French justice is taking an interest in Dominique Strauss-Kahn, the former Managing Director of the International Monetary Fund (IMF). Le Monde has learned the French National Financial Prosecutor's Office (PNF) opened a preliminary investigation in March into Mr. Strauss-Kahn's consulting activities based in Morocco.
The proceedings, which have been entrusted to the Service d'Enquêtes Judiciaires des Finances (SEJF), the tax police of the Ministry of the Economy, Finance and the Recovery, involve suspicions of "aggravated tax fraud laundering." The former Minister of the Economy was held for questioning in spring to explain his status as a Moroccan tax resident. The investigation was confirmed to Le Monde by the National Financial Prosecutor's Office (PNF), which declined to comment further.
The case began in 2021 with the Pandora Papers, a collaborative investigation into tax havens published by the International Consortium of Investigative Journalists (ICIJ). Drawing on confidential financial documents, Le Monde and its partners revealed the details of an offshore facility set up by Mr. Strauss-Kahn to take advantage of various tax benefits – after his company's registration in Marrakech in 2013 and his career pivot to consulting for governments and large private sector companies.
From Morocco to the Emirates
The socialist and former IMF managing director first set up a Moroccan company, Parnasse International, in the financial free zone of Casablanca, which allowed him to benefit from a five-year tax exemption. He did not pay any taxes on the €21 million in profits earned during this period.
In 2018, when this tax exemption ended, the former IMF head created a new offshore company in the United Arab Emirates, Parnasse Global Limited, which is totally tax-exempt and specializes in "consulting services in the Gulf region." He registered it in the smallest of the seven emirates, Ras Al-Khaimah, known for its particularly tight tax secrecy and non-existent taxation, before closing it three years later, in April 2021.
Contacted by Le Monde, Mr. Strauss-Kahn's lawyer, Jean Veil, stated that his client's tax situation is clear. "Documentation has been forwarded to the tax authorities, I am convinced that they were satisfied since nothing has happened since [Dominique Strauss-Kahn's hearing] at the judicial level." During the investigation into the Pandora Papers, Mr. Strauss-Kahn's team had also claimed that the choice of Ras Al-Khaimah was not for "tax reasons," but because an important client in the region wanted to domicile his contracts there.
However, French investigators are wondering whether the former IMF head should not have established his consulting services in France. They are questioning the validity of his Moroccan tax residence, and specifically the location in the kingdom of the head office of his professional activities.
Income declared in Morocco
The data leak exploited by the ICIJ and Le Monde had lifted part of the veil on the discreet and lucrative relocation of Mr. Strauss-Kahn's activities. In recent years, the former IMF head has provided consulting services to many African countries, including Togo under Faure Gnassingbé (president since 2005) and Congo-Brazzaville under Denis Sassou-Nguesso (president of the Republic of Congo since 1997) – two authoritarian regimes that have called on the expertise of Mr. Strauss-Kahn ("DSK") to resolve their financial difficulties and finance their development.
He also worked for the Russian oil giant Rosneft, headed by Igor Setchine, a former vice president of the Russian Federation and close associate of President Putin, on a 1.75 million euro contract in 2016-2017. The oil company Orion Oil, run by businessman Lucien Ebata, an intermediary close to the Sassou-Nguesso clan, also commissioned Mr. Strauss-Kahn with consulting services to the tune of 1.4 million euros, as did the Chinese conglomerate HNA (400,000 euros).
The Pandora Papers have not finished making news. Apart from Mr. Strauss-Kahn, the tax situation of about 200 French people is currently being reviewed by the authorities. Their names are in the public database posted online by the ICIJ, which is regularly updated as the consortium and its partners reveal new information. Earlier this year, the PNF opened a preliminary investigation into former Czech Prime Minister Andrej Babis for suspicions of tax fraud laundering, after the Pandora Papers revelations about his acquisition of villas on the French Riviera.