The finance minister cannot get a grip on the FIU

Berlin In the first television triall, Olaf Scholz praised himself. It was about the topic of internal security, and the SPD candidate for chancellor wanted to show how he tackles things and solves problems. At the customs, a security agency “for which I am responsible”, as Scholz emphasized, there has been a “huge increase in personnel” and a “considerable expansion of their powers”. The message: In Scholz’s authority, things are going well.

But only one and a half weeks after this self-praise, Scholz brought the problems and omissions back to customs – and in a most spectacular way. On Thursday morning, prosecutors from Osnabrück were surprisingly at the door of the Federal Ministry of Finance with a search warrant. The occasion is an investigation in which the responsible persons of the Financial Intelligence Unit (FIU), a special unit of the customs for the fight against money laundering, got the target of the prosecutors.

It is about the allegation of thwarting punishment in office after the anti-money laundering unit is said to have failed to properly forward suspicious transaction reports from banks in the millions to the law enforcement authorities. The investigators wanted to secure documents in the Federal Ministry of Finance and the Federal Ministry of Justice that provide information about the FIU hung up at customs.

Scholz indicated in a statement that the prosecutors could take political action. Unusually enough, after all, members of the government are actually reluctant to criticize the independent judiciary. The Union’s candidate for chancellor, Armin Laschet (CDU), attacked Scholz for this reason. “You should avoid anything that gives the impression that we don’t have an independent judiciary,” said Laschet. Telling the public prosecutor what they should have done better “is otherwise only known from populist states.”

Top jobs of the day

Find the best jobs now and
be notified by email.

But regardless of the question of whether the prosecutor’s approach was appropriate, the process is uncomfortable for the SPD chancellor candidate, because it throws the spotlight on Scholz’s care group. Despite full-bodied announcements, Scholz has apparently not got the problems at the FIU under control in four years as Federal Minister of Finance.

Scholz after raid in the Ministry of Finance: “Questions could also have been asked in writing”

The structural grievances there have been known for years, and criticism has been hailing for years because, due to some absurd IT problems and serious staff shortages, there has been a huge backlog of suspicious activity reports that the FIU has not processed.

All of this is particularly embarrassing for Scholz because he declared the fight against money laundering to be the top priority when he took over the office of Federal Minister of Finance. “Money laundering is a serious problem in our country,” he emphasized in the summer of 2019. In future, Germany should have “the highest international standards in the fight against money laundering”. Instead, the anti-money laundering unit that reports to him has become the target of investigations because it is allegedly not doing its job properly.

After the Wirecard scandal and the Cum-Ex tax scandal, this process leaves another stain on the vest of the SPD chancellor candidate, who likes to claim to have a solution for every problem. His party advertises in the election campaign with the slogan “Scholz tackles this”. But has he adequately tackled the problems at the FIU?

The FIU migrated from the Federal Criminal Police Office to Customs in the summer of 2017 at the instigation of the then Finance Minister Wolfgang Schäuble (CDU). The restart was bumpy: There was a shortage of workers, rooms, software was not ready for use, and temporary workers had to manually process reports submitted by fax. The FIU started with 165 employees – far too few, as it quickly turned out.

“No effective money laundering supervision”

Scholz can therefore admit that he inherited the problems at the FIU. And he actually tried to make things better. The head of the authority was replaced and the number of employees increased significantly to 470. In addition, the FIU was given additional rights, such as accessing certain data from the Federal Criminal Police Office.

The only question is: Have these improvements been enough to make the agency fit to fight money laundering effectively? The doubts are great. In a secret report at the beginning of the year, the Federal Audit Office came to an almost devastating verdict: The federal and state governments are therefore unable to get the problem under control. There is “no effective money laundering supervision”, it said in the paper.

And when dealing with the Wirecard scandal, the focus was on the FIU alongside the financial supervisory authority Bafin. You have received a “foolproof handout from Commerzbank”, as the left-wing politician Fabio De Masi put it, but initially did nothing. Scholz is responsible for both Bafin and FIU.

The judgment of the opposition is correspondingly harsh after the searches by the public prosecutor’s office. “That is the absolute maximum penalty for Scholz,” said De Masi. He has asked Scholz since 2018 to end the chaos at the FIU. “This is a security risk for Germany.” And Green finance politician Lisa Paus says: “Olaf Scholz has seen the FIU drove the FIU in front of the wall.” He does not have his authorities under control.

The FDP financial expert Markus Herbrand has been dealing with the Federal Ministry of Finance for years with parliamentary questions about the state of the FIU. He is not surprised by the latest events. “Finance Minister Scholz has so far only shown disinterest and neglect in the fight against money laundering in Germany, although he should have worked on the worrying situation long ago,” said Herbrand. The fact that Scholz did not comment on the grievances was significant.

The customs special unit FIU

In fact, Scholz did not specifically address the prosecutor’s allegations. The Federal Ministry of Finance emphasized in a statement that the suspicion was not directed against officials in the Federal Ministry of Finance, but “against unknown employees” of the FIU, “which is based in Cologne”. So far away from Scholz’s ministry.

This ducking away by the minister angered the German Customs and Finance Union (BDZ). The fact that Scholz and the management of the Ministry of Finance only point to the FIU and do not stand in front of it is “the real scandal,” said BDZ Federal Chairman in a message to the employees.

“The BDZ is not aware that the politically responsible persons in the BMF have publicly backed the affected employees since the FIU was established,” wrote Dewes, who was also chairman of the main staff council in the Federal Ministry of Finance for a long time.

The Union, which is in the bottom of the survey, is happy to take up the process. Eventually that could hit Scholz at a sore point. Even in the Cum-Ex affair, he had to repeatedly refer to gaps in his memory. In the Wirecard scandal, the head of the Bafin had to leave, but nobody wanted to take on political responsibility for the failure of the authorities.

“In connection with the public prosecutor’s investigations in his ministry, Mr. Scholz urgently needs to ensure full clarification and transparency,” said CDU General Secretary Paul Ziemiak to “Spiegel”. “That Mr. Scholz again leaves the German public in the dark unfortunately fits into the picture.” After the cum-ex tax deals and after the Wirecard affair, this is “the next case where Mr. Scholz is obviously entangled in excuses”, said Ziemiak.

More: Suspected money laundering cases in the crypto universe are increasing rapidly