Wenzenbach Municipality Seeks Damages from Widow of Former Mayor in Financial Scandal: Settlement Reached After Lengthy Court Hearing

There is a comparison in the action for damages brought by the municipality of Wenzenbach against the widow of former mayor Josef Schmid. The first chamber at the administrative court sometimes finds clear words.

It takes a full seven hours before the parties in the hearing before the administrative court in Regensburg come to an agreement and draw a line under what made the headlines nine years ago as the Wenzenbach financial scandal. A final stroke with reservations, however, because the parties involved have until the beginning of October to revoke the laboriously put together settlement.

Unlawful performance bonuses and vacation pay for civil servants, a lavish lump sum for travel expenses for the mayor Josef Schmid, who has since passed away, and private tax debts that were paid from the municipal treasury were what the Bavarian Municipal Audit Association noticed during a visit to Wenzenbach. The damage to the municipality was estimated at up to 170,000 euros at the time.

Compensation from the mayor’s widow: the process was suspended for many years

In 2014, the municipality filed a claim for damages with the administrative court. But because the issue first had to be dealt with under criminal and then disciplinary law, this procedure was suspended for several years.

The longstanding community manager Hans E. was subsequently given a suspended sentence and lost his pension entitlements. Mayor Schmid was acquitted in 2017 in the second instance by the Regional Court of Regensburg. Although the facts of infidelity are objectively fulfilled, Schmid violated his duty of care and at least acted negligently, but this was not punishable, according to the judgment at the time.

The mayor cannot be accused of intent. He simply blindly trusted the community manager, who is considered the driving force behind everything. Therefore: acquittal.

Different standards apply before the administrative court than in criminal law

However, other standards apply to claims for damages before the administrative court. “It’s no longer about criminal liability, but about culpable breaches of duty,” said judge Georg Geißelbrecht, chairman of the first chamber.

The court sees such breaches of duty not only by the municipal manager, but also by the former mayor Schmid, who died in 2021 – combined with claims for damages that hit his widow. As the sole heiress, she is not only entitled to a widow’s pension, but is also the legal successor to her husband in these damages proceedings.

Of the originally claimed 170,000 euros, just over 100,000 euros remained on the day of the hearing. Two civil servants have already paid back the bonuses they received unlawfully in advance, from Hans E. around 54,000 euros have so far flowed back into the municipal coffers.

The Schmid family sees no fault in the deceased mayor

Schmid and his widow have not paid back anything in all these years. The family of the deceased sees this as a belated admission of guilt, as the trial progresses. And in the Schmid household, such a thing is seen as unjustified, let alone fair. Accordingly, the first settlement talks that the court had suggested in May 2022 failed.

The reading of the family and the lawyers commissioned: Schmid bears no responsibility. He had blindly trusted the managing director and he had also deliberately deceived him. An allegation that Hans Es Attorney Thomas Troidl repeatedly rejected in this form during the course of the proceedings.

Excessive travel costs – but the responsibility lies with the municipal council

The largest sued chunk that is left over at the administrative court is the flat-rate travel allowance that the mayor received in addition to his A16 salary. 480 euros per month, paid over twelve years – a total of almost 70,000 euros.

Schmid would have had to drive about 1,300 kilometers per month to justify such a height, calculate Wenzenbach’s mayors Sebastian Koch and Klaus-R. Luckow, attorney for the community. And a rudimentary logbook, which Schmid kept briefly after a reminder from the tax office, shows that such routes were not even attempted – although even church visits there were booked as business trips.

But here the chamber of the lawsuit has little chance of success. Not because the court considers the amount of the lump sum to be justified, but because this lump sum was approved by resolutions of the municipal council.

The reporting judge Ulrike Dettenhofer makes it clear that each individual municipal council is responsible if the decision was taken in an illegal manner. “The municipal councils should have checked that.” Damage compensation is, if at all, only a very small possibility.

Court confirms that Schmid acted with gross negligence

The situation is different with the subsequent taxation of this initially tax-free flat-rate travel allowance by the Regensburg tax office. Schmid paid around 11,000 euros in income tax, which was paid by the municipality – approved with his signature.

The argument of Schmid’s lawyers, Andreas Brey and Reinhard Mühlbauer, according to which managing director Hans E. had fraudulently planted the document on him, that it was also about subsequent taxation of Es’ vacation pay, is not followed by the chamber. A mayor must be expected to at least read through such a document – one page and “understandable even for the layman”. Not doing so is grossly negligent.

Even the (unspecified) objection of the lawyer Mühlbauer, according to which Schmid taxed the flat-rate travel allowance himself anyway, i.e. the tax office made a mistake with the subsequent taxation, does not convince the court either. According to Judge Geißelbrecht, it cannot be justified for a mayor to let the municipality give him his taxes as a gift.

Court: Those who are paid A16 must not blindly rely on everything

The Chamber at the Administrative Court also assigns clear joint responsibility to the deceased mayor with regard to the holiday pay and performance bonuses, which have already been largely refunded. “I can’t be elected to such an office, paid A16, and then blindly rely on everything – with all due respect,” says Geißelbrecht. That too is grossly negligent.

In hindsight, that’s easy to say, replies Mühlbauer. “But at the time, everyone here would have signed it.”

City council must approve the settlement

You then spend several hours tinkering with a comparison. Two phone calls have to be made to Schmid’s widow, who is not present. Finally, it is agreed that she has to pay 14,000 euros and ex-managing director E. another 10,000 euros. 56 percent of the process costs are borne by the municipality.

All those involved now have until October 6th to think about this laboriously achieved agreement. Wenzenbach’s mayor Koch needs the approval of the municipal council for this. Schmid’s family only wants the payment to be understood as a concession to end the case. A corresponding passage is specifically dictated in the comparison. The next few months will show whether it will hold up in the end.