FRANKFURT (Reuters) - The German state of North-Rhine Westphalia may buy more secret Swiss bank data to clamp down on tax evaders even as politicians seek diplomatic ways to end bank secrecy, its finance minister said on Monday.
"So long as there is data containing valuable tips to be bought, then yes," Norbert Walter-Borjans said in response to a question about whether he would continue to use taxpayer money to buy client information.
The pledge comes amid a growing debate in Europe about tax evasion after the leaking of thousands of holders of secret bank accounts.
Borjans confirmed that North Rhine-Westphalia has bought client data from the Switzerland-based operations of Credit Suisse (NYSE: CS - news) , Julius Baer (Other OTC: JBARF - news) , as well as Merrill Lynch and Coutts, a wealth manager owned by Royal Bank of Scotland (LSE: RBS.L - news) . The banks declined to comment.
Switzerland's banking secrecy has helped the country build up a $2 trillion offshore wealth management industry, but pressure from U.S. and German tax investigations, among others, has forced the Alpine country to take steps to make sure clients pay their home country taxes.
At a European Union summit set for May 22, leaders will discuss ways to curb tax dodging, allowing the bloc to begin talks over bank secrecy with non-EU states such as Switzerland.
The 27 European Union finance ministers want to start formal negotiations with Switzerland and the tax-haven microstates of Liechtenstein, San Marino, Andorra and Monaco about surrendering bank data on an automatic basis, exposing savers to tax claims.
EU members Luxembourg and Austria signalled in recent weeks they would lift their own bank secrecy rules.
Borjans has helped block previous efforts to strike a deal with Switzerland. He mobilised opposition against a potential tax deal between Germany and Switzerland which would have allowed Swiss banks to maintain client confidentiality in exchange for a withholding tax on an estimated 150 billion Swiss francs in undeclared funds.
Chancellor Angela Merkel's coalition had approved the measure in the lower house, or Bundestag, to tax assets stashed by German citizens in Swiss bank accounts, but opposition-led states in the upper house, or Bundesrat, blocked the deal.
Buying up illegal client data has helped pressure tax dodgers to declare their holdings to the authorities, a move that has spurred hopes of revival for Germany's domestic wealth management industry.
Last month, one of Germany's most admired sports managers, Bayern Munich president Uli Hoeness, said he had voluntarily reported himself to authorities in a tax evasion investigation that exposed Merkel's government to criticism it is lenient on tax cheats.
Florian Rentsch, finance minister in Germany's Federal State of Hesse said he would seek to bulk up Frankfurt as a financial centre by chasing untaxed money once hidden in Swiss accounts.
"Frankfurt will become the new Switzerland," Rentsch told Reuters, adding that he wants to attract money which has been already declared to the authorities.
(Reporting by Edward Taylor, Matthias Inverardi and Andreas Kroener; Editing by Louise Heavens)