analysis
Status: 09/20/2021 1:41 a.m.
The questions in today’s special session of the Bundestag Finance Committee are more than annoying for the SPD candidate for Chancellor. The FIU’s lack of clout in the fight against money laundering shows what Scholz was unable to achieve as finance minister.
Someone who is getting belated satisfaction these days in view of the headlines about police visits to two federal ministries is sitting relaxed in northern Italy. No, it is not a foul-playing public prosecutor from the SPD’s point of view, nor is it an election campaigner who relies on cheap effects: Fabio De Masi is leaving the Bundestag at his own request, as the Left Party politician likes to emphasize. What makes De Masi special: The shrewd financial politician penetrated the now discussed grievances at the anti-money laundering unit FIU early on. “I have pointed out the loopholes at the FIU again and again since 2017,” says De Masi, not without pride.
The fact that the whole republic is now looking at obvious problems with the Cologne customs department is only logical for him, as for some other representatives in the Bundestag’s finance committee. That Financial Intelligence Unit has been a topic in expert groups innumerable times. Critics have spoken of a “time bomb” since the unit migrated from the BKA to customs in 2017. The authority should assess and weight reports of suspected money laundering and other financial crimes. But it is striking how few of the reports from banks, notaries and tax advisors in the much-cited “money laundering paradise Germany” are actually prosecuted.
How can that be? This question is the basis of the investigation by the Osnabrück public prosecutor’s office. On the basis of a case of suspicious transfers to North Africa, the investigators have been trying since 2018 to find out why a suspicious transaction report to the FIU did not reach the police and public prosecutors.
Fire letters from state ministers
The FDP in the Bundestag refers to the previous history from the summer of 2020. At that time, the Osnabrück investigators had already searched the FIU. Shortly before, fire letters had become known from the justice ministries of several federal states in which the state representatives had already pointed out the problem of improperly handled suspected money laundering cases. Last autumn, the Federal and State Justice Ministers’ Conference finally dealt with the problem and found “serious deficits in cooperation” between the FIU and law enforcement authorities.
How seriously or not these warnings were taken in the recently raided Justice and Finance Ministry is a question that concerns MEPs in today’s special session. “The grievances in the fight against money laundering are overwhelming and in the light of the latest revelations we are now calling for answers to difficult questions,” says Markus Herbrand, FDP chairman in the finance committee. “I demand a complete explanation of the misconduct in the area of responsibility of Finance Minister Scholz.”
Construction site “risk-based approach”
It is about the construction and reconstruction of the newly created authority under the care of customs. Scholz’s ministry has limited legal and technical supervision for this. The focus should be on the method with which the FIU processes incoming suspicious transaction reports. The so-called “risk-based approach” is, so to speak, the “sieve” that the government put in the hands of officials to filter suspicious activity reports.
The catalog of criteria, with which relevant cases should be separated from less relevant cases, seemed to be a permanent construction site right up to the end. The head of the FIU reported to the finance committee in mid-2020 that one was faced with the “difficulty of defining criteria”. Specifically, it is about the detection of clues that are “below the threshold of concrete money laundering”, but are “relevant for the law enforcement authorities”.
Where is Scholz responsible?
It appears that the investigations of the Osnabrück public prosecutor’s office are right on the threshold. Neither the Ministry of Finance nor the Minister of Finance are the target of the investigation. The investigators want to find out, however, why the FIU decides on the suspected cases, how it decides.
The opposition sees the candidate for chancellor entirely responsible: “Olaf Scholz tried to give the public the impression that he and the BMF had nothing to do with the situation at the FIU,” criticized Lisa Paus, Greens chairwoman in the finance committee. “The fact is, however, that he was closely involved in key decisions regarding the equipment and direction of the agency,” she says.
The finance minister likes to boast of the agency’s increase in jobs. “We have done a lot”, Scholz defended himself in the third election triall yesterday evening. The once 100 employees have now grown to 500, and it is to become 700. Scholz admitted that the procedures according to which reports are evaluated apparently need to be renewed. Especially since the number of suspicious transaction reports has tripled from 50,000 to 150,000 in recent years.
In the morning, Scholz will probably only face the members of the Bundestag via video. The finance minister is campaigning and wants to continue promoting himself as chancellor immediately after the questioning.