Within minutes, it was already brought up in the second German election debate: last week’s raid on the Ministry of Finance in a money laundering investigation.
It is the department headed by Olaf Scholz, the SPD politician who, according to the latest polls, has the best chance of becoming the new chancellor.
The two main opponents of Scholz, Annalena Bearbock of the Greens and especially Armin Laschet of the CDU/CSU, have the chance to bite into their opponent’s Achilles heel. Namely: three fraud and money laundering cases with which they can connect Scholz. What are they about?
Suspicious money flows to Africa
The raid stems from an investigation into arms, drug trafficking, and terrorist financing in Africa. Initially, the ministry has nothing to do with this, but an organization that falls under the ministry does play a role.
In Germany, as in the Netherlands, financial institutions are obliged to report transactions with which something could be wrong to the so-called Financial Intelligence Unit (FIU). They must pass these reports on to the police and the judiciary, so that action can be taken. In this case, however, a report from a bank was not passed on, or was passed on late. That would have happened more often.
The question is why this happened and who is responsible for it. Is it only the officials of the FIU who have not passed on the reports, or are they also their supervisors? And if the latter is the case, can Scholz also be blamed? Because the FIU has been under the responsibility of the Ministry of Finance for several years, where Scholz, as minister, is ultimately responsible for legal matters.
The Wirecard Scandal
“If only this was the first case”, Laschet continued in the debate. He points to the scandal around Wirecard, the German payment tech company that has been a success story for many years.
But the reality turned out to be less attractive: the books contained 1.9 billion euros in made-up profit, the company went bankrupt and also hid the remaining money.
This all happened under the supervision of the BaFin, comparable to the AFM in the Netherlands. And that BaFin again falls under the Ministry of Finance, where Scholz has been in charge since 2018. Much of what went wrong at Wirecard may have happened before that, but the authorities only intervened last year, when Scholz was already a minister.
Cheating with dividend
And then there’s the dividend fraud in what has become known as the CumEx scandal. That meant that banks and large investors worked together in an ingenious way, so that they could claim large amounts of tax money back when they were not entitled to it.
One such bank was the Warburg Bank in Hamburg. When the fraud was discovered, the bank had to repay tens of millions of euros. Nevertheless, the Hamburg tax authorities were prepared to waive the amount. Mayor of Hamburg at that time: Olaf Scholz.
The question is whether he was involved in that remission at the time. In the end, the bank refunded the money and Scholz’s involvement has not been established so far.
Scholz most convincing
Scholz himself says that he was not responsible for any of these abuses. Both Baerbock and Laschet confirm that it is not certain whether and how he was involved in these cases. But they care about the broader picture.
“If only you would take responsibility on one point,” Laschet urged him. “I cannot judge what is going on,” said Baerbock, “We have the justice system for that. But I can say that we now need a lot of money because of corona. And because of money laundering and fraud, 50 billion euros slip through every year. the fingers of the state.”
Or do the voters also think that Scholz can be blamed? An initial survey after the debate does not yet indicate this. He came out as ‘most convincing’ in the eyes of the viewers.
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