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UPDATE 2-Germany says paid for data leading to tax swoop

(Adds opposition politicians, paragraphs 4-5)

BERLIN, Feb 17 (Reuters) - The German government paid for information that led to a sweeping probe into tax evasion and expects to reap several hundred million euros (dollars) from the investigation, a Finance Ministry spokesman said on Sunday.

German media had reported that the BND intelligence service paid an informant around 4.2 million euros ($6.17 million) for a compact disk containing Liechtenstein bank data on over 1,000 tax evasion suspects.

The Finance Ministry spokesman did not deny the reports and added: “It’s money well invested.”

Opposition politicians called for a swift clarification of the role played by the BND. “It must be clarified whether the (intelligence) service operated within the framework of the permitted exchange of information between government officials,” Max Stadler, a member of the opposition Free Democrats, told Tagesspiegel newspaper.

The tax investigation has already led to a raid on the home of Deutsche Post DPWGn.DE Chief Executive Klaus Zumwinkel and threatens to ensnare hundreds more rich Germans. Zumwinkel will quit as Deutsche Post CEO on Monday, the company said on Friday.

Zumwinkel, a pillar of Germany’s corporate establishment, came under pressure to go after prosecutors said they suspected him of dodging about 1 million euros ($1.5 million) in taxes by transferring money to tax haven Liechtenstein.

Police are likely to visit to hundreds more rich and prominent Germans as part of the probe into offshore accounts, sources close to the investigation have told Reuters.

Liechtenstein Prime Minister Otmar Hasler is due to meet German Chancellor Angela Merkel and her finance minister, Peer Steinbrueck, on Wednesday in Berlin for talks on the missing millions.

The tax scandal has undermined trust in company executives, who many Germans already held in low regard after a series of recent corporate scandals, and because bosses have held down workers’ wages at a time when the economy has grown strongly.

INFORMANT

Der Spiegel magazine reported that the informant contacted the BND early in 2006. Several meetings with tax investigators followed that year during which the whistle-blower provided sample data to demonstrate the quality of the information.

Investigators subsequently paid for the information in full.

German leaders expressed concern over the weekend that the tax scandal risked discrediting the economic model on which the country’s post-war identity is founded, and industry chiefs sought to shore up its reputation.

Germany has prided itself on economic and corporate prowess, epitomised by the country’s status as the world’s biggest exporter of goods and by the number of companies which are world leaders in their sectors.

Industry leaders distanced themselves from tax dodgers.

“Managers and companies carry particular responsibilities. Anyone who contravenes the rules turns against the economy,” Juergen Thumann, president of the BDI industry group, told the Bild am Sonntag newspaper.

“We will only stand up for those who work according to justice and the law, honesty and conscience,” he added.

Ludwig Georg Braun, head of the DIHK chambers of industry and commerce, urged executives to speak to their workers.

“Make clear that tax evasion and enrichment at the cost of the community, the taxpayer or at the cost of a business has no place with you,” Braun wrote in a letter to company managers.

Finance Minister Steinbrueck told reporters on Friday Zumwinkel had admitted evading taxes. Zumwinkel himself has not been available for comment. ($1=.6809 Euro) (Reporting by Paul Carrel and Matthias Sobolewski; Editing by Paul Bolding/Jeffrey Benkoe)

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