ACCOUNTING-Tutorial (Not Assessed) Lecture: Ethics in the Workplace

Week 13 Tutorial (Not Assessed)
Lecture: Ethics in the Workplace
Read the following and be ready to participate in a class debate on the following.
1. Why are whistleblowers unpopular in society?
2. What wrong has Mr. Deltour committed to attract a jail sentence? Justify using
utilitarian theory.
3. “Many in the country’s finance industry want LuxLeaks resolved as quickly and as
quietly as possible — without making an example of him.” Do you agree? Why?

February 22, 2015 4:58 pm
‘I am not a martyr’, says LuxLeaks whistleblower facing jail
Duncan Robinson in Brussels
When Antoine Deltour decided to carry out one of the biggest financial leaks in history,
he did not know what he was getting into.
“I had no idea of the consequences,” admits Mr Deltour, the softly-spoken 28-year-old
French whistleblower behind LuxLeaks.
The documents — which came from auditor PwC and ran to 28,000 pages — revealed
how companies ranging from Ikea to Pepsi funnelled money through Luxembourg to
lower their tax bills to as little as 1 per cent.
Mr Deltour, then a junior accountant at PwC, came across the files in 2010 while
searching for training documents on a shared drive and decided to leak them to a French
journalist. His motivation? “I thought it was my duty to stimulate public debate.”
The leak triggered a global scandal, as newspapers from across the world gorged on tax
rulings that demonstrated how 340 of the world’s biggest companies avoided tax through
sweetheart deals with the authorities.
There was no suggestion the arrangements were illegal under Luxembourg law. But the
disclosure fed into a wider debate which was reignited this month by the revelations of
widespread tax avoidance in HSBC’s Swiss private banking arm.
It also prompted an unsuccessful vote of no-confidence in new European Commission
president Jean-Claude Juncker, who had been prime minister of Luxembourg while the
rulings were granted.
Now Mr Deltour has been charged with five offences, ranging from theft to breaking
Luxembourg’s professional secrecy laws, and potentially faces jail and a stiff fine.

But he says when he handed over the documents, he did so to reveal the methods used by
big businesses to lower their tax bills, rather than shame the companies themselves. “I
gave precise instructions not to disclose name of clients or the auditor,” says Mr Deltour.
“It was just to enlighten practices, but not to disclose everything.” The journalist in
question declined to comment on this claim.
Mr Deltour only learnt that the names had not been blanked out when he sat down to
watch the first airing of the leaked files on a French current affairs TV show in 2012 at a
friend’s house. How did he feel? “I was surprised,” said Mr Deltour. “I discovered that I
was potentially in trouble.”
Considering the size of the leak — and Luxembourg’s prized reputation for discretion on
financial matters — the Grand Duchy’s authorities were slow off the mark in tracking
down Mr Deltour. Four years passed between Mr Deltour taking the documents to his
being charged in December.
“The more I waited, the more I thought I would not have trouble,” said Mr Deltour.
Unlike the WikiLeaks founder Julian Assange, he was not hiding in a South American
embassy. Instead, he was working for the French civil service in the northeastern city of
Nancy — a two-hour drive from Luxembourg city.
Mr Deltour’s rather low-key situation differs from other whistleblowers, such as Hervé
Falciani, the computer engineer behind the HSBC leaks who claims to have received
death threats. By contrast, Mr Deltour still works for the French civil service but has
reduced his hours to focus on his upcoming case.
The debate on how to treat Mr Deltour has split Luxembourg. Many in the country’s
finance industry want LuxLeaks resolved as quickly and as quietly as possible — without
making an example of him. “I hope they have the intelligence not to make him a Julian
Assange,” said one senior Luxembourg financier.
Others, however, want a strict punishment as a warning to those tempted to follow suit.
PwC Luxembourg declined to comment, but in a previous statement in December said it
would not respond to remarks by a former employee “who has admitted the theft and has
been charged with five criminal offences.”
In any case, companies are still keen to run their tax affairs through the Grand Duchy.
After suspending tax rulings in November, Luxembourg’s tax authorities face a backlog
of hundreds of applications, according to one person familiar with the situation.
Most lawyers predict that Mr Deltour will be given a short sentence — probably of less
than two years, with much of it suspended — as well as a fine. But with no similar cases
in Luxembourg’s history, “this case is a precedent setter”, according to Professor Stefan
Braum, a criminal law professor at the University of Luxembourg.
While other whistleblowers, such as Edward Snowden, have expressed willingness to
serve a jail sentence, Mr Deltour is less keen on the idea, and is raising funds for his
defence on a website. “I fully take responsibility,” he says. “But I am not a martyr.”

Copyright The Financial Times Limited 2015.