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December 7th, 2011

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Just a week ago ‘Taxgate’ was a half-obscure story – a game of speculation for political wonks – about whether or not a top aide at the Tax Ministry, Peter Loft, had inappropriately fiddled in the personal tax audit of a top politician.

But each day last week brought different information to light – and what a difference a day makes.

Loft’s written explanation of his actions in the summer of 2010 in connection with the tax audit of then-opposition leader Helle Thorning-Schmidt (Socialdemokraterne) and her husband Stephen Kinnock, pointed suspicion further up the chain of command to then then-tax minister Troels Lund Poulsen (Venstre) and his special counsel and spin doctor, Peter Arnfeldt.

Within a few short days, the intrigue was played out in the press. A tabloid snitched that its highly-placed source was Arnfeldt, who was reported to police. Poulsen, an MP, asked for a leave of absence from parliament. The top aide to Venstre leader, the former PM Lars Løkke Rasmussen, admitted that he had also been involved in meetings about the audit.

The new tax minister, Thor Möger Pedersen (Socialistisk Folkeparti), and the centre-left government are now in the process of establishing a formal, independent enquiry into the case that increasingly appears to be one of the most blatant abuses of power by former cabinet members and powerful employees of the country’s largest political party.

Many political commentators are saying that ‘Taxgate’ is one of the biggest scandals to hit Danish politics in recent times, with Politiken newspaper’s editor-in-chief Bo Lidegaard saying the case reeked of “political corruption” and “abuse of power”.

The full details of the case may not be known for years, as the enquiry is only just beginning.

Taxgate timeline

2010
Early June: The Copenhagen office of tax authority Skat audits opposition leader Helle Thorning-Schmidt (Socialdemokraterne) (left) and her husband Stephen Kinnock, who works and lives in Switzerland during the week and has not been paying income taxes in Denmark.

August-September: The Tax Ministry’s permanent secretary, Peter Loft (right), meets five times with Skat Copenhagen’s director, Erling Andersen. At one of these meetings, Loft gives Andersen an anonymous memo, requesting Skat take it into consideration in Thorning-Schmidt and Kinnock’s audit. Andersen asks Loft who wrote the text, but Loft replies that he does not know and that “it had just turned up”. The memo concludes that Kinnock owes taxes in Denmark. By law, the Tax Ministry is not allowed to interfere in specific tax cases.

September 15: Skat finishes its investigation, concluding that Kinnock (left) does not owe taxes in Denmark, freeing him from tax liability. Afterwards, Andersen hears that then-tax minister Troels Lund Poulsen (Venstre) attempted to convince Skat Copenhagen to overturn its decision.
 

2011
September 8: One week before the general election, the tabloid BT publishes a story with citations from the confidential nine-page tax audit of Thorning-Schmidt and Kinnock. Loft reports the illegal leak to police.

September 15: Centre-left parties narrowly win the election, ousting the centre-right, Venstre-led government. Thorning-Schmidt becomes prime minister.

November 10: Politiken reports that Loft took part in the five meetings at Skat Copenhagen about the ongoing audit, and that he also gave Andersen (right) a memo with recommended text to include in the audit.

November 14: The new tax minister, Thor Möger Pedersen (Socialistisk Folkeparti) (left), asks Loft and Andersen to give him their written explanations of why and to what extent the Tax Ministry interfered in Thorning-Schmidt and Kinnock’s audit.

December 2: Pedersen announces in a press conference that Loft's and Andersen's explanations contradict one another. Pedersen underscores that he has full confidence in both Loft and Andersen, but that he is calling for a formal enquiry to investigate serious allegations made by Loft that either Poulsen or his special counsel and spin doctor, Peter Arnfeldt, wrote the memo that Loft gave Andersen. Poulsen, an MP, holds his own press conference, announcing that he has nothing to hide and welcomes the enquiry.

December 4: The tabloid Ekstra Bladet reveals it too was offered the report, and named Arnfeldt (right) as the source. It reported that in October and November 2010 he offered to read paragraphs from Thorning-Schmidt and Kinnock’s audit to a reporter. Shortly afterwards, Poulsen announces that he will be taking an unpaid leave of absence from parliament. Poulsen claims he has done nothing wrong, but needs time to clear his name; Venstre’s leader, the former PM Lars Løkke Rasmussen, says he has full confidence in Poulsen.

December 5: Rasmussen (left) says in a press conference that anyone who broke the law or tried to influence the outcome of Thorning-Schmidt and Kinnock’s audit has no future in Venstre. Rasmussen also claims that he has “completely clean hands”. However, he repeatedly refuses to answer reporters’ questions on whether he took part in any Venstre strategy meetings where Thorning-Schmidt’s tax audit was “on the agenda”. Commentators note that Rasmussen seemed uncharacteristically nervous and flustered, with Poliken’s politics editor Mette Østergaard calling the press briefing “a catastrophe” for the former PM. The Tax Ministry reports Arnfeldt to police for leaking Thorning-Schmidt and Kinnock’s tax audit.

December 6: Berlingske newspaper reports that Rasmussen’s political adviser Mikael Børsting – who was Venstre’s press chief at the time – met with Arnfeldt in the summer of 2010 to discuss the ongoing audit. Børsting emphasises that he “never talked with Peter Arnfeldt about personal information in [Thorning-Schmidt’s] tax audit”.