Jean-Claude, Juncker, the President of the European Commission, has long tried to distance himself from his role as one of the key architects of Luxembourg’s crime-fueled tax haven factory. An excellent new investigation by Newsweek now reminds us of his efforts to display whiter-than-white credentials:
“It’s the tax authorities that develop the specific rules that are applied,” [Juncker] said last September during a hearing of the European Parliament. “I haven’t taken a position on individual tax dossiers because that also isn’t my role. The Luxembourg tax authorities are very allergic to the idea of ministerial interference.”
In March The Economist magazine rang alarm bells (again) about a rise in concentrated market power: a problem where the biggest firms get ever bigger and more like monopolies, making it easy to extract wealth from the rest of us (as opposed to creating wealth.) This, in turn fosters steeper inequality and poverty and reduces economic growth. As they put it:
“High profits across a whole economy can be a sign of sickness. They can signal the existence of firms more adept at siphoning wealth off than creating it afresh, such as those that exploit monopolies. If companies capture more profits than they can spend, it can lead to a shortfall of demand.”
Back in June 2000, three years before TJN’s birth and at a time when nobody was talking about the issues, the charity Oxfam published a seminal document entitled Tax Havens: Releasing the hidden billions for poverty eradication. It was an important part of global tax justice history. We’re delighted that Oxfam has again been extremely active in the area, and now has produced an important, in-depth new report entitled Ending the Era of Tax Havens: Why the UK Government Must Lead the Way, written with the help of TJN’s research Director Alex Cobham.
A guest blog by Dr. Atul K. Shah, Senior Lecturer, Suffolk Business School.
As background to this, it is useful to quote from the work of Prem Sikka, cited in Shah’s research:
“Successive governments have failed to investigate the firms, or prosecute their partners. Instead, the partners of major accountancy firms are given peerages, knighthoods, public accolades and government consultancies, all funded by taxpayers. The same firms have colonised regulatory bodies, fund political parties and provide jobs for former and potential ministers. This penetration of the state has bought them political insurance and their anti-social practices continue to inflict enormous social damage.”
The time has come to investigate KPMG for audit failure at HBOS
It is well known that there was widespread audit and accounting failure in the UK prior to the 2008 Financial Crash. However, not one Big 4 audit firm has been investigated about their unqualified audits of major failed Banks prior to the Financial Crash, despite several appeals from academics like Professor Prem Sikka of Essex University, journalist Ian Fraser, author of Shredded – the truth about the RBS failure, and Richard Murphy.
From Prof. Prem Sikka, via email:
“Auditing itself has become one of the biggest frauds of modern times. When was the last time company auditors drew attention to fiddles, tax dodging, money laundering or their own complicity in financial misdemeanours? The penalties for delivering duff audits, as demonstrated by the banking crash, are virtually non-existent. Instead of any fundamental reforms there are plenty of gestures about tweaking audit reports and now changing auditors, in effect a merry-go-round among the big accounting firms.”