Thursday, September 09, 2021
Not in the office if searched
Scholz is upset about the ministry raid
The finance minister reacts annoyed because the public prosecutor’s office orders a raid on his ministry. The investigators could have put their questions in writing, says the SPD chancellor candidate. Allegedly, the allegations only target the money laundering unit FIU. Scholz rejects criticism of their equipment.
A good two weeks before the federal election, the Osnabrück public prosecutor’s office searched the finance ministry headed by SPD chancellor candidate Olaf Scholz. There was also a raid in Berlin at the Federal Ministry of Justice, which is also run by the SPD. The investigations are directed against the special unit for combating money laundering, the Financial Intelligence Unit (FIU), located at customs and thus at the Ministry of Finance. According to the public prosecutor’s office, investigations have been carried out against them since 2020 because suspicious transaction reports produced by banks have not been forwarded to the police and the judiciary.
Scholz was upset. On the sidelines of an election campaign in Potsdam, he said that the public prosecutor had questions for the ministries. “That could have been put in writing.” Everyone can now evaluate that for themselves. The finance minister protested against criticism that the FIU was poorly equipped: The agency’s staff had been increased from initially almost 100 to almost 500 employees. “There will be another increase to 700.” The authority has more competencies than before, new management and good IT.
Scholz wasn’t in the office
Both ministries agreed to cooperate with the public prosecutor’s office, but underlined that no investigation would be carried out against members of the ministries. According to the Ministry of Finance, the investigations are against unknown employees of the FIU based in Cologne. According to insiders, Scholz and Justice Minister Christine Lambrecht were not in their offices during the searches.
Several politicians accused Scholz of not having the FIU under control. “All of this does not come as a surprise: The chaos at the FIU has existed since the Ministry of Finance took over responsibility,” said the financial policy spokeswoman for the Greens, Lisa Paus. “We have repeatedly pointed out the problems in the Bundestag.” The integrity of the fight against money laundering in Germany is in question and thus an important part of the fight against organized crime and terrorism. “We now need comprehensive clarification of these processes regardless of offices and positions. Olaf Scholz bears the main responsibility for this,” said Paus. The Greens are the SPD’s favorite partner for the period after the federal election, so the criticism is remarkable.
Investigator: FIU badly positioned
The FIU had been relocated from the Federal Criminal Police Office to Customs in the previous election period under the then Finance Minister Wolfgang Schäuble. Investigators reported that the FIU had insufficiently qualified staff, without experience, poorly trained and under pressure to deal with the backlog. According to its annual report, the FIU received a total of 144,005 suspicious transaction reports in 2020. Compared to 2019, this is an increase of around 25 percent.
“The conditions in the FIU do not surprise me,” said Frank Buckenhofer, chairman of the police union (GdP) in customs, the “Wirtschaftswoche”. The GdP had already pointed out in 2016 that their conception, authority structure, equipment, data access and legal powers were not sufficient. The FIU declined to comment on the investigation.
There was also criticism from the liberals: “After years under Olaf Scholz, the FIU is in a bad state because he treated it like a stepchild,” said the FDP’s financial policy spokesman, Florian Toncar. “In the Wirecard scandal, for example, it became apparent that reports of suspected money laundering were not recognized or forwarded in good time. The search shows: Olaf Scholz has no control over his business area at all.” Left-wing finance politician Fabio De Masi demanded: “We need a financial police with criminal expertise.”
Million payment not reported
According to the prosecutor, the impetus for the searches in the ministries was the evaluation of documents that had been secured during previous searches by the FIU. From this it can be seen that there was extensive communication between the FIU and the ministries. The public prosecutor’s office is investigating “whether and, if so, to what extent the management and those responsible for the ministries as well as superior authorities were involved in the decisions of the FIU”.
According to the public prosecutor’s office, the starting point of the investigation is a bank’s suspicious transaction report to the FIU in June 2018 about payments to Africa of more than one million euros, whereby the bank suspected that the background of the payments was arms and drug trafficking as well as terrorist financing. The FIU took note of this report, but did not forward it to German law enforcement authorities. So there was no longer any possibility of stopping the payments. The investigators also wondered why the number of suspicious transaction reports had fallen to a fraction since the FIU took over the money laundering control in 2017.
According to the Ministry of Finance, which cited a decision by the Osnabrück District Court on August 10, the aim of the searches was “an expanded investigation of the facts.” This concerns the specialist department that is responsible for the Central Office for Transaction Investigations – the name of the FIU. The public prosecutor’s office is primarily concerned with the identification of employees of the central office and information on the extent to which their approach to classifying suspicious transaction reports has been legally discussed and secured.
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