As the fallout from the “SwissLeaks” revelations about secret accounts at the Geneva branch of HSBC bank continues, the Spanish justice system has decided to examine whether the previous Socialist administration unfairly offered tax dodgers an “amnesty” in 2010 to save them from prison terms.
The case goes back to 2008, when disgruntled HSBC employee Hervé Falciani handed French authorities a list of names of people holding accounts at the bank’s Swiss subsidiary. Two years later, tax authorities in Madrid contacted Spaniards on the list via a letter requesting that they pay their back taxes or face an inspection that could lead to criminal prosecution.
Hundreds of individuals avoided prison terms of up to six years as a result of the offer, including several members of the Botín family, owners of the Santander banking group, who paid €200 million.
Although a union of Tax Agency workers filed a complaint, arguing that the government of José Luis Rodríguez Zapatero had provided tax evaders with an unfair amnesty, the case did not prosper in the courts.
But interest in the case has been rekindled following new revelations about the HSBC accounts published in recent days by several media outlets in a joint collaboration with the International Consortium of Investigative Journalists (ICIJ), which has dubbed the investigation “SwissLeaks.”
Now, a Madrid court has ordered an investigation into this alleged amnesty by the Tax Agency. After ruling in favor of the Gestha union of tax office workers, which appealed the original decision to shelve the case, an examining court will now have to resume its probe against María Dolores Bustamante, former director general of tax management, and Carlos Cervantes, former head of the tax inspection department. Both had been accused by the union of breach of public duty.
The Madrid court, however, has dismissed the case against former Tax Agency director Juan Manuel López Carbajo, who oversaw the entire process, on the grounds that there is no evidence against him.
When Spain received the list of 659 potential tax dodgers, the Tax Agency did not automatically initiate an inspection procedure, as is usually the case when fraud is suspected. Instead, it sent a letter to 558 of the names on the list – the others were left out as the statute of limitations had expired – informing them of the findings, and requesting the payment of back taxes on their hidden Swiss accounts. The letter gave recipients 10 days to reply or face an inspection.
This political decision effectively gave a second chance to tax evaders who could have faced criminal prosecution as their fraud totaled more than €120,000, the threshold established in the Spanish penal code.
After receiving this early warning, 306 letter recipients settled their debts with the Spanish treasury through additional tax filings that the agency considered “spontaneous,” and thus not subject to an inspection.
The state collected €260 million via this method. Of this amount, €200 million was paid out by the Botín family.
The state collected €260 million via this method. Of this amount, €200 million was paid out by the Botín family
The Tax Agency justified its move by underscoring that the validity of the list was questionable, and that the courts might rule it out as evidence because it had been stolen.
But tax inspectors and other agency workers were upset at what they considered “an undercover tax amnesty,” and filed charges against the agency chief and two top aides. The case was immediately dismissed by the examining court, and the decision was appealed to Madrid’s provincial court.
In November 2011, the Socialists were ousted by the center-right Popular Party (PP), which achieved an absolute majority. With local, regional and general elections coming up again this year, and new party Podemos riding a wave of popular support with its anti-corruption message, both the PP and the Socialists are taking steps to show voters that they are getting tough on wrongdoers.