In the department of Tax Law at the University of Amsterdam, journalistic articles about the financial dependency and culture within the department led to the resignation of a professor and the department chair. The Amsterdam university magazine Folia reported on a culture where it is practically impossible to build a career if you do not also work for a large tax consultancy firm and on the influence of those firms. In the department of Tax Law at the EUR, there are also plenty of professors who have this kind of background. To what extent does that culture exist here as well?
“We have a lot of part-timers who also have ancillary jobs. In the department, we have a broad representation of people: those at the Dutch Tax and Customs Administration, in business, in the consultancy sector, law firms, the judiciary, the Ministry… At the same time, our professor of Local Taxes, for example, (Arjen Schep, whose chair is financed by a number of municipalities, ed.) is employed full-time by us. I think these connections with civil society are a good thing. The field of practice is about the functioning and application of the law, while we in science are looking for entirely different answers, specifically: ‘How should the legal system work?’”
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What is the importance exactly of these connections with civil society?
“Science should be part of society. Without a scientific approach, for example, we would never have gone to the moon and we would not be living as healthily as we do now. When it comes to research on taxation, we are talking about financing society. If we want to be effective in science, it helps if we can experiment in actual practice, so to speak. If you know how tax rules are established or administered, then you can be more effective in finding solutions. Since I can see how things work in the office at PwC, I can write with more self-confidence about finding fiscal answers to social issues.
“At the same time, of course, there is also a certain tension. Where taxes are being paid and money is circulating, is also where vested interests are formed. But for a legal scholar, those interests are actually a matter of fact. If your starting point is that tax law must function in a neutral way, then, as a scientist, you measure it against that yardstick. And if it does not, then that’s the conclusion that you draw. With this methodical approach you can maintain your objectivity. This is something that is sometimes overlooked, in my opinion. “
In the wake of the Nieuwsuur publications, the Dutch House of Representatives outed criticism of the financing of chairs by the Dutch tax authorities and EY, among others. Some employees of the department in Amsterdam said that articles were sometimes submitted to the financier for approval. Can you look me straight in the eye and say that this has never happened here in Rotterdam?
“Yes, I can. I am independent. I have never submitted a publication to anyone yet for approval. And I have never coordinated in advance any media appearance with my other employer. And I have no intention of ever doing so either.”
Would you also dare stick your neck out for all your colleagues?
“I haven’t examined any of that. But I can say that I have never come across it within my remit. I am chair of a research group, and several professors, science lecturers and PhD students fall under that. Also, I don’t know of any example where I had reason to doubt the academic wording. The idea that you could spin a standpoint of a firm or a government in an article is something I don’t subscribe to either. As if that would not be immediately obvious. If you do that, you will lose your respect and integrity straight away. After all, there is not much else that is as transparent as a publication.”
Nieuwsuur also found out that in 2008, the Ministry of Finance sponsored a chair, which was later filled by Arnaud de Graaf, and set requirements for it in the sponsor agreement. “The study assignment needs the approval of the (deputy) Director of General Tax Administration and the professor had to assure ‘exposure’ among the students in order to get them enthused about a job at the Ministry of Finance. How do you reconcile this?
“I can tell you in all honesty that we were also extremely surprised about that. We also cannot find those agreements in our own archives. What I can say is that, as far as we can tell, they have not been implemented; De Graaf has not acted accordingly. It would not have been appropriate for the EUR to do that either.”
Have you looked into whether similar conditions have been imposed at other chairs?
“Yes, we have and it’s not the case. We have been completely transparent with Nieuwsuur and as such, they have also had access to the same documents as we have. This sponsorship agreement was not amongst them, it surfaced from the Ministry of Finance. We tried very hard to find the document in our own archives, but we haven’t been able to.”
Member of Parliament Pieter Omtzigt raised questions in Parliament about the findings of Nieuwsuur. It struck him that the benefits affair had been subject to very little research by tax law researchers. Do you see this as a risk, that researchers will avoid certain subjects due to conflicts of interest, for example, if the Dutch Tax and Customs Administration is the financier?
“I find this a tricky one. In 2006, a lot was written by academics about the introduction of the benefits system and the potential implications thereof. But as to why less was written about it later, I don’t know. More generally, I think that something that doesn’t exist is difficult to prove. But if I relate it to myself: I write about the taxation of multinationals and don’t concern myself with whether a colleague at PwC might have a particular opinion on an article of mine, nor do I intend to be amenable to that kind of thing.”
Did the incident in Amsterdam lead to a discussion in the department?
“Yes, we do talk to each other about that, of course. We account for our research in our annual report. But we are not in a position to judge ourselves, that is up to those who absorb the research. They can decide whether we have conducted ‘biased‘ research or not. I think our way of doing science is about systematically and methodically thinking through tax regulations, and that is an important counterbalance to other considerations, such as political or geopolitical ones. Science is not merely an opinion. You can check the facts and the annotations, you can go over the analysis and assess it for its analytical accuracy. I don’t think we can do a whole lot more than simply be transparent. And naturally, if we enter into a partnership, we have to be transparent about that too.”
In hindsight, do you think that the department should have been more transparent about the how the chairs are funded?
“The Nieuwsuur reportages deal with procedures stemming from a decade ago and which ended around 2020. But that doesn’t mean the discussion is over and done with. If I were to start a special chair today, I would ask myself: ‘What do I need to do, are we transparent enough?’ And if that means more transparency, then I would weigh that up and act in line with what society is calling for. But I also know that ideas about this change over time. You can see that in the discussion surrounding text messages from ministers, for one thing. Ten years ago, I think that would have been a completely different discussion.”
On the other hand, we had a discussion around six years ago about the financing of research on the Dutch business climate conducted by the Rotterdam School of Management. It only transpired afterwards that a number of large companies had paid for that study. The lack of transparency in this matter was already strongly condemned at the time.
“One thing is clear: if there is bias in the output of research, we have a problem. However, not right away whenever we enter into a partnership. Academic independence needs to be guaranteed. Three of the externally funded chairs in Tax Law are financed through a foundation of which I am the chair. That foundation is just plain independent. As soon as sponsor X transfers the money, it’s no longer involved. If X calls me and asks if a PhD student can write this or that down in an article, then I say that is not going to happen. I don’t see myself as a puppet of such a sponsor. Of course, transparency is good, but if you keep stating that there is actually a company behind the financing of a chair, then you are also to some extent denying the autonomy of the board of the foundation, my autonomy as an executive board member and how I give shape to my executive responsibilities. At the same time, I do understand the desire to be as transparent as possible. So, I think we need to have a conversation with each other about what is most appropriate.”
What matters to a lot of people is that they might trust that you at the Tax Law department are all very honourable academics, but at the same time, a company is not a philanthropic institution. Surely such a company wants to see something in return for sponsoring a chair?
“Again, it is very difficult to prove that something – unwelcome interference – is not happening. And I also understand that it is a matter of trust. You can be cynical about the involvement of companies, that they only do it out of self-interest. You can also see it as a form of civic engagement.”
Why does an institution like the Dutch Tax and Customs Administration want to sponsor a chair in the first place?
“It could be the case that you want to mine a particular field of research, in order to advance your own discerning skills. You can then voice this aspiration together. It can also lead to an outcome that the financier is not happy with and they should realise that. Wherever we meet up, there is always a certain tension. Whether it concerns law, pharmacy, food technology or medicine. After all, all kinds of interests are at play.”
Has the news coverage had any consequences for employees on a personal level?
“I’m not going to be sour about it, but your name ends up in the news linked to a question mark about integrity. Consequently, that also affects you as a human being. If I look at my own publications – then just tell me where I might have had such a terrible bias. My colleagues in the department work very hard at both teaching and research. They never stop at five p.m., as it were. They all have such a tremendous drive to have a meaningful impact. They also work in the field and that is all properly reported in their publications. I would love to champion that. If something is going on, something is going on. But if it isn’t, then it isn’t. Therefore, be careful, because if you do give that impression, you end up damaging someone just like that.”
Let’s suppose that a new opportunity for an externally funded chair were to arise, would you then disclose very clearly who exactly has funded it?
“Of course. At the moment, this is not an issue; one of our foundations does not currently host a chair. If an opportunity should present itself to do so, I would go ahead and do it. You also want to do something for the talent in your area. Suppose we could do something with green taxes, or taxes for the lowest income groups, then that would be really wonderful. And how these things should be given shape at some point, that’s something for executive managers to discuss with each other.”
I suspect Pieter Omtzigt would be happy with that last area of research.
“Let’s imagine that you are seeking external funding for this, then it could come from a non-governmental organisation, for instance. Although the media might not find this kind of NGO as a sponsor quite as exciting. But they will also have to be transparent, obviously, and you might think differently about that in ten years’ time. We try to do our executive work conscientiously and to take into account what is required of us in an ever-changing society. When my successors judge me in ten years’ time, I hope that they will be lenient and put things into the context of the times.