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Tax authorities in Denmark buy 'Panama Papers' evidence (dw.com)
88 points by sjreese on Sept 30, 2016 | hide | past | favorite | 64 comments


I don't understand how buying stolen property is suddenly not illegal, when it is the tax authorities doing it. But there are almost no limits to what the tax authorities can get away with in Denmark.

This is the press release from the Danish tax authorities, confirming the purchase: http://www.skat.dk/SKAT.aspx?oId=2234275&vId=0


Even if buying was illegal, the United States have a much stronger "fruit of the poisonous tree" doctrine than many other countries.

Germany for example doesn't have that, at all, as our Federal Constitutional Court has rules in exactly such a case (tax evasion lists bought by a German state and used to search someone's home).

I wouldn't be surprised if Denmark did it the same way.


This was not done of behalf of the government so "fruit of the poisonous tree" doctrine does not apply. If someone robs your house and finds someone trapped in the basement they can call the cops.


I wonder about the fruit of the poisonous tree in this case, though. IANAL, so I am honestly curious if this doctrine applies to civil proceedings.

Secondly, the tax offices presumably have a right to carry out audits and don't need to substantiate why. I would think that they could use any method ranging from a dice roll to an anonymous tip on a hotline to trigger an audit. The trigger would not be used as evidence in the trial... it may be from a jealous lover who's lying, but if the audit reveals you didn't pay your taxes properly, well there you go.

Thirdly, it may not even matter. Saying 'we have this material' is a great bluff on it's own and could be used to get rule breakers to come clean on their own, as well as sending a message to would-be tax dodgers that it's getting harder and harder to cover your tracks.

This doesn't say anything about the moral issue of tacitly condoning stealing documents by paying for them, though.


Does this stronger "fruit of the poisonous tree" doctrine of the US does apply for all those three letter agencies in your opinion? Or just for the RSI?


Doesn't the CIA (like all external intelligence agencies in all countries) pretty much exist to obtain information through extra-level means?


Yes. All intelligenge agencies are by definition criminal organizations outside their home country.

While conducting these clandestine operations they may also collect information which could convict someone domestically in court... but US courts will not permit that evidence to be submitted as it was collected illegally.


And that's where parallel construction was born.

https://en.wikipedia.org/wiki/Parallel_construction


There are lots three letter agencies which are not external intelligence agencies, like the DEA or FBI.

External intelligence agencies would be kind of an exemption. But not in the case of the CIA, as they give information to internal intelligence agencies, although they shouldn't, at least by the law.


CIA is a foreign intelligence agency and in their opinion some protections do no apply to foreigners.


Well, "superior national interests" are invoked for so many much more serious things nowadays even if it has nothing to do with crucial interests.

Tax evasion is actually a crucial, existential problem for several countries. More so than terrorism. I, for one, welcome these exceptional measures in this case.


This wouldn't be possible in Belgium, AFAIK. A judge would throw this evidence out.


Surprisingly even Switzerland has bought stolen information to get tax information.


Isn't it basically a variation on giving drug dealers lenient sentences to find out who the bigger players are?


This is a case where you have to weight both sides. On one side it is leaked documents, on the other hand it would be useless if people just paid taxes as they should. I'm okay with them doing this to catch tax evaders. Ideally all states would freely exchange information about financial transactions and tax payments for companies - rendering this useless.


In an ideal society we won't need the law at all. The society we have however isn't ideal, and so we have laws to keep it from decending into chaos and tyranny.

The people at the NSA who decided to build dragnet surveillance didn't sit down one day and said "hey, I'm feeling evil today, let's violate some laws for lulz", they said "omg terrorists, this is a case where we have to weigh both sides". When cops do illegal searches, they're convinced they're weighing both sides in the interests of getting a criminal of the street.

At the very least, you lose any credibility to criticise the government when they bend the law to catch some bad guys, if you're OK with them bending the law to catch other bad guys.

There are some things that are more important than catching some asshole tax cheats. Preservation of the rule of law is one such thing.


I'm not convinced that all of those responsible for dragnet surveillance did so because of terrorists.

I'm convinced some of them, most likely those who gave it the green light in the first place, did so because they recognised what an incredible effective implement of population control it is.

It's less about the terrorism and more about a safety net for the entrenched and privileged in a future of massive civil unrest.


I think you're inferring malicious intent when a simpler explanation is money. Maybe those who green lighted this saw an opportunity to poor endless funds into their defense contractor friends' businesses.


There is a very significant difference between buying a targeted leak with information that the tax authority should have had in the first place, and creating a catch everything surveillance. They're not even remotely comparable, and trying to make them so is a poor argument.

There is already a case going against SKAT about this, so that will decide if it is okay or not in the future as well. Besides, when the tax minister order this, arguable, the legislative powers have already decided that this is okay, and anything short of the federal court deciding that it is against the Constitution of Denmark, means it's already within the law.


They're more comparable than you think. This purchase has just legitimized a market for stolen information. The message is to hack and offer up for sale anything you think would be of interest to the government.


Good. The dragnets and illegal spying is not going away, period, so right now at least we might have some counter-balance to that (Find black money from state-level corruption, illegal or untaxed profits from international behemoths, etc)


Yes, because two wrongs make a right. You just need to spread the proceeds from crimes wide enough, then everyone's happy. What could possibly go wrong?


> They're more comparable than you think.

Enlighten me. Please. Because they're vastly different from my perspective.

* One is a limited scope information about people breaking some specific laws - the information is verified to be useful by sampling. The action breaks a law created by the parliament, and that can be changed by a simple vote in the parliament.

* The other is a mass surveillance without a limited scope, not targeting any specific crime and no evidence what so ever about its effectiveness. It is a breach of The Consitution of Denmark §72.


It's not "limited scope". This information was obtained as part of a very broadly scoped illegal action. Also, this cut of data does not "target[] any specific crime" -- it will contain information on Danish citizen who are not in any way breaching danish law (either because they are using these shell companies for legitimate purposes, or because they aren't resident and thus not liable for tax, in Denmark). That initial action doesn't become "limited" just because the criminals filtered it down. This is exactly the same as NSA dragneting and then only passing on information when they thing they find something bad.

But even with that, "limited scope" and "targeting specific crimes" aren't magic get-out-of-jail-free cards. If I design (from a secure location that won't prosecute or extradite me for doing so) a worm to infect peoples computers, and once there, quietly scan these computers for evidence of pirated movies (very targeted, very limited scope) and only when it finds evidence of such does it phone home (and only with the evidence, nothing more is ever collected or shared). I then sell this information to an aggressive anti-piracy-litigator. Is this now OK, because it's "limited scope information about people breaking some specific laws - the information is verified to be useful by sampling"?

(Also, on laws: If the law can be changed willy-nilly to suit whatever the government wants to do, you don't have the rule of law. This is bad. It is doubly bad when you go and change the law, not because you have a principled belief that it's bad, but because it prevents you from doing a specific thing. In practise, this is the same as the law not applying to the government. The Danish constitution is tragically toothless, as most of the relevant articles contain the phrase "except where an special exemption is created in law" - for an example for the inviolability of the home, more than 200 such exemptions exists.)


Oh please. This is one of the few countries in the world where you can still hide your wealth and avoid paying taxes. Govnerments around the world are working on, and have for a long time, to create deals to exchange information. If what you're doing is within the law then SKAT gains zero new information, because they already know about every financial transactions they are supposed to know about.

Here SKAT had an oppotunity to gain that information anyway, and that is a clear signal to criminals that they shouldn't feel safe hiding behind some beneficial countrys laws.

Your example with a worm, is a straw man. Infecting millions of computers and shifting through it all to collect doubtful infomation is hardly the same. SKAT have been trying to get their hands on this infomation for decades, through legitimate deals. Now someone presents it to them via a different channel. If you want it to be comparable, it is someone infiltrating a torrent tracker and use information from that to sell to collection agencies. They still cannot use the information for anything but prompt a real investigation. After all we don't know if the information is real or not. If you want to do that, be my guest - I don't have a problem with it.

About the law, it cannot be changed willy-nilly, it still have to be voted for in the parliament.


The comparison is a country performing unethical things vs. paying another actor to do unethical things.

It sounds like you are making an "ends justify the means" argument, but I don't think that absolves them of supporting black hat activities.


> Preservation of the rule of law is one such thing.

Indeed it is but would you care to point out which of the laws skat is violating?


The one they have to change in order to not be breaking is a good start.

Also, "the law" != "the rule of law" (in Danish, retssikkerhed).


Do you also have a problem with illegal wire tapping if as a result a terrorist attack is prevented? Or paying money to an informant (possibly an insider) to uncover drug traffickers?


    > Do you also have a problem
    > with illegal wire tapping if
    > as a result a terrorist
    > attack is prevented?
Yes? There's a reason it's illegal.


Can we apply that reasoning to certain drugs or alcohol?


Are you confusing "there's a reason why it's illegal" with "anything that's illegal must have a good reason for being so"?


Dear downvoters, cool down. The question targeted the fact that most people do accept illegal acquisition of information as long as they agree with the purpose, but strongly object breaking the law if they do not support the purpose, like forcing people to pay taxes.


Yes


All states routinely break their own "rules". I don't know why anyone would be surprised by this.


Am I the only one who got the impression that this is strange!?

Why do the journalists don't share the data with the governments for free? Establishing trust that the government is serious and real should be possible for them.

Could the anonymous source just be a journalist who wants to profit of the data?

I'm all for fighting tax avoidance but considering that most of the EU member states have an interest in the data this could be quite a sum of cash that is someone obtaining from an illegal hack. It's also not clear who benefits here. It's pretty shady isn't it? Even it's legal.


In most jurisdictions (and I know this is true in Belgium), you cannot use illegally / stolen data as evidence in a trial. So there would be no point purchasing this data, because it would be thrown out in court. Maybe it could be used to pressure someone into taking some sort of settlement?


In Germany, while the use of the data was still uncertain, they implemented a possibility to pay back taxes and some fee if you self-indict your tax avoidance and you would have been out of trouble. This was pretty popular and gained more money than the data they bought if I remember this correctly.


I believe you mean evasion. Nothing illegal about avoidance.


> Why do the journalists don't share the data with the governments for free?

Funnily, the second largest media network responsible for this leak belongs to the German government (NDR). They cooperate with SZ all the time. So, a branch of the German government actually already has access.

That leads to the question: Why don’t the governments share the data with each other for free? Or, as not even the German government itself gets access: Why doesn’t the government share the data with itself?


No, you've got German public broadcasting totally wrong. NDR is not related to the government in any way. It's not even funded by taxes but they have their own agency for that in order to not meddle with political influence.

They could share the data if they want with the governments but the government has no say and no way to get the data with any legal means.


> but the government has no say and no way to get the data with any legal means.

Ever looked at the members of the Rundfunkrat? In theory, it’s independent, in reality...


I live in Denmark, so this is being bought with my tax money, and I see no problem with this. I'm sure that most of the money there is legal and was correctly taxed where applicable but it's good that the few who might stealing from the rest of us get potentially brought to justice.


I wonder if this would fly in US.

> and I see no problem with this

It goes against fruit of the poisonous tree principle[1], what Danish government is doing should be wrong because it tacitly approves future illegal activity.

[1] https://en.wikipedia.org/wiki/Fruit_of_the_poisonous_tree


There is no such thing as invalid evidence in Denmark, merely because it was obtained illegally. You might be on trial if you obtained evidence illegally, but the evidence itself will be usable in a courtroom.


They're not approving illegal activity in Denmark, they're tacitly approving activity that may or may not be legal on a jurisdiction that is outside of the scope of its parent state.

Regardless, that doctrine isn't used in most of Europe; the linked article even points that out: where illegally obtained evidence is usually admissible in court (depending on each state's law) but the gatherer faces charges for that.


Tax authorities pay taxes for the purchase of stolen documents. Quite funny but also nice to see that Panama Papers will receive some public scrutiny.


German states (most notably Northrhine-Westphalia) have been buying tax evader lists for years, sparking lots of public debate.

Switzerland and Lichtenstein really hate that.


I'm mostly amused not by the fact they bought stolen document, but paid tax on this transaction. This speaks to me that there are laws and there are taxes. Laws are fuzzy but taxes are sure.


"Spy tax", even. You can't make this up.


> Switzerland and Lichtenstein really hate that.

On economic terms, moral terms or legal terms?


Ostensibly on moral and legal terms, but really on economic terms (and because it's Germany -- the US were much harsher towards Switzerland, but the Swiss didn't complain as loudly and simply complied).


The Baltic states' tax authorities are to do the same. Heard a debate on the radio few days ago, with the host asking "is this even legal" and the chief of the tax authority responded: "and is this legal to evade taxes?"


That's a pretty shitty counter question by the tax authority guy. There are exceptional reasons for laws that bind the hands of the authorities


Wouldn't illegally obtained evidence be inadmissible in a court of law?


How will a court view the way in which this evidence was obtained? And what about the veracity? Surely anyone who appears in the purchased data will say that it is unreliable.


This kind of data is used to conduct investigations. People aren't charged based on the data on this evidence but rather the authorities use this data in order to know where and at what to look for fraud.


After his house has been searched there will be ample evidence.

The standard for investigating someone is much, much lower than for convicting someone. Such tax evasion lists are easily enough to do an investigation.


I'm not completely sure, but I think SKAT (the Danish tax authorities) handle everything, outside the courts, when dealing with tax avoidance situations.


Doesn't really matter. They use this information to figure out where to collect the real evidence. This is used purely to pinpoint what information to obtain through official channels.


In which currency is "805,000 euros ($903,000) " a round number (say a million)? That could be a hint to origin.


Denmark.

6.000.000 DKK ~ 805.000 EUR


805000€ or $903000 is already round enough (800000€ / $900000). You are not going to get rounder than that, since there are no hints about date, exchange commissions, ...


They might try to use the information to see if they can get some of the €800.000.000 back lost:

https://www.theguardian.com/business/2015/aug/27/denmark-fea...




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