Before his time in politics, Philipp worked as an investor. According to the Ministry of Economic Affairs, he still holds shares in four companies, including start-ups. At the same time, he is responsible for areas such as digital and innovation policy and start-ups in the ministry.
Sven Giegold, another state secretary, is responsible for the financial support of such young companies, but until mid-December 2022 it was also a matter for Philipp.
The opposition and the FDP consider these links to be dubious. Habeck has to answer questions about what is happening in his ministry again in the Bundestag Economic Committee on Wednesday. According to coalition circles, the survey will take place in public this time and will focus in particular on State Secretary Philipp.
The Ministry of Economic Affairs defended Philipp in advance. The State Secretary is not involved in his official work with the companies in which he has a stake, “especially not with decisions from which they would benefit financially”. He has also been “in no way active with the company since 2019 and has no influence on business policy”. Its shares would be managed by third parties.
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According to Habeck’s department, Philipp reported the investments to the ministry, although according to the rules he shouldn’t have done so. One of the four companies was funded by the Ministry of Economic Affairs. However, Philipp was not involved in the decisions.
State Secretary committed himself as a “business angel”
According to the ministry, Philipp worked as a “business angel” for the four small companies before he took office. These are mostly experienced business people who help young start-ups with equity, management experience and contacts.
As a result, Philipp held “small minority shares without any influence on business policy”, he was neither active on the advisory board nor on the supervisory board, it said. He informed the ministerial administration of his financial situation as soon as he took office.
Philip’s holdings:
- Africa GreenTec AG (Hainburg), founded in 2016, shares of 4.1 percent. Manufacturer of scalable solar containers for power supply in rural Africa. Investors: Green Climate Ventures.
- LMP SAS (Paris, France), founded in 2014, stake of 13.6 percent. Developer of a data processing system. Investors: Arjo, Holnest, Kima Ventures, Odyssey Ventures, Xavier Niel.
- CSP GmbH & Co. KG, (Großköllnbach), founded in 1991, shares of 5.1 percent. Quality assurance software for automated and semi-automated manufacturing. Investors: EOS Partners (Munich).
- MST Group GmbH (Munich), founded in 2009, shares of 8.3 percent. Training and seminar software. Investors: AW Brunn International, EOS Partners (Munich).
Even critics within the Ministry said that Philipp’s case was not comparable in scope to the best man affair of his fellow State Secretary Graichen. In the past, members of the government have held shares in companies time and again.
The Ministry does not consider the case of Philipps and the Graichen affair to be comparable.
(Photo: Reuters)
The only question is where the boundary of bias is exceeded and how to ensure that the rules to avoid conflicts of interest are observed. This is exactly what is largely unclear due to a lack of transparency and rules that are open to interpretation.
Conflicts of interest must be made transparent, said Aurel Eschmann from Lobby Control: “We cannot judge whether and to what extent this happened with Udo Philipp based on the current information.”
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Unlike members of parliament, members of the government do not have to disclose their participation. Philipp only made his portfolio public when the pressure on him grew after “Business Insider” reported on his holdings.
Reinhard Houben, economic policy spokesman for the FDP, considers this to be problematic: “This obligation to provide information should be extended to top political officials such as state secretaries.” Houben is an entrepreneur himself.
There is also criticism of the rules and Philipp’s handling of them in the Ministry of Economic Affairs. Ministry circles say that more transparency is urgently needed. It is surprising that Philipp did not make his investments publicly transparent from the start, although some had advised him to do so.
Greens sharply criticized Jens Spahn for participation
Company investments by members of the government have repeatedly caused discussions in recent years. Today’s deputy parliamentary group member, Jens Spahn (CDU), had to take harsh criticism during his time as parliamentary state secretary in the Federal Ministry of Finance. In 2017 he took a stake in the Swabian start-up Pareton, which offers software for tax returns.
According to Spahn, he had invested 15,000 euros. At the same time, he was the federal government’s representative for fintechs, i.e. young companies developing financial technology.
Today’s Union parliamentary group leader invested in a start-up during his time as State Secretary in the Federal Ministry of Finance.
(Photo: Reuters)
The Green Party leader at the time, Simone Peter, called Spahn’s behavior “highly questionable and unacceptable”. Spahn ultimately sold his shares.
Spahn believes that the fact that the Federal Ministry of Economics, under the leadership of Habeck, considers State Secretary Philipp’s investments to be unproblematic is a double standard.
He told the Handelsblatt: “The Greens apply very different standards when they are affected themselves. One wonders.”
The current economic adviser to Chancellor Olaf Scholz (SPD), Jörg Kukies, sold his holdings in start-up companies when he moved to the Federal Ministry of Finance as State Secretary in 2018.
No transparency and rules that can be interpreted
There is no generally applicable, unambiguous guideline in the federal government as to which holdings are okay and which are not, or at least it is not transparent.
“It’s not enough if declarations of interest are submitted internally and compliance regulations are checked by the ministries themselves,” says Eschmann from Lobbycontrol. For top positions in politics, the declarations of interest should be made public, as is the case with the EU Commission. In addition, it should not be left to the ministries to control themselves.
It is not enough for declarations of interests to be submitted internally and for compliance regulations to be checked by the ministries themselves. Aurel Eschmann, Campaigner at Lobbycontrol
The lack of a benchmark for dealing with holdings is also evident one level down in Habeck’s Ministry of Economics. According to his own statement, the head of the heat department, Christian Maass, has sold all his direct and indirect shares in the Hamburg Institute, which he ran before he came to the ministry. Maass wrote this in an e-mail to the Handelsblatt.
According to a ministry spokeswoman, the fact that a different standard applies to Maass than to Philipp is due to the fact that the Hamburg Institute “essentially” relates to the subject area of Maass. The institute develops concepts for the energy transition. “Therefore, in order to avoid conflicts of interest, the shares had to be separated,” said the spokeswoman.
Philipp’s predecessor is again managing director
In another case, however, participation was again not a problem. Philipp’s predecessor as State Secretary under Peter Altmaier (CDU) was Ulrich Nußbaum. Since 1998 he has been a partner in the fish wholesaler SLH Sea Life Harvesting GmbH.
During his time as Berlin’s Senator for Finance, he had already withdrawn from the company from an operational point of view, while his wife ran the company.
During his time as State Secretary, Nussbaum also held shares in a company.
(Photo: Reuters)
Even during his time in the Federal Ministry of Economics, he had no operational role in the company. Although under Altmaier he was responsible for industrial and medium-sized business policy and the maritime economy, there was no public criticism of Nußbaum’s participation in the company. After leaving the Ministry of Economic Affairs, he became Managing Director at SLH again in February 2022.
With the collaboration of Arno Schütze.
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