German MPs criticise Scholz and Merkel over Wirecard

German lawmakers have censured finance minister Olaf Scholz over the Wirecard scandal, saying he bore political responsibility for the failure of financial supervision in Germany that the saga exposed.

The report by opposition lawmakers, which follows a months long parliamentary investigation, also said Chancellor Angela Merkel was “too naive” about the lobbying efforts of the technology company, which collapsed into insolvency last June after admitting €1.9bn was missing from its accounts.

As well as lashing out at the finance ministry, the report blamed Wirecard’s auditor EY and the company’s supervisory board, saying they, too, had failed miserably in their duty of oversight.

“The Wirecard scandal is much more than an accounting scandal,” the authors wrote. “It’s the biggest stock market and financial scandal in [Germany’s] postwar history.”

It had been made possible, they said, thanks to a “collective failure of supervision”, a “German siege mentality towards non-Germans” and the “longing for a digital champion that could enter the Chinese market”.

Scholz, who is the left-of-centre Social Democrats’ candidate for chancellor in this September’s Bundestag elections, declined to comment. In a statement, EY Germany said it had not received the report and so could not comment on the contents.

The 675-page document, drawn up by the opposition Free Democrats (FDP), Greens and the hard-left Die Linke, has been published as a dissenting opinion to the parliamentary inquiry’s final report, which is likely to be shaped by MPs from the governing parties — Angela Merkel’s centre-right CDU/CSU and Scholz’s SPD.

While the opposition MPs did not point the finger at Merkel, they did say that she had “shown herself to be too naive” in her dealings with one of Wirecard’s chief lobbyists, former defence minister Karl-Theodor zu Guttenberg. He had persuaded her to bring up the company in conversations with Chinese officials during a 2019 trip to Beijing.

The report singled out for special blame the Financial Intelligence Unit, Germany’s main agency for fighting money-laundering and terrorist financing, and BaFin, the German financial watchdog. Both are overseen by the Finance Ministry. 

“For every public allegation against Wirecard, BaFin looked for and found reasons to stand idly by,” the report said. It said the watchdog had “completely accepted the narrative” presented by Wirecard that the company was the “victim of an Anglo-Saxon conspiracy of short sellers and financial media”. 

The MPs said BaFin’s reputation could only be restored through a “cultural revolution”, adding that the “scale of the observed deficiencies and shortcomings” had previously been “inconceivable”.

Notably, the report criticised the FIU and Rolf Bösinger, the state secretary at the finance ministry responsible it.

The MPs said the parliamentary inquiry was not properly informed about a highly detailed suspicious activity report that Commerzbank filed to the FIU in February 2019. The report, and an added explanation by Commerzbank, detailed many dubious Wirecard transactions. But the FIU only forwarded it to criminal prosecutors after the company’s collapse.

The inquiry only learned about the full extent of Commerzbank’s warning to the FIU after public broadcaster Bayerischer Rundfunk reported on the classified documents. MPs censured Bösinger for redacting key information in documents he submitted to the committee. 

The MPs said Scholz and his deputy Jörg Kukies, who oversees financial markets at the finance ministry, bore ultimate responsibility for the “abuses at their subordinate authorities”.

Bösinger and Kukies declined to comment.

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