BERLIN – Wirecard scandal could turn out to be much bigger than expected

Following reporting from Der Spiegel that the German chancellery had undertaken lobbying work on behalf of the scandal-hit Wirecard financial services company, the Greens, liberal FDP and Die Linke, who are in opposition, are now demanding a formal clarification from Finance Minister Olaf Scholz (SPD).

While Germany’s financial supervisory authorities have been the subject of much criticism after Wirecard declared on 25 June that nearly €2 billion had gone missing from its balance sheets, the ‘balance sheet scandal’ may turn out to be much bigger, involving multiple government officials, including Chancellor Angela Merkel herself.

The article published by Der Spiegel points to two central government connections to Wirecard, which show that “Wirecard and the state were obviously much more closely connected than initially assumed.”

The first originates in the chancellery. The story says that the office and Merkel specifically were involved in helping the company break into China. The day before a trip to China in September 2019, Merkel spoke with the former economy minister turned Wirecard lobbyist, Karl-Theodor zu Guttenberg (CSU).

The same day, zu Guttenberg wrote an email to the chancellery’s finance department head, Lars-Hendrik Röller, on the subject of Wirecard’s entry into China requesting “flanking measures.” After the trip, Röller wrote back saying that the government had raised the issue and promised further action.

It is not unusual that the German government gets involved in government trips. However, this help came after multiple notifications to Finance Minister Olaf Scholz’ office that Wirecard was under investigation, the second point of connection in Der Spiegel’s story.

The reporting states that Scholz had been warned as early as February 2019 that Germany’s financial supervisory authority (BaFin) was looking into Wirecard “on suspicion of a breach of the ban on market manipulation.” Critics claim that Scholz did not push the investigation quickly enough.

According to Green MP Danyal Bayaz, the government’s involvement is suspicious.”How can you lobby for a company when there are already numerous accusations in the air?” Bayaz told Der Spiegel in an interview.

The FDP echoed similar concerns.

The party’s spokesperson for financial policy noted: “The federal government was behind Wirecard despite the most serious accusations and ongoing investigations,” adding that what had started as a balance sheet scandal has “arrived at the heart of the government.”

The decision about whether to hold a special session in the Bundestag Finance Committee could come as early as today (20 July). The opposition believes that the conservative union of CDU/CSU as well as the Social Democratic Party (SPD) will approve the decision.

However, some are not convinced that this will be enough.

“If we should get the impression that the finance ministry does not provide complete clarification, we must consider other parliamentary instruments,” said Bayaz. While this special committee would be the first step, he “wouldn’t rule out setting up a parliamentary inquiry committee in the end either.”

(Sarah Lawton | EURACTIV.de)

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