Anne Brorhilker, the former lead prosecutor in Germany’s high-profile cum-ex tax fraud investigations, has raised serious concerns about the legal system’s lenience toward affluent white-collar criminals and tax evaders. In a recent interview, Brorhilker criticized how individuals with access to high-powered legal resources are too easily removed from criminal proceedings. “The financial lobby in Germany is so strong and has so many resources to push through its interests that a counterweight is needed,” she said, reflecting on her decision to leave public service earlier this year to join the activist NGO Finanzwende.
The cum-ex scandal, regarded as one of the biggest tax fraud cases in German history, involves fraudulent trading practices where multiple parties claimed refunds on a single tax payment. The Cologne public prosecutor’s office, which oversees the investigations, has so far brought charges against 18 defendants in 11 separate cases. However, there are still 133 ongoing investigations involving roughly 1,700 suspects. Alarmingly, not a single charge has been filed since Brorhilker stepped down in April, according to a report by Handelsblatt.
Brorhilker, who had been deeply entrenched in the investigations since 2013, attributes the sluggish progress to a combination of factors. She highlighted the cozy relationship between business and politics as a major hindrance, while also pointing to structural inefficiencies within the system. According to Brorhilker, the investigations are hamstrung by an outdated IT infrastructure, insufficient staffing, excessive bureaucracy, and a lack of inter-agency cooperation. “It was not possible for me to organize a video conference with all my investigators or to include everyone in one email,” she lamented, describing how fragmented German data protection laws across states created unnecessary obstacles. “That’s completely absurd — it’s a basic function that doesn’t work in Germany.”
In contrast to Germany, Brorhilker noted that countries like Denmark and France have demonstrated far greater political determination in addressing the cum-ex scandal. Recent developments in Germany, however, have made tackling the issue even harder. For example, the fourth bureaucracy reduction act, which came into effect in October, reduces the required retention period for accounting documents and invoices from 10 years to 8 years, even though the statute of limitations for prosecution remains 15 years. Such records often serve as crucial evidence in cases of tax fraud. Brorhilker views this legislative change as a serious setback, particularly for the cum-cum tax evasion cases. “This is bitter,” she remarked, pointing out that German authorities have thus far failed to investigate 99 percent of the cases, which are believed to have cost the state an estimated €30 billion.
“This law means we will probably never see any of this money again,” Brorhilker concluded, underscoring the gravity of the challenges that lie ahead for Germany in recovering losses and holding perpetrators accountable for one of Europe’s largest tax fraud scandals.
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