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Tax Deductible WikiLeaks

6:30 AM, Dec 10, 2010 • By JOHN ROSENTHAL
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Last weekend, PayPal announced that it was freezing the PayPal account used by WikiLeaks. In a statement, PayPal explained that WikiLeaks was in violation of the company’s acceptable use policy, which “states that our payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity.” But any violations of the law that WikiLeaks either encourages, promotes, facilitates, etc. are apparently not of interest to Germany’s Wau Holland Foundation, the principal collector of funds and de facto financial manager of WikiLeaks. At any rate, this appears to be the case for any violations of American law. German law, as will be seen below, is another matter.

Tax Deductible WikiLeaks

According to Winfried Motzkus, the chair of the Wau Holland Foundation’s board of directors, the foundation has thus far collected some €750,000 for WikiLeaks or nearly a million dollars at current exchange rates. The foundation allegedly disburses funds to WikiLeaks upon the submission of receipts for specific costs. The PayPal account used by WikiLeaks was in fact the account of the Wau Holland Foundation. Clicking the PayPal link on this WikiLeaks donations page still takes one to the now blocked foundation account of the Wau Holland Foundation. In a press release, the foundation has acknowledged the freezing of its account and threatened legal action against PayPal.

But the foundation continues to collect funds for WikiLeaks by bank transfer to its bank account in Kassel. Astonishingly, as WikiLeaks itself emphasizes, such donations are tax deductible for German contributors. This is to say that German taxpayers may deduct contributions to an entity whose only apparent objective in its current incarnation is to leak classified documents of an allied country, namely the United States.

The fact that Germany would thus be supporting WikiLeaks is particularly ironic given that the application of anti-leak laws in Germany itself is unusually draconian. Thus, under the heading, “Aiding and Abetting in the Betrayal of [State] Secrets” [Beihilfe zum Geheimnisverrat], prosecutors may bring criminal charges against not only German officials who leak sensitive information, but also journalists who publish such information. Several journalists and press organs have been the targets of police raids in recent years in connection with suspected “aiding and abetting” of leaks. It remains to be seen whether a legislative reform currently under consideration by the German government will significantly alter this situation.

As discussed in my article in THE WEEKLY STANDARD, “The Strange Career of WikiLeaks,” the threat of an “aiding and abetting” leak prosecution may well have had something to do with the disappearance of classified German documents from the original WikiLeaks website. The entire original site went offline in early January 2010, shortly after WikiLeaks published one last Germany-related leak: a classified report on a German-ordered aerial attack near Kunduz, Afghanistan. Numerous civilians died in the attack. The new site, which premiered in April of this year, has been devoted virtually exclusively to the leaking of American material.

According to a recent report in the German daily Die Welt, local authorities in Kassel are examining whether the Wau Holland Foundation’s fundraising on behalf of WikiLeaks is compatible with its designation as a “charitable” [gemeinnützige] organization. The foundation is named for the late Wau Holland, one of the founders of the Chaos Computer Club, a Hamburg-based association of computer hackers with branches throughout Germany.

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