Two former PricewaterhouseCoopers employees in Luxembourg have been given suspended sentences and fines by a court there for their role in leaking the data that led to the Luxleaks controversy.
Antoine Deltour and Raphael Halet, both French nationals, were given suspended sentences of 12 and nine months respectively.
French TV journalist Edouard Perrin, who was the first to report on the leaked PwC documents, was acquitted of all charges.
The leaked data exposed the role played by Luxembourg in facilitating aggressive tax avoidance by multinationals. It caused a massive international controversy, and prompted worldwide calls for political action.
Deltour was given a fine of €1,500 while Halet was finded €1,000. Both said they would appeal. Outside of the court, Deltour was greeted by singing supporters.
Whistleblowers
The case was seen as a delicate balancing act for the judge between upholding Luxembourg’s strict secrecy laws and protecting whistleblowers.
The leaked data was shared with the Washington DC-based International Consortium of Investigative Journalists (ICIJ), which organised the Luxleaks project along with media partners around the world, one of which was The Irish Times.
One of Deltour's lawyers, William Bourdon, called the verdict "scandalous". The message of Luxembourg's justice system was for multinationals to "sleep tight", he said.
The trial heard how Deltour had copied 45,000 pages of documents to which he gained access through a glitch in the company‘s servers, which had since been fixed.
Prosecutors say this data and material supplied by Halet was used in the Luxleaks revelations of November 2014 by the ICIJ.
The prosecutor had requested 18-month prison sentences and fines, far less than the five-year maximum for the charges that range from violating secrecy laws to theft and IT fraud.
For Perrin the prosecutor had sought a fine, without specifying how high it should be.
Leaks
The leaked documents showed that companies such as PepsiCo , AIG and Deutsche Bank secured deals from Luxembourg to slash their tax bills. They also showed that Irish multinational Glanbia used the mechanism, and that many non-Irish multinationals that had tax deals with Luxembourg used Irish branches as part of the surrounding tax structures.
ICIJ director Gerard Ryle said the conviction of the whistleblowers was disappointing and set a dangerous precedent, particularly given the clear public interest in the information that was leaked.
“This is a trial that should not have happened in the first place. Antoine, Raphael and Edouard should all have been applauded and thanked for their roles in bringing the issue of corporate tax avoidance to the public’s attention, not dragged through the courts and punished,” he said.
Without the courage of the whistleblowers and the dedication of the journalists who worked on the documents, Europe would not have seen the important debates and tax policy advancements of the past 18 months. This information was clearly in the public interest, and has been of enormous benefit to the citizens of Europe, he said.
While it was heartening to see that Luxembourg had chosen not to criminalise journalism, Ryle said he was deeply concerned that the conviction of the whistleblowers could have a damaging long-term effect on press freedom and on transparency – both of which were pillars of democracy.
Data
The ICIJ has since used other substantial data leaks to organise the Swissleaks and Panama Papers projects, both of which have exposed how secrecy and offshore services can be used to hide assets and avoid taxation.
Transparency International warned that the Luxembourg conviction “hurts the fight against corruption” and called for better whistleblower protection.
Christian Aid Ireland said the public should thank, not punish the former PwC employees.
The whistleblowers exposed scandalous sweetheart tax deals between governments and multinationals, said Sorley McCaughey, Christian Aid Ireland’s head of Advocacy and Policy. “The deals were deeply unfair to the millions of ordinary people and small companies who have no choice but to pay their taxes and who need the hospitals, schools and many other public services funded by tax.”
Even though the sentences handed down were suspended, they sent completely the wrong signal about what the whistleblowers did, he said. For society at large, they were heroes, not villains.
