Former PwC Employee Wins Whistleblower Court Fight Over LuxLeaks Scandal

A former PricewaterhouseCoopers employee, convicted after revealing details of how some of the world’s biggest companies dodged taxes by setting up a base in Luxembourg, won his bid to be recognized as a whistleblower rather than a criminal who stole private data.

(Bloomberg) — A former PricewaterhouseCoopers employee, convicted after revealing details of how some of the world’s biggest companies dodged taxes by setting up a base in Luxembourg, won his bid to be recognized as a whistleblower rather than a criminal who stole private data.

The European Court of Human Rights ruled by a twelve to five majority on Tuesday that “the public interest in the disclosure of that information outweighed all of the detrimental effects arising from it.” Raphael Halet’s right to freedom of expression had been violated and his original criminal conviction had a “chilling effect” on others who might speak out, the court said.

The Strasbourg, France-based court in a 2021 preliminary ruling rejected Halet’s claim that his right to free expression had been violated as the Frenchman sought to overturn a Luxembourg tribunal that judged him to be a criminal not a whistleblower. Halet, 46, had first been hit with charges in 2015 including domestic theft, violation of professional secrecy and business secrets, after sharing 16 corporate tax returns PwC was handling with a journalist.

The decision is “very satisfying” and is “a reminder of the principles that the appeals court should have applied,” Christophe Meyer, Halet’s lawyer, said in a statement. 

The impact of the revelations, dubbed LuxLeaks, spread well beyond the tiny duchy, prompting European Union regulators to expand a tax-subsidy probe and propose new laws to fight corporate tax dodging. EU lawmakers also created a special committee to probe fiscal deals across bloc. 

Read more: Whistleblower Needed a Smoke Before Giving Up LuxLeaks Data 

Former PwC auditor Antoine Deltour had copied a folder of about 45,000 pages detailing confidential tax agreements on the eve of his departure from PwC in Luxembourg in 2010. He handed over the files to French investigative journalist Edouard Perrin, who was working on a documentary about tax practices and had contacted him. 

Halet later handed the additional documents to Perrin. The three men were charged, but a court in 2016 cleared the journalist of accusations he had encouraged Halet in his search for secret files at PwC. The same court ordered suspended jail sentences and fines of €1,500 ($1,614) and €1,000 respectively for Deltour and Halet, plus a symbolic €1 in compensation for PwC. 

Luxembourg’s highest court in 2018 recognized Deltour as a whistleblower for all of his acts, but rejected the appeal by Halet, who then took his case to the human rights court.

The ECHR on Tuesday ordered Luxembourg to pay Halet €15,000 in damages and  €40,000 in expenses.

 

 

 

 

 

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.