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Disgraced CEO: "Executives are Role Models"

by Almanax Tue Feb 19th, 2008 at 10:31:36 AM EST

Ah, the irony!

Klaus-Gerhard Zumwinkel was dismissed as CEO of the German Postal Service after a razzia due to suspected tax evasion of one million Euros last Thursday. Now the German news-site Spiegel.de reports that the most recent issue of the Postal Service's internal newspaper - published and distributed to 400,000 current and former staff on Wednesday - features an article entitled: "Executives are Role Models".

Promoted by DoDo

The article reports on a meeting of top-managers of the German Postal service and quotes now disgraced Zumwinkel as saying that the "true key to success" was the style of leadership, that executives must set an example in moral values. "You are the key to success", Zumwinkel told his top staff, "you are the top leaders, the role models".

Zumwinkel was the first prominent person whose criminal dealings became public after the German Secret Service paid an informant EUR 5 million for a disc full of internal customer data of LGT - the private bank of the Princes of Liechtenstein.

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Disgraced CEO: "Executives are Role Models" | 17 comments (17 topical, 0 editorial, 0 hidden)
Re: Disgraced CEO: "Executives (none / 1)
There is nothing strange about his views, as long as you keep in mind that a company can pay lower salaries if their employees cheat on their taxes. So Zumwinkel was giving a good example, that when folowed by his employees would have significantly reduced the salary expenses of the company.
by GreatZamfir on Tue Feb 19th, 2008 at 07:00:22 AM EST
Re: Disgraced CEO: "Executives (none / 1)
That might be a cynical rationalist view, but the fact is that there seems to be a alrge amount of evasion going on. It's hard to call it evasion (implying illegality) in the UK as most of the worst abuses seem to be legal, even encouraged. After all, neo-liberalism probably views tax, like wages, to be a "cost" that it is righteous to avoid.

I think he should be an example. Hang him from the gates of the City as a warning to others. But only after anybody on average wages or below is offered the opportunity to pelt any excrement or rotten fruit at him as they like.

Vindictive ?? Me ??

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Tue Feb 19th, 2008 at 08:11:09 AM EST
[ Parent ]
Re: Disgraced CEO: "Executives (none / 0)
Only joking...

I was thinking that if a lot of guys like him get fired, we have a beautiful experiment about the way the 'market determines CEO pay'.

After all, if this guy was payed a competitive salary, than there must loads of foreign companies willing to hire him for million or so less than his last pay.

by GreatZamfir on Tue Feb 19th, 2008 at 08:39:19 AM EST
[ Parent ]
Unfortunately (4.00 / 3)
this is not a joke. what you are proposing is exactly what the neolibs would dream of. Pay people less, and let them make up the difference by not paying taxes. It's just efficient optimisation. Better to have that money in the hands of the private sector, where it can be perfectly allocated, than in the grubby, wasteful hands of the government.

And, as you point out, it's even better if employees cheat on their taxes themselves, because that way the company is not liable and its (increased) profits are safe...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Feb 19th, 2008 at 11:08:02 AM EST
[ Parent ]
Re: Unfortunately (none / 1)
Yeah, I know. It becomes especially irritating when it is combined with some 'revealed preferences' argument that basically makes market allocation perfect by definition.
by GreatZamfir on Wed Feb 20th, 2008 at 05:11:00 AM EST
[ Parent ]
Re: Disgraced CEO: Executives are Role Models (4.00 / 2)
Thanks for diarising this!

Though the secret service paid €5 million, and the data is only up to 2005, the full scale of tax evasion may be more than a thousand rich German tax evaders with funds totalling up to €4 billion, of which authorities may recover hundreds of millions. Some culprits are already trying to forestall more serious punishment by reporting themselves to police.

Another angle of this giant scandal is that tax heaven Liechtenstein is outraged at this case of offensive espionage...

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Feb 19th, 2008 at 10:30:14 AM EST
Not only Liechtenstein (4.00 / 5)
Our good friend Paul Betts, whom I've quoted elsewhere today already, had this nugget in his column:


The tiny principality nestled between Switzerland and Austria was once one of the poorest countries in Europe. But since the 1920s, when it passed some extremely strict asset protection and privacy laws, it has become one of the world's wealthiest nations.

It's become wealthy, wo what it's doing is right.


The Alpine principality is in a state of high anxiety. For the second time, Liechtenstein's sacrosanct banking secrecy has been breached by a disgruntled employee working for one of the country's multitude of "letter-box" financial institutions. A third bank also appears to have been blackmailed by a rogue employee, but it ultimately decided to pay a "ransom" to avoid disclosing the names of its clients to the German tax authorities.

This is bad news for wealthy tax avoiders. The latest scandal may have cost the job and reputation of one of Germany's most influential businessmen - Klaus Zumwinkel, Deutsche Post chief executive, - and is causing a growing political storm in Germany. But it could have far wider repercussions. If tax havens can no longer guarantee maximum confidentiality, what is the point of parking money in them?

Can you imagine? What is the world coming to, if you can no longer "avoid" taxes without stress? You can become subject to opprobrium and rogue criminalilty, in the form of blackmailers and "disgruntled employees."

The sheer chtuzpah of neglecting to point out that these tax "avoiders" are criminals, nothing else, and that the outrage is quite justified?!

But no, they are making lots of money, so they're the good guys...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Feb 19th, 2008 at 11:05:20 AM EST
[ Parent ]
Re: Not only Liechtenstein (none / 1)
...and they take revenge, like the mafia. See top-level comment.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Feb 19th, 2008 at 11:29:28 AM EST
[ Parent ]
Re: (4.00 / 2)
In his defense though, he did say "YOU are the to success" and "YOU are role models", not "I".

/snark

Mikhail from SF

by Tsarrio (dj_tsar@yahoo.com) on Tue Feb 19th, 2008 at 11:07:34 AM EST
The Empire Strikes Back (4.00 / 3)
A certain American business propaganda outletnewspaper (I won't link to the assholes) revealed the name and location of the source of the man who sold the Liechtenstein bank data.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Feb 19th, 2008 at 11:27:30 AM EST
Re: The Empire Strikes Back (none / 1)
Oh, beuatiful. Now a mob of outraged WSJers can protest in front of his house and demand lynching! Or they could at least hire people to picket for them...
by GreatZamfir on Wed Feb 20th, 2008 at 05:14:29 AM EST
[ Parent ]
Leaks and tax shelters (4.00 / 7)
Let me repost here about the recent troubles of wikileaks.
Bank Julius Baer vs. Wikileaks - Wikileaks

The largest Swiss bank specializing in hiding the assets of the ultra-rich, Bank Julius Baer, says it will file federal US proceedings against the transparency group Wikileaks by Friday.

Over the last two weeks, Wikileaks has released several hundred documents from a Swiss banking whistleblower purportedly showing offshore tax evasion and money laundering by extremely wealthy and in some cases, politically sensitive, clients from the US, Europe, China and Peru.

Part of the data was leaked to US and German tax authorities in 2005 and the Wall Street Journal ran an article on the act of leaking but not those mentioned in the material. The detail and specific allegations have previously been unavailable to the public.

The bank concerned, Julius Baer (BJB), which specializes in asset hiding, has briefed Hollywood media lawyers Lavely and Singer, who like to describe themselves as "all-around bad cop for stars from Bruce Willis and Arnold Schwarzenegger to Jim Carrey and Celine Dion.".

Strangely, Lavely and Singer have refused to put in writing either the name of their client or name of the documents concerned.

Wikileaks became unreachable at their .org address after a California court issued an injunction for Dynadot to no longer resolve this domain. They were still reachable by IP: 88.80.13.160, as well as through a variety of other domains, as of last night. Before leaving work they were up, though extremely slow, but I did manage to copy the bit of text above regarding this spot of trouble related to leaking documents of the Bank Julius Baer. Now the server seems completely unreachable. Prior to this court order, they suffered some other ills during the weekend:
someone:

Wikileaks survives censorship, ddos, fire - Wikileaks

It looks as if the interesting and controversial, Wikileaks website, which promises "anonymous, untraceable, uncensorable" publication of leaked documents from whistleblowers, and which recently published the devastating No2ID Campaign annotated leaked UK National Identity Scheme document , is weathering some technical hitches and legal litigation attacks.

It seems that there has been a fire in an Uninterruptible Power Supply, which took the WikiLeaks web servers offline for much of Saturday, at their Swedish co-location hosting company, PRQ Inet, which has experience of attempts at censorship, through their former hosting of the peer to peer filesharing and political phenomenon, The Pirate Bay.

[editor: shortly before the fire unknown persons launched a 500Mbps distributed denial of service attack. It is not known if or how the attack is related to the other events described in this article].

More seriously and for the longer term, the brand name of WikiLeaks.org is no longer online, due to a Temporary Restraining Order issued by the California Northern District Court in San Francisco, aimed at a Domain Name Registrar, rather than just the actual publishers of controversial material, who happen to be outside of US legal jurisdiction..

See this partial public list of Wikileaks Cover Names for alternative URLs which have not yet been censored.

Whatever you do, don't mess with tax shelters. These people have lots of money, resources and no scruples!
by someone (s0me1smail(a)gmail(d)com) on Tue Feb 19th, 2008 at 12:43:09 PM EST
Re: Leaks and tax shelters (4.00 / 5)
And they are back! The story of the bank and the suspected leaker is quite nasty:
Clouds on the Cayman tax heaven - Wikileaks
This is the story of Rudolf Elmer of Switzerland, former Chief Operating Officer of Bank Julius Baer on the Cayman Islands. The story of a man suspected of leaking to the press information about the activities of a Swiss bank specialized in hiding and laundering the money of the ultra rich through anonymizing offshore trust structures. It also is the story of a man and his family living with the consequences of being suspected of fouling the nest of a traditional Swiss bank engaging in dubious activities. This story might differ from previous one's related to this issue, mainly because while researching the story, Rudolf Elmer has also been asked for his account of things.
...
It became essentially clear that he was a prime suspect and Bank Julius Baer wanted to get rid of him. Personal suggestions by his manager to go out diving, possibly as deep as possible, as well as anonymous phone calls to his family suggesting they should leave the country for their own good, did not make the whole situation much easier for the Elmers. As can be derived from the transcript and personal communication with him, Rudolf Elmer felt very much like being home on the Caymans, much in contrast to Switzerland, and the same can be said for his family.
...
According to Elmer (most of the allegations appear in his Dec 2007 court documents), he was subject to more or less permanent observation, as was his family. His then 6-year old daughter got followed on her way to school/kindergarden, his wife and daughter were even engaged in a chase on a Swiss autobahn by the Ryffel AG, which had to be intercepted by the Police (police confirmed). Cars driving in the dead-end street he lived in at night, annoying his neighbours and putting further pressure on him. The phone calls, that started in the Caymans followed to Switzerland. The situation again became very uncomfortable, with Elmer's 8-year old daughter suffering trauma from the bizarre lifestyle her family was forced into. Elmer also was offered CHF 500,000 by the bank, according to his statement in an effort to buy his silence; he turned down the offer and asked the bank to be charged with bribery, but the police found no law against bribing private persons.
by someone (s0me1smail(a)gmail(d)com) on Tue Feb 19th, 2008 at 01:10:33 PM EST
[ Parent ]
Re: Leaks and tax shelters (none / 1)
When is the Union going to get its head out of its ass and crack down on flag-of-convenience countries? It's not like we don't have a lot of creative and painful ways to threaten their cartoon economies. For that matter, if push comes to shove, we could just regime change them.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 20th, 2008 at 02:32:14 PM EST
[ Parent ]
Re: Leaks and tax shelters (4.00 / 2)
Ahh, but you just don't get it. As reported in the Salon, the cause of tax evasion are taxes
Germany has always had a problem with tax evasion, mainly because of relatively high marginal tax rates. Slovakia with its 19% flat tax has no such problem. Austria, which has one of the lowest tax rates of the industrialised countries, has no such problem either, even though, unlike Germany, it has a direct border with Liechtenstein. Nor have the Swiss. The French have a problem with Switzerland and Monaco. The Italians have a problem with Monaco. And the Spanish have a problem with Andorra. But nobody has bigger problems than Germany (which has problems with Luxembourg, Liechtenstein, Switzerland and even Austria). Germany is a country where business elites enjoy among the lowest pay packages, and the highest marginal taxes.
...
The bottomline is that the purpose of this tax razzia is to feed the German public's unsatiable anti-capitalist mood, but it is not going to make any fundamental difference. It is a macroeconomic non-event. The only way for Germany to reduce tax evasion is to reduce marginal taxes. A criminal mind causes an individual to be a tax evader. But on a macroeconomic scale, it is taxes that cause tax evasion, and nothing else.
If all our nations would just participate in the race for the bottom in tax leagues, there would be no problem. But noooooo. They give in to the public's unsatiable anti-capitalist mood, and don't realise that he free movement of transnational capital is just that, free movement, which is freedom and good and inevitable and inarguable, and cannot be stopped. It means that money flows to the most efficient locations, which is right now in Lichtenstein, or the Caymans or Jersey. If they'd just see the light and realise that a fair tax is a flat tax, and at not too high rates, we'd see many less evaders. Or why not just make people pay for the services they use? That's the real fair way. No poor people free-riders no more! No taxes, no tax evaders. It's that simple!
by someone (s0me1smail(a)gmail(d)com) on Wed Feb 20th, 2008 at 03:54:52 PM EST
[ Parent ]
<puke> (4.00 / 2)
"If the German government succeeds to destroy Liechtenstein's business model,"

"If the Italian government succeeds in destroying Sicily's business model,"

Will somebody please clarify the difference between these two? 'Cause I sure don't see any.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 20th, 2008 at 06:00:57 PM EST
[ Parent ]
Re: Disgraced CEO: (none / 1)
Taxes are evil for the big companies..ity's fine if the middle class pays them .. though I might say the contrary, so that we can keep the police state. so it is Ok...

but you do not really need that money from the corprotation or rich guys..t hat money would go to things like healthc are and allt hat stuff that itis no need and impinges in my liberty.

life is tough.. tax is tough if you are middle clas..taxes are librul.. or commie...

and not make me start about those nasty inehr.. I mean death taxes... geeeee taxing an uberrich rich person... jesuschrist...

Oh.. and by t e way.. Paris Hilton should go to prison without taxes, she is inmoral... or wait.. who pays prisons?..oh yes the middle class.

So it is improtant that we middle class pay taxes so the uberrich that we morally do nto like can go to prison for braking god's will..

and al that stuff.

did i make anysense?... I hope... not

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Tue Feb 19th, 2008 at 01:21:55 PM EST
Disgraced CEO: "Executives are Role Models" | 17 comments (17 topical, 0 editorial, 0 hidden)


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