“State failure”? The political wirecard case is just getting started

Accounting fraud, suspected money laundering, an ex-intelligence coordinator and a former minister as lobbyists, and unanswered questions about a trip by the chancellor: the dimensions of the wirecard scandal are growing ever larger – and the political process of coming to terms with it is only just beginning.

An investigative committee is becoming more likely. Many questions remain unanswered – one key question is: was wirecard, as a german fintech company and rising borsen star, handled with kid gloves by regulators despite indications of irregularities?

The damage is already gross. Thousands of investors have been cheated as the share price of the former dax company plunged into the abyss. The federal government is confronted with the accusation that it is only contributing to clarification in bits and pieces.

In june, the payment service provider, which has since become insolvent, admitted to air bookings of 1.9 billion euros. The munich public prosecutor’s office assumes that wirecard has been reporting fictitious profits since 2015, and is investigating the company on charges of professional gang fraud. The damage to the lending banks and investors could total 3.2 billion euros. Central questions in the political reappraisal are when exactly the federal government knew about irregularities and whether it did too little about them.

On monday, FDP politician florian toncar spoke of a "multiple state failure" at various levels. Despite clear indications of irregularities, the financial supervisory authority bafin had not taken the necessary steps. In addition, suspicious reports of money laundering prior to the wirecard insolvency had only been inadequately investigated.

After the special session on tuesday, in which bafin chief felix hufeld is also expected to participate, it will be decided whether the opposition will draw the "sharp sword" of an investigative committee. The latter had access to the files and was able to question witnesses – but had little time for a comprehensive explanation because elections will be held next fall.

FDP and left-wing parties want a U-committee – but they don’t want to vote for it together with the afd. So now it’s all up to the greens, who first wanted to wait for the special meetings of the finance committee. The green politician danyal bayaz, however, made it clear on monday that there is a high probability that a committee of inquiry will be set up. Together, the FDP, left-wing and grune parties achieved the required quorum of one-fourth of the deputies.

A committee of inquiry was then set up by parliament the following week, and the list of witnesses was quite impressive: in addition to SPD candidate for chancellor and finance minister olaf scholz and economics minister peter altmaier (CDU), chancellor angela merkel (CDU) was also invited to testify.

On monday, opposition politicians targeted the chancellor’s office in particular; representatives of the government headquarters were questioned in committee. The main issue was that merkel had promoted wirecard’s entry into the chinese market during a trip to china in september 2019. The chancellor had emphasized that it was customary to address the concerns of german companies during foreign trips. It was not aware of any irregularities at wirecard at the time.

In the fall of 2019, however, there were long critical reports, especially from the "financial times," about irregularities at wirecard. On monday, members of the CDU/CSU pointed the finger at the SPD-led finance ministry and bafin, which had not passed on "warnings" about wirecard to the chancellor’s office.

The SPD, on the other hand, tried to focus on the chancellor’s office. SPD politician cansel kiziltepe said that the "wirecard lobbyism" in the chancellor’s office was frightening. Background: the former secret service coordinator in the chancellor’s office, klaus-dieter fritsche, as well as the former defense minister, karl-theodor zu guttenberg (CSU), had lobbied for wirecard.

It is "frightening" how blue-eyed the chancellor’s office is in dealing with the issue of lobbying, said lisa paus, a member of parliament for the green party. If you want the support of the federal government in germany, you apparently have to turn to former ministers or state secretaries – and then get a "free ride" for appointments even with the chancellor.

And then there’s the fugitive former wirecard sales director, jan marsalek, who is said to play a key role in the scandal. As the "handelsblatt" reported with reference to marsalek’s acquaintances, he is on a property near moscow. There he is under the supervision of the russian foreign intelligence service SWR.

In a response to a question from left-wing politician fabio de masi, the federal government writes that it is not aware of marsalek’s current whereabouts. The question of marsalek’s extradition in the context of the investigation against him falls within the jurisdiction of the law enforcement agencies and the courts.

After the special meeting of the finance committee, there is much to suggest that, in addition to the criminal investigation, a parliamentary committee of inquiry will be set up. Left-wing politician de masi, at least, is pretty sure about that. He bet a red wine that the greens would agree to a U-committee, he said before the meeting began.