to come up again and again in the Bonn Cum-Ex trial in the coming months. However, Scholz will most likely be spared a trip to the regional court in Bonn: So far, neither the judges nor the public prosecutor consider it necessary for him to appear as a witness.