BERLIN (Reuters) - A German state minister expressed alarm on Thursday at reports Switzerland had a spy in the regional finance ministry to find out how it obtained details of secret Swiss bank accounts, saying it threatened to compound a scandal that broke last week.
The Sueddeutsche Zeitung newspaper and broadcasters NDR and WDR reported that the Swiss Federal Intelligence Service (FSI) had planted a mole in the North Rhine-Westphalia (NRW) finance ministry to get details of German tax investigators.
Last Friday, German police arrested a 54-year old man suspected of trying to find out how German states had obtained CDs with details of secret Swiss bank accounts set up by Germans to evade tax.
"If the Swiss spy did not just collect data himself, but also placed informants in our financial administration, the scandal takes on a new dimension," said Norbert Walter-Borjans, NRW finance minister.
"You could hardly imagine a spy thriller like this taking place not on the big screen but on our doorstep," he said, adding the case showed how strongly protected is the Swiss system that allows tax evasion.
The case could be embarrassing for Switzerland which has increased transparency in its financial system in the last few years to stop international tax dodgers abusing its secrecy rules.
"We are giving all support to the investigating authorities to unmask the spies and we will not be intimidated in our efforts toward tax justice," said the minister.
NRW has for years irritated Switzerland by buying data as part of a crack down on tax evasion by Germans stashing away cash in secret accounts.
The state has bought 11 CDS of data since 2010 and paid 17.9 million euros ($19.59 million) to informants. It has recovered nearly 7 billion euros in tax revenue which would have been lost.
The FIS declined to comment on the case but earlier this week, its defense minister, who oversees the agency, said it must protect its methods and sources.
German Foreign Minister Sigmar Gabriel spoke to his Swiss counterpart on Wednesday about the case, the German foreign ministry said, declining to give further details.
(Reporting by Matthias Inverardi and Andrea Shalal and Oliver Hirt; Writing by Madeline Chambers; Editing by Catherine Evans)