“Da accusatore ad accusato” writes an Italian news site about Wopke Hoekstra – from prosecutor to defendant. The name of the CDA leader and finance minister has been on a list since Sunday that most government officials do not want to be on: one with politicians and other dignitaries who put their money in or invest through tax havens. Hoekstra stands between Hamad Bin Jassim Al Thani, Sheikh of Qatar, Sebastian Pinera, President of Chile, Denis Sassou Nguesso, President of Congo and Guillermo Lasso Mendoza, President of Ecuador. The list came out through the journalists’ collective International Consortium of Investigative Journalists (ICIJ) – in the Netherlands through the media involved Fidelity, The Financial Times and Investico.
Some Italian media, such as the magazine L’Espresso, include Hoekstra’s harsh attitude during the height of the corona crisis. The economies of Southern European countries had been hit hard, other European countries were willing to offer financial support, but Wopke Hoekstra kept a tight squeeze. He first wanted to set conditions for reforms and to know why those countries had not built up buffers. Hoekstra thus pointed out the shortcomings in their own financial household book and now his is on the street.
Don’t break any rules
In the leaked documents that have been published since Sunday, the so-called Pandora Papers, Hoekstra is the Dutch parenthesis. In 2009, during the euro crisis, he invested more than 25,000 euros in a friend’s company, which offers safari holidays in Africa. The investment was made through a letterbox company in the British Virgin Islands, which is known as one of the largest tax havens in the world.
Hoekstra still owned the shares when he started as a senator for the CDA in 2011 – he was spokesman for Finance and vice-chairman of the committee of the same name – but did not report it to the Senate. As a senator, Hoekstra did contribute ideas about the international fight against tax avoidance.
Hoekstra only sold his shares in 2017, a week before he was sworn in as Minister of Finance. He said he donated the return, about 4,800 euros, to a good cause.
Hoekstra defended himself after the publications about his investments by stating on Twitter that he was not a tax spokesperson in the Senate, did not break any rules for senators and always stated the investments in his tax return. Hoekstra also states that before he became a minister, he “shared all this information with the state lawyer and therefore with the formateur” – that was Mark Rutte. And: “Twelve years ago I didn’t realize where the company was located. Of course I should have looked more into that afterwards.”
This last point is questionable. Other investors in the same project tell Trouw, one of the newspapers that has the documents, that the location was indeed on the official documents of the company. Hoekstra reports to Trouw that he never read annual reports of the company in which he had invested. But if Hoekstra states that he did not know that he had invested through a tax haven, the question remains: what did he inform the state lawyer about in 2017?
Intention in the coalition agreement
When he became Minister of Finance, Hoekstra committed himself to the coalition agreement of the third Rutte cabinet. And thus also the intention stated therein: the government wanted to ‘make an international effort to tackle tax havens’ and ‘set a good example’ itself by taking measures: ‘a withholding tax on interest and royalties on outgoing flows to countries with very low taxes (low tax jurisdictions)”.
In short: as a minister, Hoekstra tried to tackle what he himself maintained until a week before he was sworn in as a minister by using it. As if a Minister of Justice ran a coffee shop before being sworn in and then wanted to curb the policy of tolerance. Hoekstra does not seem to have broken any rules for the time being, but politics is also about morality – especially in the CDA, the party he has been leading since December. Incidentally, tackling tax avoidance was part of the duties of the State Secretary: first Menno Snel, but when he resigned because of the Allowances affair, it became Hans Vijlbrief.
Hoekstra did not break the rules but was also blind to the moral question. According to the system, he made no mistakes, but if something is allowed, do you have to want it?
CDA is against
Not according to the party Hoekstra leads. The CDA is outspoken about tax evasion and avoidance. The latter is not punishable in the Netherlands. In the election manifesto from 2017 wrote the CDA that the Netherlands “must take firm action against companies and multinationals that evade or evade tax with smart constructions”. The party wanted European agreements to be made so that companies ‘no longer have recourse’ [zouden] search in all kinds of tax havens.” And: “In the Netherlands we can be stricter about the abuse of our own network of tax treaties.”
In the most recent In this year’s election program of the CDA, those passages have been deleted and replaced by the ambition that internationally operating companies pay taxes in the country where they make a profit. “Within the OECD we make firm agreements about fairer taxation for internationally operating companies and if this takes too long, European agreements are possible.” The program is more concrete about tackling the Dutch role in facilitating tax avoidance. “We are taking further steps to no longer be a transition country. There is no place for letterbox companies without real economic activities. For example, the trust sector can no longer provide domicile or provide directors to conduit companies and letterbox companies.”