Wirecard scandal: Bundestag inquiry committee increasingly likely

As the most likely SPD candidate for chancellor, Finance Minister Olaf Scholz probably has little interest in an inquiry committee. [EPA-EFE | Felipe Trueba]

A probe into the Wirecard affair is picking up speed. At a special session of the Bundestag Finance Committee, MPs have questioned top ministers and lobbyist influence over the government is becoming increasingly clear. Setting up a special inquiry committee is becoming more likely as a result. EURACTIV Germany reports.

Following the special session of the Bundestag committee on the Wirecard scandal, many questions remain unanswered. The Die Linke and far-right AfD parties called for a special panel even before the meeting started.

This will require the approval of a quarter of the Bundestag, some 178 members. Since it is unclear whether the parties want to cooperate with the AfD in this matter, a combination of Die Linke, FDP and the Greens would probably be needed.

The latter two have so far not been as committed as Die Linke, but their Finance Committee members Florian Toncar (FDP) and Danyal Bayaz (Greens) indicated that they would probably agree.

For Toncar, the many open points suggest “that we will also have to deal with a committee of inquiry in greater detail”.

Although the Greens are “so far satisfied” with the ministers’ information, according to their fiscal policy spokesperson Lisa Paus, Bayaz said “The probability that a committee of inquiry will come is probably higher than the probability that it won’t.”

Wirecard scandal: Why the German government should be nervous

Have leading politicians in the grand coalition up to the Chancellor been involved in a fraudulent scheme? The Bundestag’s finance committee is looking into it.

Who audits the auditors?

The entire Wirecard affair involves several countries and a number of authorities, including intelligence services, but the subject of this special financial committee and a possible committee of inquiry is a very specific: the role of the German government.

Three questions are at stake: how could such a balance sheet scandal take place under the noses of Finance Minister Olaf Scholz (SPD) and the financial supervisory authority (BaFin), which is under Scholz’s control?

The second question is similar: If the auditors of EY failed, where was the auditing firm APAS, which is located in Peter Altmaier’s (CDU) Economy Ministry?

And why did German Chancellor Angela Merkel (CDU) talk about Wirecard during her trip to China in September, shortly before their planned takeover of a Chinese company?

She was not the first to provide assistance with this takeover: Wolfgang Schmidt (SPD), State Secretary in the Ministry of Finance, sent an e-mail to his Chinese counterpart already on 17 July 2019, informing him about Wirecard’s plans.

German financial watchdog under fire following Wirecard scandal

The balance sheet scandal surrounding the payment company Wirecard raises many questions. Politicians are currently vigorously pursuing one of them: Where were the supervisory authorities? EURACTIV Germany reports.

Guttenberg opened the door

Timo Lange from the organisation LobbyControl is particularly concerned with officials at the highest political level promoting Wirecard.

A well-known lobbyist opened the door: Theodor Von Guttenberg, former Minister of Defence and rising star of the CSU, until his plagiarised doctoral thesis caught up with him.

Through his firm Spitzberg Partners, he is now hired by companies to make their voice heard by the government. He spoke to both the Ministry of Finance and the Chancellery about Wirecard before they approached the Chinese government.

This is not forbidden, Lange emphasised in an interview with EURACTIV Germany, but it shows “that we have a lack of rules and transparency here”.

Civil society and journalists should know what interests lie behind political processes, says Lange. For this reason, LobbyControl has been calling for years for a German lobby register, like the ones that already exist in France and at EU institutional level.

Wirecard Scandal: Former CEO Markus Braun let out on bail

Almost €2 billion are missing from the balance sheets of Wirecard, a German financial services provider. Markus Braun, CEO of the company until last week, was released on bail on Tuesday afternoon (23 June) after a night in custody. EURACTIV Germany reports.

“Tried and true practice”

“If Guttenberg had had to register as a lobbyist, there would have been critical questions of the government, and it would not have acted so recklessly” and stood up for a company when there were already indications of inconsistencies in its business practices.

As early as January 2019, the Financial Times wrote about possible balance sheet fraud at Wirecard, six months before the e-mail from the Ministry of Finance and eight months before Merkel’s trip to China.

The government is not aware of any misconduct in this matter. Its commitment to German companies abroad is “common and customary practice,” explain the Ministry of Finance and the Chancellor’s Office at the request of the outlet RND.

This is contradicted by Fabio De Masio, Vice-Chairman of Die Linke’s parliamentary group, when asked by EURACTIV: “I do not find it satisfactory that the Finance Ministry was still promoting Wirecard in China in mid-2019, after Mr. Scholz had already dealt with the vehement accusations against Wirecard in February 2019, allegedly because the extent of the fraud was not fully known until then.”

German EU Presidency: Influenced by lobbyists?

Large lobbying associations have a strong influence on the German government and there are concerns that this might impact its EU Council presidency, which starts on 1 July, warned a study conducted by NGOs LobbyControl and Corporate Europe Observatory. EURACTIV Germany reports.

Inquiry committee during the campaign?

However, questions about possible supervisory failures in the Finance and Economy Ministries remain unanswered. Scholz and Altmaier denied any wrongdoing, claiming the authorities have done everything correctly within the scope of their authority.

Scholz, however, wants to expand these competences and create an auditing structure “with a bite for the state,” he said on Wednesday (29 July). For example, it should also be possible to audit against the will of the companies.

This ostensible will to reform should also be viewed in the context of the 2021 federal elections, as Scholz is currently the SPD’s most likely candidate for chancellor, although an official announcement is still pending.

An investigative committee during the election campaign, which according to the current state of affairs would primarily deal with the BaFin and thus the Ministry of Finance, would be the last thing Scholz would need.

[Edited by Sam Morgan]

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