Hamburg inquiry told of mismatch in Scholz's 'cum-ex' statements

German Chancellor Olaf Scholz made contradictory statements about the so-called cum-ex trading scam to a Hamburg parliament committee during his former tenure as finance minister, witnesses told an inquiry in the city on Friday.

The huge fraud, in which tax refunds on share sales were simultaneously claimed by two parties, is estimated to have cost Germany's treasury €5 billion ($5.5 billion). The investigation has also touched upon the country's current leader, and could trigger an inquiry at the national level.

Former Hamburg parliament member Fabio de Masi told the body's investigation committee that, in 2020, Scholz said about a meeting with Warburg Bank shareholder Christian Olearius that he "could not comment on the conversation's contents due to tax secrecy."

The inquiry is to establish whether Hamburg politicians from Scholz' centre-left Social Democrats influenced the tax treatment of Warburg Bank. Scholz, who was the city's mayor at the time, denies such accusations.

According to de Masi, it was not until a third committee meeting in September 2020 that Scholz claimed gaps in his memory. De Masi said he had felt misled as a finance committee member.

National lawmaker Sebastian Brehm also said Scholz had told a finance committee meeting in March 2020 that he had acted correctly and could not give details because of tax confidentiality. "I found that contradictory," said Brehm.

Since no verbatim minutes were taken at the committee meetings, the inquiry aims to clarify whether Scholz' statements on the meetings were still based on his own, active recollection.

After first meetings with Warburg bankers in Hamburg's city hall, the tax office for large companies had initially waived tax reclaims of €47 million against the bank in 2016 when the statute of limitations expired. A further €43 million were only claimed in 2017 on the instructions of the Finance Ministry, before the statute of limitations came into effect.

Warburg Bank later had to pay back more than €176 million in wrongly refunded taxes due to a court ruling, but is still trying to take legal action against the amended tax assessments.

The conservative opposition in the federal parliament, or Bundestag, wants to set up another committee of inquiry and could potentially muster the necessary 25% of lawmakers' votes needed to do this.