As Taxgate finally wraps up, total tab hits 19 million

Commission investigating alleged snooping into PM’s tax returns wrapping up with a big bill and few answers

Dec 18, 2013

The Taxgate Commission investigating who looked into PM Helle Thorning-Schmidt (S) and her husband Stephen Kinnock’s tax returns has already cost tax payers 19 million kroner, and the costs continue to mount.

With several other commissions also running up big tabs, Speaker of Parliament Mogens Lykketoft (S) said that he wants to start using parliamentary hearings that are both faster and cheaper than commissions.

“We have to try to limit this overuse of resources that has no real benefit,” Lykketoft told Jyllands-Posten.

Lykketoft admitted that Taxgate would have been hard to conduct as a parliamentary commission due to the number of officials involved in the convoluted case. Commissions, on the other hand, operate without a fixed budget and paid for by the Ministry of Justice.

Long, complicated affair
The twisted Taxgate case dates back to June 2010, when the Copenhagen office of tax authority Skat audited then-opposition leader Thorning-Schmidt and Kinnock, who at the time worked and lived part-time in Switzerland. Kinnock did not pay taxes in Denmark, and the investigation ultimately declared that he did not owe Danish taxes.

The confidential audit was leaked to the press, and it was revealed that the Tax Ministry’s then-permanent secretary, Peter Loft, had met with Skat Copenhagen’s director, Erling Andersen, as many as five times, even though the Tax Ministry is barred by law from interfering in specific tax cases. Loft was later fired a few months after Thor Möger Pedersen (SF) became the tax minister.

Peter Arnfeldt, the spin doctor for the then-tax minister, Troels Lund Poulsen (V), was reported to the police for leaking the audit and Poulsen asked for and received a leave of absence from parliament. Even the top aide to former PM Lars Løkke Rasmussen admitted to being involved in meetings about the audit.

A commission was established to look into the leak, which became known as Thorning-Schmidt’s skattesag, or ‘Taxgate’. As the case has plodded on, numerous witnesses have been called to testify and Loft has changed his story several times.

His original written explanation of his actions pointed suspicion further up the chain of command to Poulsen, Arnfeldt and ultimately Rasmussen, who admitted that he had also been involved in meetings about the audit.

During the most recent hearings, former treasury head Steffen Normann Hansen used his time on the stand to paint himself as only a lieutenant to Loft, getting involved only at Loft’s bidding.

Loft, who has in the past said that he was only doing the bidding of his superiors, allowed in recent testimony that he may have indeed influenced the audit in question having text inserted into the audit, which would be a clear abuse of power. The text included references to the PM’s “family situation” which somehow turned into rumours that Kinnock was either bisexual or gay.

The homosexual rumours apparently stem from the couple’s personal accountant, Frode Holm. The commission's investigation turned up a text written by Skat Copenhagen’s tax director Lisbeth Rasmussen that read: “After prolonged discussion, Frode Holm explained that SK [Stephen Kinnock] is bisexual/homosexual.” Holm later regretted making the statement and said that he “made it up”.

While Loft has earlier expressed confusion about the genesis of the text, in his most recent testimony he said that he may have influenced the audit.

“You could say that I changed my explanation,” Loft, who testified again today, told Berlingske newspaper. “But it is only because lines that I thought would not be included did turn up in the audit."

The Taxgate commission received an anonymous letter in September, in which the writer claimed to have evidence that opposition party Venstre conspired to influence the tax audit. Police have now given up their attempts to use DNA evidence found on the letter to find the author, who has never come forward.

A total of 45 witnesses have appeared before the Taxgate commission during 16 months of hearings. Loft and Poulsen appeared again today on what was the final day of hearings.