The end of Caritas in Luxembourg

61 million euros in damages. This is the result of a criminal case that is unique in the history of the Grand Duchy of Luxembourg and which brought the region Caritas a victim fell. The police investigation focuses on her former “Chief Financial Officer”. From February to July 2024, she is said to have transferred the sum in average installments of 500,000 euros to several accounts at a Spanish bank in Malaga.

When there was no more liquidity, she also applied for “bridging loans” from the main Caritas banks, the Luxembourg savings bank (“Banque et Caisse d’Epargne de l’Etat”, BCEE) and France’s BGL BNP- Luxembourg. Paribas. To justify the increase in financial requirements, he apparently said that the responsible state institutions were in arrears with their contributions and that salaries had to be paid at the end. As an alleged security, the two banks accepted the grant agreements that Caritas has with the state, from which the expected transfers came. According to inside circles, the banks did not need additional security measures, such as approval from the Caritas board of directors to issue these loans. According to information from the journalist Véronique Poujol from the research portal “Reporter”, a third Caritas bank, reportedly the “Banque Internationale à Luxembourg” (BIL), did not provide such a loan despite a request.

The poorest people in the world will suffer directly

The accused finance director, who lives in Belgium, denies all allegations and announced through a lawyer that she herself was a victim of “presidential fraud”. She believed she had been indirectly instructed by her boss, Caritas managing director Marc Crochet – but because she did not speak further about the matter. The investigating authorities are not responsible for engaging in this argument in the least and are working at full speed to investigate this fake hussar, who is influencing the society and politics in the Grand Duchy as well as the global Caritas organisation. The immediate victims are the 350 workers, but also the poorest people in the country and elsewhere in the world. There is currently a feverish search for solutions to save what is still possible. Just a few days before the first apostolic journey Pope After Luxembourg, the country’s Catholic Church is also left in shambles, but remains silent on the process. Journalist Bernhard Thomas claims in the weekly newspaper “d’Lëtzebuerger Land” that people there seem to be very happy to finally get rid of their hard social work it is labor that is associated with the phrase “Caritas”.

What is certain is that Caritas will no longer be in Luxembourg in the future. A subsequent group called “Hëllef um Terrain (HUT)” was quickly launched, organized as an association. “Hëllef um Terrain” means something like “help on the site” in the national language Moselle-Franconian, Luxembourg. The signal that this specification should send is clear: If we continue, we will do so locally and with what we can still see. Some Luxembourgers were surprised when they learned for the first time as a result of this scandal about the extent to which social work was done around the world from their small country. This is over for now. The management of Caritas only realized that this was a dangerous business after the accused got into the millions of the coffin and transferred the money of the poor to suspicious private accounts in Malaga.

Maximum damage limitation

The aim of the new institution is to try to completely regain the trust that was lost in the beginning from those who are responsible for financing both the damage and the planned restart. The grand ducal government quickly established an emergency committee. It is chaired by management consultant Christian Billon, and is supposed to limit the damage as much as possible with the help of management consultants from the “PWC” group. Although he hurried Christian democrat Prime Minister Luc Frieden confirmed that the 61 million euros that were stolen were not tax money and would not be used to repair the damage.

But they are the same people who are now hoping to finance the restart: the rich population of Luxembourg.
The significance of the events becomes clear again when you look at who was brought on board to ensure that the rescue operation was successful. Claudia Monti, who was the Grand Duchy’s ombudsman, will join the board of directors of the new association. For her, this is “a matter of the heart,” said the renowned lawyer in the daily newspaper “Luxemburger Wort”. After her eight-year mandate as ombudsman ends in April 2025, she will chair the new body. The founding members of the ongoing Caritas association are made up of a prestigious flower of well-known institutions and players, especially from the Luxembourg economy.

All international operations ceased

As one of the first measures to contain the financial consequences, Caritas Luxembourg’s foreign operations were immediately suspended. The Laos and South Sudan offices will close on 31 October 2024. A decision that will affect 30 Caritas staff in Luxembourg and another 70 local staff in South Sudan and Laos. “Approximately one hundred partners and advisors” are also affected, according to a press release. Although it has moved over the edge of the abyss, Caritas Luxembourg does not avoid social-political appeals in this situation either: “More than 60 projects are stopped, leaving thousands of people in precarious situations and thousands without hope, hope that they will go thanks to international cooperation activities.
The transfer of 61 million euros from Caritas found its way into the debates in the Luxembourg House of Representatives and became the subject of a special simultaneous meeting of six parliamentary committees in mid-September. The Prime Minister assured that an agreement would allow the new association to take over workers who had already been prepared in a previous agreement with Caritas.

But the jobs of people not involved in this agreement are unlikely to be kept. From October 1, employees who do not work in Caritas’ foreign business can join “HUT”, which is a new non-profit organization that aims to maintain support for around 20,000 welfare recipients social and save most of the 350 jobs. However, it is not expected that existing employment contracts will be transferred. Specific numbers were not discussed in the discussion.
What does not affect either party is the fact that the Archbishop of Luxembourg is not involved in the whole process. She should also have no seat or vote in the new association “Hëllef um Terrain”, whose founding group has no socio-political or even Christian claims. In addition to Prime Minister Frieden, there are representatives from the financial industry and the consulting company “PWC”. Not a word of regret anywhere that Luxembourg’s largest social welfare institution, which had long considered itself the “Christian conscience” of the country, was breaking up.

The government accuses Caritas of laziness in financial management

It almost seems that the government does not want to miss the opportunity to use the Caritas business for its own benefit. In the framework made from the seat of government, Caritas was not seen as a victim of criminal energy, but as a supporter due to sloppiness in financial administration. Prime Minister Frieden and the head of Caritas Crochet have long disagreed on all essential questions of social policy and their relationship is also characterized by mutual dislike.

Years ago, Frieden had to accept the accusation from the “Luxemburger Wort” that he had a “cold heart”. If this is true, this could now help prevent the Luxembourg financial center from suffering further damage. It is not an easy matter. The banking failure in this case seems to be significant and therefore would be even more impressive than the failure of Caritas management: While the requested loans were still being settled during the crime period, they were ‘ transfer already from Caritas accounts at a frequency of up to seven payments A sum of 500,000 euros in just one day. The two banks concerned did not commit any crime.

Spain was able to save some of the money

However, the alarm bells were ringing at the receiving bank in Spain, meaning that part of the money was likely to be blocked before it could be moved further. The church-affiliated Luxembourg magazine “forum” then summarizes: “The Luxembourg banking supervisory authority has to ask itself, the BCEE and the BGL BNP Paribas some very uncomfortable questions, and this at a time when Luxembourg is behind the wall against him. Centralization efforts of the European Bank are struggling. “