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Could this tax theft be prevented? | TIME ONLINE


The man who is supposed to be John Baker here is visibly nervous. His gaze wanders only briefly through the floor-to-ceiling hotel room windows over the southern bank of the Thames. Then he sits down in a yellow armchair and repeats the condition for telling his story: absolute anonymity.

John Baker is scared. His former employer Merrill Lynch, one of the once largest investment banks in the world, could hunt her lawyers on him. He fears his former colleagues from the London trading room even more – many of them are "billionaire gangsters," says Baker. "I'm afraid of the bank's retaliation. And I'm afraid of physical retaliation from some of the men who were involved in the deals. They're not very nice people."

The businesses that Baker speaks of, and with which some other Merrill-Lynch employees struggle, serve only one purpose: to pillage the treasury. To this end, shares with a value of billions are traded in circles. The damage caused by Cum-Ex alone, a variant of these tax-driven deals, is estimated in Germany at more than ten billion euros, the damage from related tax-driven stock transactions is many times higher. The European Financial Market Authority is dealing with the matter, prosecutors in Cologne, Frankfurt am Main and Munich are investigating around 400 suspects. In Bonn and Wiesbaden the case is already occupying the courts. The Bonn judge called Cum-Ex explicitly illegal.

Two of the main suspects in these processes worked on Merrill Lynch, in the early 2000s, the bank was a kind of training center for tax traders: from there, knowledge about these transactions spread to the international financial industry. Merchants who had learned the business from Merrill Lynch switched to other large banks, including German ones.

Baker has worked at Merrill Lynch for years. His story takes us to the heart of this greatest tax robbery ever. Where the deals were made: in the City of London, one of the largest financial centers in the world.

For the first time, Baker speaks publicly about what he has experienced at Merrill Lynch. It's about Cum-Ex and similar deals. But it is also about an investigation by the US Senate, which warned in 2008 of the raid that it would go to the United States undermined – and really ignited him in Europe. And it's about billions of taxes, the robbery of which could have been prevented if American and German authorities had exchanged ideas. This is how Baker tells of the impotence of national supervisors when they come across internationally networked bankers.

Reporters from ZEIT ONLINE and ARD magazine interviewed for two hours panorama Baker. The television viewers will only be able to recognize his silhouette later, his voice will be repeated. The role he played in the trading room cannot be described here either. Absolute anonymity.

The tax deals are controlled and funded from New York, but Merrill Lynch's tax dealers work in London.
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Baker's story begins at Merrill Lynch's London headquarters at the beginning of the millennium. Stock traders sit in long rows at desks, in front of them are monitors with rows of numbers, curves and stock market news. The screens are only missing in one corner of the trading room. There the tables are loaded with books: tax laws, international tax treaties, accounting rules of various countries.

The thinkers sit at these tables. That's what Baker calls her. The thinkers are specialists. They are constantly looking for a gap in the control system, for "this microscopic defect". Once you find one, develop a plan to take advantage of the bug in the system. "It can be a 15-page document that says: We do it at seven in the morning before the market opens. Then this. Then that. Then such." This document is like a cookbook and contains all the ingredients necessary for money to flow in the end.

Baker calls the people who use the cookbook Macher. Anyone who imagines the makers as investment bankers who are tapping their keyboards hectically and making constant calls are mistaken. "They spend a large part of their day chatting, playing, and drinking coffee," says Baker. Or they sell their old car and are looking for a new one. "They live the good life. Because they know that in order to bring in 14 million euros for the bank, they may only have to make one or two transactions a day."


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