Chancellor Olaf Scholz faces new probe over German tax fraud scandal

The centre-right opposition in Germany wants to put more pressure on Chancellor Olaf Scholz by starting a parliamentary investigation into his alleged involvement in a huge tax fraud scandal.

The case goes back more than five years, to when Scholz was still mayor of the Hamburg city-state. It is related to the larger “Cum Ex” affair, in which the German government was cheated out of over €30 billion because some banks, companies, and people claimed tax refunds for costs that never happened.

Already in 2021, the issue hovered over the Social Democratic politician’s election campaign, but in the end, it didn’t make much of a difference because Scholz’s possible involvement was still unclear. Now it’s becoming heated again because fresh information has come out that makes his previous defence look bad.

The Hamburg regional parliament aims to call Scholz to an investigation committee this spring, which will be the third time they have done so. Now, the CDU/CSU bloc, which is in the centre-right, also wants to set up an investigation at the national level in the Bundestag.

“We will ask for a parliamentary committee of inquiry into the Scholz-Warburg tax affair in the German Bundestag during the first parliamentary week after Easter,” CDU deputy parliamentary group chairman Mathias Middelberg stated on Tuesday.

According to news reports, a government spokesman said that “as a matter of principle,” Berlin does not comment on choices made by members of the Bundestag “out of respect for the constitutional body.”

Katja Mast, the head whip for the Social Democrats, remarked that the CDU/CSU is not interested in knowledge, but rather in party tactics. “They bring up claims that have been disproven for a long time,” she added, adding that all questions have been answered by the committee in Hamburg.

The CDU/CSU group in parliament has enough votes to set up an investigation committee. The Left party also said it would support a request like this. Investigative committees in parliament can hear from witnesses and experts and ask to see documents. Even while the results are summed up in a report that doesn’t have any legal weight, the political effects could be big, especially for forthcoming elections.

In a letter to the CDU/CSU parliamentary group that POLITICO saw, chairmen Friedrich Merz and Alexander Dobrindt urged that the case should be looked into since it is “significant” for German national politics.