Also, under Helmut Kohl, despite advice from experts to use fiber, the German government wired the whole country with copper instead because the ministry of infrastructure at the time had stocks in the copper business leaving the country's internet behind Ukraine or Belarus.[1]
If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are.
Sure, it's not like Russia or the CCP and you're not in danger of being suicided if you uncover some high level dirt but nobody really ever gets punished when obvious corruption gets proven so I have no idea how they always manage to looks so good in the corruption statistics.
Germany is notable for its lack of “retail” or low level corruption (cops don’t take bribes, you can get a building permit by following the rules, etc). One of the best in the world.
But at the highest levels the opposite prevails, up there with France or even the US. Not Kleptocracy by any means, but bad by OECD standards. Because it’s so institutionalized it doesn’t really appear in those “corruption index” reports that NGOs like to produce.
You don't know how good you have it. The low level corruption is the thing that eats away at your soul and poisons your day to day life.
High level corruption? Awful, but we have that too.
But having to bribe the nurse so that your grandma gets painkillers (or toilet paper!) in the hospital? Having to bribe the police officer to get your driver's license? Having to bribe the lady at the counter working for the City Hall, so that you can actually get papers you need this year, not 2 years from now?
They have it so good because they complain about stuff that is trivial relative to countries like Romania. It's a constant battle and to be satisfied is to give up.
Yeah, right. Survivor bias in action. Romania didn't choose to do a lot of the things it did. It didn't choose to be a Communist state for 45 years, for example. History matters.
Well, the fact that Romania is even less democratic that Germany doesn’t change the fact that Germany couldn’t be more democratic. And to be fair I would prefer if Romanians figured out their democracy themselves rather than have another proxy war happening there now.
To any individual lower corruption is what that matters most. However as a country it is higher level corruption that costs you the most , all the money governments are spending without oversight on Coronavirus response for example . This is lot costlier to the country than a beat cop taking a bribe .
Most ngos and corruption indices focus too much on lower level corruption instead of both.
I believe you are underestimating the negative drag low level corruption has on the economy. It means setting up businesses or conducting any commercial activity is slow and fraught with hidden costs and risks. Information isn't usually freely available and solving problems usually involes "knowing someone" and going through backchannels.
Maybe not that, but pay off the police to seize your servers? That's table stakes for a multinational in a region where they have the necessary influence.
I think something that could be called corruption is everywhere once you know what to look for. The difference is that normal people in Western Europe and the Nordics don't know what to look for.
Bringing a bottle of expensive vodka to smooth over some bureaucratic procedure is nothing compared to what goes on in the big leagues.
At least in the recent literature, that retail corruption is called "market corruption"--this is what we hear about the most when we talk about corruption in India, Nigeria, etc. There is another variety, more pernicious form of corruption, it is called "network corruption": here, corruption is a product of collusion between various groups over the long term. In the developed world, that's what we see, and it is hard to prevent collusive corruption, since there is no money trail. People leave their jobs as staffers to powerful politicians, and then join the k-street.
I agree, it's quite weird. Low level corruption exists but I'd say 99 % of the time it isn't and can't be bought but is awarded through social connections instead.
I suppose corruption at higher levels has greater incentives and is harder to eliminate than low-level corruption (perhaps). I wonder if there are any books on the subject - general principles of how corruption develops and decays.
My impression is that during the formative decades of West German power structures (let's say late Adenauer to early Kohl), the entire surrounding culture of media, regulators and of course politicians and business people themselves, failed to develop an awareness for corruption because everything was so nicely self-regulated by what basically boils down to modesty. In terms of anti-corruption measures it was like that nice village where nobody locks their front door. Now decades of neoliberal ideology have swept away that modesty, greed has slowly shifted from vice to virtue, but the trust is still there. Now working as a deceptive national brand that is quickly crumbling away, without a replacement (reliable countermeasures) in sight.
Oh, the Kohl days have been corrupt enough. A lot as related scandals happened and started then. With the political changes after Kohl it just became harder to keep them covered up. Schreiber is name that came up often enough, and of course Franz-Josef Strauss, the Bavarian political king pin and capo of all Bavarian amigos. And a staunch right leaning conservative.
All western countries are corrupt. The difference from the usual suspects is the way it's done. If in Russia, it may be as simple as cash in hand, in Germany or Britain it will be kids placement into a nice job, maybe a donation to a family run charity org, or a contract to friend's friend's construction company. Or even the good old one,where you do a favour and 5-7 years later, once not in government position anymore,get a board seat in some large conglomerate.The opportunities are endless.
It used to be that way. Right now in the United States, the level of corruption that we see is absolutely off the charts and out in the open.
It's akin to a strange alien weapon for most Americans, that goes off near you, putting you in a state of trance, and you don't even know what's happening.
There is brazenness and blatancy to it, as in "yeah, I did it, what are YOU going to do about it?"
In many other countries the remedy is torches and pitchforks, but here in the U.S. the crime syndicate infesting Washington D.C. is protected by a thick layer of laws and "norms". That's why William Barr can go on TV and say things like "winners write history". Try that shit elsewhere and see what happens.
In the developing world, corruption is quiet, it's subtle. No one is supposed to know you have 5 summer houses, because that makes people jealous and very very stabby. And that's the difference.
I only see it because I grew up in post-Soviet Ukraine. Americans don't have that unfortunate experience.
It's been this way for a while (forever?) in the US... Dick Cheney helped start a war (that killed something like 500,000 people) on knowingly false pretenses partly so that he could give his company Halliburton a $7 billion dollar no-bid contract.
That's pretty standard corruption. But the Bush administration, as rotten as it was, would at least provide schools with resources to open.
Right now that's not happening. Why? Because there is no money in it. You can't get a kickback from a school, you can't get a lobbying gig, you can't get a board seat. There is nothing to gain.
He could get Halliburton billion dollar contracts without a war. Claiming that was a reason for the war trivializes the actual thought process that led to it.
The corruption we see in DE is similar to that of US and even Canada - and it's of a different kinds.
It's not corruption in the classical sense, it actually is rational for the state to prefer copper, if the state has investments in copper - in a kind of perverse way.
Less rational and borderline corruption if an individual state actor has personal investments in copper.
'Big Business' is often done on the basis of relationship, of the advice of consultants, and it's far more of a systematic thing than an overt thing.
For example, there is quite a lot of oversight for things like insider trading, and such shenanigans. People are not taking bribes.
It's rational for congressional members to 'fight' for the big government contract to be located in their district, even if it's not the ideal outcome.
This kind of network/influence dysfunction is a huge issue, and it deserves it's own name, because it operates in a different way, has different results and is way more nuanced.
That said it can have major impacts and it is a big deal, it should not be ignored, but it should be recognized as another category.
FYI - if contractors, suppliers etc. all did a really good job, it would matter less. There may or may not have been shenanigans in the allocating to CGI for the big Healthcare.gov project, but the worst part is that it was a failure. If CGI had of done a great job ... well that reduces the issue of how contracts are awarded.
The city of Montreal had some serious problems with low-level 'corruption' when handing out city contracts - as it turns out, it was partly bad acting, but partly because there was no concept of transparency, bidding, no proper systems and checks for how procurement is made, leaving the door open to city officials getting to go to expensive dinners etc..
I think the issues you've enumerated are actually different types of corruption (or not corruption at all)
A country preferring copper internet because they have large stocks of copper (which makes the project cheaper) is arguably the right thing to do. If it turns out it's a bad decision in the long run (because the negative impact of slow internet outweighs the savings brought by the cheap copper), that's just a bad investment. At worst, it's a mismanaged government.
An individual doing something to gain personal benefits (i.e. Cheney) is more regular, high level-corruption.
Somewhere in between the two, you get regulatory capture.
Then you have things like Old Boys' Clubs where you can't get hired in high-paying jobs unless you went to school with the right people. I'd call that an unequal society.
These are different types of problems which require radically different solutions.
You're being downvoted because network effects aren't the same as corruption. Although it is certainly unpleasant to consider that government officials might be making decisions more favorable to one company than another in the hope or expectation that that they will get a board seat five years hence, it is worth noting that if they upset one company now, they may get the board seat on the other company. And since anything can happen in five years, it may in many cases make better sense to make the right decision, rather than the self-interested decision. Moreover, quite independent of any decisions they make, they remain valuable since they have contacts and know government processes.
So cash in hand is a bazillion times worse than a board seat.
You might have a point if one of the reliable features of privatisations in the UK over the last few decades hadn't been a steady stream of ministers pushing through privatisation - often at significant public cost - and then parachuting straight into the board of the privatised company.
This is a bazillion times worse than cash in an envelope, because it's straightforward larceny of public resources, papered over with some thin PR nonsense about "efficiency".
This current government isn't even pretending to do anything else. There have been so many no-bid contracts for "PPE supply" handed out to cronies with no PPE experience - and no PPE delivered, while lethal shortages continue - that there are are now formal legal challenges working their way through the courts.
> This current government isn't even pretending to do anything else.
The current government in the UK is uniquely poor compared to every UK government that has come before it. The situation there does not extend to "western nations" in general - just those run by incompetent/malignant (take your pick) populists.
The populists may have dispensed with the pretense of claiming not to be corrupt, but the corruption the parent describes was certainly there long before they came on the scene.
I think your core statement highlights the bigger problem with our progression as a society overall;
We don't eliminate corruption as we 'advance', but instead we just keep abstracting it away until the less observant don't see it as corruption but instead some form of 'networking'.
The amount of public money you can funnel out or funnel in by cash in hand is limited to actual cash in hand. The level of corruption at the highest levels are on the order of a billion euros. I am not sure if you can get even close to billions of euros in corruption using only cash.
>If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are.
This is obviously not true. There have been numerous uncovered political scandals in Germany that have led to politicians and managers loosing their job. Christian Wulff (Former German President), Guttenberg (former Defence Minister), etc.
Being Spanish yet having lived in Germany for quite some time, I agree with you...
I'm not saying there's no corruption in Germany - I think there's always going to be some level corruption at a certain scale of state - but there's no need to go as far as China or Russia for comparison. Just come to the South of Europe for a taste of what grand-scale corruption in what are otherwise (seemingly) high-functioning democracies...
I remember watching a Brazilian high government official (Justice minister?) on Anderson Cooper mentioning that Lava Jato had seen ~3 USD billion disappear, as Cooper reacted with a wide-eyed grin... And I thought to myself, huh, that's arguably the largest national corruption scandal in Brazil in recent history, and it's about the same size as the "EREs case" [1] in Spain, which was a regional affair, and where ~3 EUR billion also disappeared. One of many perpetrated by both main political parties in the last couple of decades.
Like I say, I don't think Germany is without corruption, but it's a matter of gradation - it's hard to label it as an "insanely corrupt" country seeing what's out here.
The issue is people are just not aware on the corruption in Germany because there's no "personal" and "everyday" corruption in a daily life.
But if you look "up" the amount of corruption rise to the astonishing levels. Just remember Stuttgart 21 or the Berlin Airport, Hamburg Elb Philharmonic, Battleship Gorch Fock. Germany is full of such corrupt projects, it's obvious and everyone knows about it, but nobody yet went to jail because of it.
Bribery isn't "hard to prove" but instead there are no credible bribery accusations at all. Missmanagement in massive infrastructure projects are a much more reasonable explanation. It also makes a lot of sense because the actors are often state government officials that have never overseen a comparable project. Planning an airport or a new flagship concert hall is difficult. I agree that there were serious mistakes but they can be very well explained by incompetence rather than bribery.
And this cluelessness is then abused by contractors. With flanking maneuvers targeting political leadership. No clear cut corruption, but the lines get blurry.
Fun fact, for a very long time German companies could declare bribes paid abroad in their taxes. Legally. Seems that a lot of people didn't get the memo that bribery was, indeed, illegal now.
> Fun fact, for a very long time German companies could declare bribes paid abroad in their taxes. Legally. Seems that a lot of people didn't get the memo that bribery was, indeed, illegal now.
Surprisingly realistic policy, considering that bribery is simply part of everyday business in some locales.
Of course they would, in some places it's just the way business is done. At least if they declare it, you can plan for it when executing projects abroad.
There's a podcast on this. "How to fuck up an airport". The short answer is that all the bids were realistic-ish, and therefore too high for the budget. So the Berlin politicians went "We'll do it ourselves! Much cheaper!". And lo and behold...
I dont think there is any amount of money i could offer to safely escape a drunk driving ticket, however the ceo of my company was the head of the board for an security company, and we were forced to use their products despite an unimaginable amount of flaws.
The second the security company was sold we were allowed to drop every aspect of that company, 10 huge enterprise products, and the entire IT and Security organizations both agreed that throwing out the whole years roadmap and working to switch vendors as soon as possible was the best use of our time.
Thats a small example of pure and utter -yet legal- corruption. There is no world in which that vendor was the right choice for a single product let alone 10. Except the world where the CEO could make the productivity of one company fungible with the revenue of another.
I think this example is why the appearance of a conflict of interest should be the standard for navigating ethical concerns.
If a guy owns a company, I don't doubt that he believes it's the best at what they do. The one thing most CEOs I've met have in common is they ridiculously overestimate how great their companies are. This guy probably genuinely believed his security company was the best choice. It's "not invented here" on the scale of companies instead of git repos.
I'd wager these are less cases of individual corruption than party-corruption aka horse-trading for influence and decisions.
A classic problem parties have is that they need to take care of their party militants and their families. This typically creates economic activities (insurance, banks, investment funds, charities, community organizations, ..) that are aligned on party lines.
These companies are part of the party infrastructure and are used as power-bases to influence the party as well.
It's called patronage and is rampant in western democracies.
Sustained gross incompetence is usually a mask for corruption. Without the corruption, normal corrective mechanisms that minimize products of incompetence elsewhere are allowed to operate.
Sustained gross incompetence is the norm when it comes to megaprojects like Berlin Airport. Late and very over budget is the norm for projects originally budgeted to cost over $1 billion. You don’t need bribes or backhanders.
I think this amount of money should imply certain existential risk: if you have that power then you are inherently liable.
It’s like Putin - you could call him a democratic asshole, but you would never call him incompetent in politics - because if he was, he wouldn’t be alive by now.
I would not blame incompetence. Same things happen in SW projects all the time. It was wrong planning and organization.
The client was constantly allowed to adjust plans.
I've worked as architect on similar sized projects. You can't allow clients and esp. committees to change direction at all. This a breach of contract. With hospitals, universities, concert halls and airports you need to be strict to the local government, which is the client in such cases.
They are no experts, they change every 4 years, they exhibit irrational behavior sitting in a committee.
It seems like a couple of years ago, once you fucked up, you resigned out of respect to your office/job/position.
Looking at our current Minister of Transport 'Andi Scheuer', this does not seem to be the case any more. He is still in office after burning more than € 500M in the recent toll scandal [0].
Scheuer is my personal pet peeve. His last act was to create road traffic regulations, except he made some procedural errors, so 16 states have to roll them back and implement them again once it has been properly voted on the law. All that after evaporating 500.000.000 € in a pissing contest everyone knew he was going to lose.
The guy is corrupt and comically incompetent, but he just seems invincible. Why is he still in office? My theory is, that it has something to do with his dialect and his overall slightly idiotic appeareance. Though not on the same level as Trump or Boris Johnson, still that seems to give him some sort of protection, because people do not expect anything from him in the first place.
But then again, like OP correctly said: Europes leader has a corruption scandal at home, deleted evidence, the whole thing, but just keeps doing her thing.
The day the CSU is not the majority party in Bavaria anymore is the day freezes over. Only to melt up again when the new government starts scratching the surface of 70 years of CSU governance, friction heat of doing will be significant.
The problem is that gross incompetence is not a crime.
You can't arrest someone on account of them being an idiot.
It's the responsibility of the other party members and especially the opposition to demand him being removed from office.
Funnily enough the Green Party demanded exactly that, but then again that's the same party that wants general speed limits...
So yeah, of course any party that wants to get reelected in Germany will stand behind that clown, as long as that clown fights for "Freie Fahrt für freie Bürger!" and lets them keep their drivers license, because 21 km/h above the speed limit is just a trivial offence...
Nice system you've got set up where it's the job of the opposition party to demand removal from office, presumably without the parliamentary power to actually make it happen. So you get to be corrupt as you want, and when it's found out and nothing happens, the other guys take the blame!
> but in the whole EU commission leadership it would be hard to find someone without corruption scandal, accusation or conviction.
that seems an exaggeration, off the top of my head Gentiloni[0] (economics) has not been involved in any corruption scandal or accusation that I know of, nor was Timmermans[1] (VP).
Yes, but did they got to jail or have their earnings confiscated? Losing your job is not much of a deterrent when you've filled your pockets with bribes you get to keep and have a nice pension waiting for you while being put on the payroll as an external consultant to the $BIG_CORP you helped during your rule.
In order for any of that to happen you'd have to be convicted of a crime first.
This would involve stripping immunity first, which doesn't happen all that often and involves approval from the parliament.
Naturally, this is a partisan issue and members of the ruling parties would obviously vote against it, making it very difficult to achieve in practise.
This is common practise in most democratic countries, though and isn't unique to Germany at all.
It doesn't mean that these politicians are untouchable.
If a politician is being caught stealing (e.g. embezzlement), criminal charges W I L L be put forward and immunity will be stripped from them.
The problem here is that unethical behaviour and gross incompetence simply aren't criminal offences.
Are they to be tolerated? No! But that's a question of changing laws and legislation accordingly, not one of being "untouchable" - because even politicians aren't and that's the point.
There's a difference between conflict of interests/unethical behaviour/incompetence and criminal actions.
The consequence of scandals like this should be a call for tighter laws, increased responsibility of all involved parties and better financial supervision in both politics and private enterprise.
Simply getting out the pitchforks, shouting that all politicians are corrupt criminals and demanding heads to roll doesn't change anything and isn't constructive.
You're still missing the point completely - corruption is a crime. The problem is that pretty much nothing these politicians do is actually illegal and thus doesn't constitute a crime in the first place.
This is why legislation and regulations need to change, because that's way easier than trying to change people.
If you don't like the rules of the game, demand to change the rules instead of shouting "You're all cheaters!" and stop there. That's just cheap and not helpful at all.
I generally agree with your point, but I disagree that legislation and regulations are the problem. Once you reach high level politics, the fact is that anything but utterly blatant criminal behavior will be a political issue.
The solution is that politicians need to be held to a much higher standard than the letter of the law, by their voters. It boggles my mind how many politicians have such obvious conflicts of interest that manage to retain approval of their constituents.
> I disagree that legislation and regulations are the problem
Feel free to disagree with that. I stand by my point on account of the lack of transparency (e.g. no obligation to make ancillary income public) and the legality of the "Revolving Door"-effect.
Government officials in Germany are free to leave office for private enterprise with no restrictions. Public officers have to report lobbying jobs to their former office for 5 years, but the worst that can happen if they don't is loosing their pension.
The latter is not much of a problem, though, if the new employer just pays well enough...
This leads to CFOs of DAX companies becoming government officials in the ministry of finance; public officers serving in the ministry for radiation protection who dealt with interim storage facilities to leave office for (nuclear-) energy companies, and so on.
Holding politicians to higher standards than the law is delusional. Politicians are humans, too. None of them are Jesus Christ incarnate and none of them should be either, because in a democracy they should represent The People, not some Utopian ideal.
> It boggles my mind how many politicians have such obvious conflicts of interest that manage to retain approval of their constituents.
That's because in Germany, nobody knows that there even is a conflict of interests, because politicians aren't obligated to make additional income public.
A reasonable first step would be to make that mandatory (you don't even have to disclose exact sums of money, but it helps knowing that your representative has a paid seat in some board of directors on the side).
> The problem is that pretty much nothing these politicians do is actually illegal and thus doesn't constitute a crime in the first place.
That is an assumption on your part. In the absence of thorough investigations that would condemn or exonerate them, it is difficult to say. Of course, it would be very twisted to say that the lack of investigations is proof of real corruption. Still, it should also not be taken as prrof of no corruption.
Guttenberg had to resign because his doctoral thesis was full of plagiarism. Even the introduction was plagiarized - but with small changes that made it clear that an attempt had been made to hide the plagiarism.
Guttenberg's public image rested on the idea that he was a morally upright, well composed, competent businessman, along with his noble lineage and family castle. The revelations about his thesis destroyed his credibility.
This is rather different from financial corruption of the sort hinted at in this article.
Francisca Giffey, the Family Minister, never resigned when her doctor thesis was found plagiarized.
Also von der Leyen, former German Defense Minister and current European Commission leader didn't resign when she was found that she falsified her official CV.
Guttenberg tried to hold onto his position. He at first rejected the accusations, even though they had already been extremely well documented:
> Ich bin gerne bereit zu prüfen, ob bei über 1200 Fußnoten und 475 Seiten vereinzelt Fußnoten nicht oder nicht korrekt gesetzt sein sollten und würde dies bei einer Neuauflage berücksichtigen
> I am perfectly willing to check whether in any of the over 1200 footnotes and 475 pages individual footnotes were not - or not correctly - inserted, and to correct this in a new edition.
Guttenberg kept to this position for a week, while Angela Merkel and most of the government supported him.
In the end, though, the extensive plagiarism (93% of the pages have at least one known instance of plagiarism) in his dissertation was so well documented that it was impossible to deny, and his statements about possibly having made a few mistakes here and there also looked more and more like outright lies. Nobody plagiarizes to that extent by mistake.
Yeah, Guttenberg and Von der Leyen are definitely on my "bad people"-list.
Guttenberg was even the main candidate to direct some sort of "Internet security/ethics" department (don't remember anymore exactly what it was)? What kind of joke is that?
Von der Leyen was involved in the story about spending a lot of $ for external contracting companies & other stuff, then she got "promoted" to the EU-level => another joke, for me.
You are technically not wrong. I mean Hans-Georg Maassen, head of BfV (spy agency), did lose his job. Not after sharing secret information with neo nazis, that wasnt enough. He doubled down by calling fake news at a video showing neo nazis chasing/beating immigrants. Had to leave his BfV presidency ... for a higher paying position at the interior ministry ;-) aka promotion.
That's true and you are getting downvoted incorrectly. At first the interior minister wanted to move him to another equally well-paid position, but due to political backlash and also Maasen insisting there is a "radical left cabal" against him inside the government was retired early, which is still very much a golden parachute, but also the intended way for the government to remove political officials from office.
Both, he is quite your guy for that. Kind of the lobbying equivalent of SoftBank, as soon as he's involved, probability of things being fishy increased significantly.
> Christian Wulff (Former German President), Guttenberg (former Defence Minister)
None of these two served any prison sentences. Wulff was acquitted after he refused to pay 20k € to make it instantly go away and even had damages paid.
Guttenberg was caught plagiarizing for his doctoral dissertation, which is a rather common thing among German politicans. As a consequence he lost some public clout, but instead wrote a book for even more publicity, afaik right now he's doing some work for Springer in the US, biding his time for a another comeback in German politics.
Meanwhile to this day even Kohl's donation scandal, hasn't seen any proper investigation, nor the Amigo-scandal, NSU-scandal, nor the countless others, particularly on a local state level.
Heck, just look at people like Mehdorn and projects like the BER construction site: He, being such a highly renowned and well paid manager, was supposed to fix that mess. Nothing was fixed, the whole thing is still a massive mess, political consequences for anybody actually responsible? Pretty much zero.
The thing is: We Germans are very good about keeping up appearances, as a result of that inconvenient truths and topics often fall by the wayside.
Losing your job just doesn't even register as an actual consequence when it comes to high level corruption though. Like maybe we should take their lollipops too? No TV before dinner?
I don't disagree that the investment in copper was the wrong decision, but according to that article the minister actually sold his shares to Nixdorf (now Siemens?) immediately before becoming a minister. So I'm not quite sure if this is actually a case of corruption or just a case of being too conservative and incompetent (which is also quite widespread in politics).
He sold his shares hours(!) before being signed on as minister and he sold them to the company that benefited the most from the copper cabling that he pushed for.
How you can mistake this obvious corruption for incompetence is beyond me.
> He sold his shares hours(!) before being signed on as minister
This is normal procedure. There is a rather short timeframe between appointment and becoming a minister. Of course did he sold it only after he know it would be a problem.
> How you can mistake this obvious corruption for incompetence is beyond me.
He had no benefits personally, so it's not corruption.
This is just a nice story you tell the kids to give them a scapegoat, ignoring the historical context. This happend 1982, when Internet did not even exist yet. And fiber at the time wasn't really great as today. Copper probably was indeed the better solution, consicdering that survived the decades, where fiber from that time has already become useless long ago.
> Copper probably was indeed the better solution, consicdering that survived the decades, where fiber from that time has already become useless long ago.
Politics aside, isn't that the problem? Copper survived so it didn't need to be replaced. Fiber would have been replaced with newer one because otherwise it would not work at all. People put up with slow Internet, but they wouldn't have put up with no Internet.
So... if he hadn't pushed for copper and instead did the 'better for society' fiber solution, the company wouldn't have been worth nearly as much, possibly much less.
And those stock sales would have been much less profitable.
Not direct cash bribe but definitely far more motivated than just incompetence.
I don't get it. Once he sold the shares he had no further interest in their value. Nothing that happened once he became a minister could have affected his profits from the sale of his stocks. Why are you saying "those stock sales would have been much less profitable"?!
Legally, that's why he had to sell the stocks, which is a reasonable requirement.
OTOH, it doesn't preclude a mutually beneficial understanding, which the exchange points to. Maybe he had a deal, or wanted to keep the good stock between friends.
Except you're ignoring the part where the copper cable policy he pushed against the advice of his experts made the company he sold his share to obscenely rich.
I don’t see how you could call this corruption, he didn’t benefit from someone else getting rich. Unless there is any evidence that he sold his shares at an inflated price with the understanding that he would pay back the favour while in office or something like that, which I don’t think there is.
It doesn't matter who benefits from this deal, what matters is the country got shit infrastructure against the advice of his experts and the taxpayers paid for it.
Since he signed off on this, it's on him to be investigated.
That's what corruption is.
Of course, if you want, you can cover it up in red tape and make it look like incompetence.
> Corruption is a form of dishonesty or criminal offense undertaken by a person or organization entrusted with a position of authority, to acquire illicit benefit or abuse power for one's private gain
This still lacks the information of his personal benefit. It's just no corruption until you have a benefit from it.
And experts are also no argument, as there are always experts saying this and that which you can call on later for eny kind of complain.
Neither you nor me are informend enough to say whether it was corruption, biasment, incompetence or something else. We don't even know whether it was good or bad for history. 30-40 years are a long time for technology and infrastructure.
This is what I question about Hanlon's razor, "Never attribute to malice that which is adequately explained by stupidity/incompetence."
In practice, when such "incompetence" involves millions (of Euro, dollars, etc.) - and those involved stand to gain from it - we ought to scrutinize it as a possible symptom of "malicious competence".
For me, "incompetence" sounds like an excuse or smokescreen, when there are those who profited from it. After all, numerous real-life cases suggest that corruption is endemic, if not inherent, in our institutions of politics, business, and public decision-making process.
He personally benefited by the increased share price of the company, which would have been vastly less if the policy choice had gone with fiber, which is the obvious choice for an infrastructure _upgrade_.
Germany did quite a lot of ISDN over fibre to the home in the 1990s, most of the recabling in the east after reunufication was done that way.
However, they made the mistake of burying active components along with the fibre strands that only spoke ISDN. And of course no tubes. For upgrades they ripped it out again and built copper when DSL was en vogue... If they hadn't fucked up this badly, probably due to corruption, Germany would have had 20% broadband fibre coverage instantly 20 years ago
Ah I see thank you I recall years ago when I did work on the international side my boss making a comment about ISDN and Germany and I now see the issue they backed themselves into.
The UK could have had much better fibre if back in the 90's Mrs Thatcher's government had given BT a 20 year payback and allowed BT to implement its Fibre plans.
The first paragraph is exactly what happened in Australia too. I will never forgive anyone in the Liberal party (the conservative one) for the treasonous act of deliberately destroying the NBN.
It set every industry in the country back decades. Medicine, education, everything. It makes my blood boil. I have to avoid thinking or reading about it at this point.
Internet in Ukraine and Belarus was not built in centralized manner, but quite naturally, and in competitive environment. Reasonably most places ended up with fiber where it was possible. Monopolist telecoms were not prepared and were overpowered by enthusiasts overcoming communication obstacles in any imaginable way, including legal quirks and vacuum at that time.
Nothing good can be expected when central gotv starts to "innovate".
> Sure, it's not like Russia or the CCP and you're not in danger of being suicided if you uncover some high level dirt but nobody really ever gets punished when obvious corruption gets proven so I have no idea how they always manage to looks so good in the corruption statistics.
That's the thing. The statistics are not untouched either. It's a rather pervasive thing, this corruption.
I also agree with the sentiment, that they do not really get punished. When have I read the last time, that some politician with hundreds of thousands of € of unregistered side-income is put in jail, like any merely normal citizen would for such a hefty sum? Oh wait, never.
Just to add to your list: Read into the history of the Deutsche Bank and their current business proceedings. It's literally obscene the list of controversies that has spun out of their practices, and steadily keeps on going.
Most corruption stats that I have seen are based on perception of corruption. If people perceive it as dodgy but legal, or if people view it as the odd bad egg, then it won't affect perceptions, no matter how rife it is. If it doesn't affect perceptions, it doesn't affect measures.
There’s a really great documentary about how criminals used the disconnect between perception of corruption and actual corruption in Vatican City to launder money for decades. (And still do, really.) The name of the movie escapes me but I’m commenting in hopes that someone here will know.
> Sure, it's not like Russia or the CCP and you're not in danger of being suicided if you uncover some high level dirt
Gustl Mollath [0] would probably disagree with that notion, just like the death of Jürgen Möllemann [1] left more questions unanswered than a proper investigation of him would very likely have answered. Similar situation with Wolfgang Hüllen during the CDU donations scandal.
Similarly the NSU process saw a lot of witnesses die under rather weird circumstances [2].
Mollath wasn’t killed: he was falsely imprisoned and received EUR 670k compensation for that. Mölleman‘s death was suicide (the accomplished parachuter jumped out of a plane less than half an hour after his parliamentary immunity was revoked, opened the main chute, cut it, and didn’t open the reserve, (and the automatic reserve deployment was disabled)).
> Mollath wasn’t killed: he was falsely imprisoned
He wasn't imprisoned, they sent him to the asylum for 8 years because claiming German banks could do criminal things is just such crazy of a thing to do.
Which has quite some similarities to what happened to Hessian tax investigators [0] that were too successful for their own good: Using psychiatric assessments to discredit people who blow the whistle on corruption.
In that context it's quite cynical how nearly every high-profile suicide in Russia is framed as some kind of political hit-job ordered straight by the government, while in other countries people are looking for any reason to deny the existence of foul play.
The main corruption measurement I know of is the CPI: Corruption Perception Index. It doesn't measure how much corruption there is in any given country, it only measures how much visible corruption there is. I'm sure there are other gauges but that's the one that gets reported and made comparisons on.
For a long time Finland tended to be either the top dog on that list, or at least hold firmly its hold in the top-3. As a Finn, I always found that rather depressing, for a simple reason. The top spot on the CPI list tells nothing about how well things are in a country. It merely tells how shitty they are even for the runner-up.
Mindlessly ambitious networks of people who care about themselves more than anything else exist in all countries. Google distribution of personality types within a population. They are weirdly similar across cultures.
Where resources are low and there is not enough to go around for the most ambitious and driven, there "punishment" for wasting each others time and resources is more extreme.
If Facebook or Google or Twitter, one day in the future is sophisticated enough to label the most "corrupt"/"corruptible" individuals in a population based on all their data how would you "punish" all of them if it is 30% the population?
Corruption is crime, not vaguely acceptable opportunism. It has very direct negative social, political, and economic consequences. The fact that someone is robbing people using a company and/or a political organisation instead of guns and knives isn't an excuse - especially not when the sums involved can be so large.
> so I have no idea how they always manage to looks so good in the corruption statistics.
It's all about definition of corruption isn't it?
In European politics and press we describe "outright deliberate corruption" with innocent deceiving descriptions such as "lobbying" and "failed government IT projects".
Is Northern Europe less corrupt than the South? Or is the Northern corruption just more institutionalized (aka: more competent at corruption)? I wouldn't know where to start to get an answer to that.
>If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are.
This generalizes to damn near every government (or any big powerful organization to some extent as well) ever. The only difference is that more money enables some governments to abstract it away and reduce the visibility of it better than others.
The article referenced in your article about that is from 1983. [1] I don't think fibre optics technology was that established at the time. Helmut Kohl's chancellorship was from 1982-1998. During that time, after the German reunion there were large scale investments into an upgrade of the Eastern German infrastructure including fibre glass deployment in the new German Länder. Therefore for a long time this area had some of the most modern telecommunication infrastructure world-wide - and for that matter probably also highway infrastructure.
This doesn’t matter as what you are stating is false assumption.
Deutsche Bundespost built a first fibre optics link in 1978[0].
In 1981 they „ruled“ to invest in fibre tech over the next 30 years. Guess who canceled that. You can also find more in-depth Info and should definitely read [1].
Also the Russians got to Kohl in 1986/1987 and offered him the reunification. But he refused in fear to loose the Bundestagswahl of 1987. This guy was one the ridiculous politicians we ever saw. Heck.. the bribe money the CDU owned that was stored in Switzerland even has ties to gold the Nazis stole from the Jews.
Never trust anything the CDU does. Never trust anyone of the high ranking politicians.
Always ask yourself: Qui Bono?
[0] https://de.m.wikipedia.org/wiki/Lichtwellenleiter
[1] https://www.heise.de/newsticker/meldung/Missing-Link-Der-Kam...
I am an expat living in Germany. I laugh out loud at such amazing statements such as yours. Whatever Germany's shortcomings, its heavy history, its complicated laws and customs... I would still take this over any other Western country.
> If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are.
Trust me, we know.
I speak for central/eastern Europe: where Deutsche Telekom has a big market share you can bet they formed a cartel and the prices for phones are higher than in western Europe.
(edit) Also: basically nothing of relevance happened in Europe after Volkswagen diesel scandal... I wonder why.
You really lost me there. The gap is civilizational. Russia and CCP are systemically corrupt, those countries must collapse for there to be a chance to uproot that disease. Pretending like it’s even meaningful comparing them to Germany on linear scale just creates suspicion in my mind that you’re part of somebody’s propaganda machine.
>If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are.
Replace the DAX with Nasdaq and America is basically the same. We just have different names for it like lobbying.
This is just conventional lobbying. It's pretty bad when the lobbyists come from a company with a monopoly like an ISP but every other company is still at risk of being boycotted.
the concept of strong inner connections between top politicians and top businesses applies for almost every country regardless of the political system. so corruption in that sense is everywhere in every layer of society.
Sadly can't read the article as I don't have a subscription but have followed this in the FT.
Germany has an ultra-protectionist political culture for pet German companies. Wirecard was one such pet company but there are many others who have benefited from implicit state support in the form of lowered standards and private favouritism: Deutsche, VW, Siemens, etc. Wirecard even holds a banking license so should be subject to quite a lot of oversight from the regulator but the head of BaFin ("Germany's SEC" as the headline states) makes the risible excuse that he didn't apply proper oversight to them because they are arguably a "technology company".
Disappointingly there is very little doing. The pan-EU regulator, ESMA, basically is not equipped to properly investigate and censure BaFin - they're really just a standards body similar to the IETF or ANSI. No I can't imagine much will change.
> BaFin ("Germany's SEC" as the headline states) makes the risible excuse that he didn't apply proper oversight to them because they are arguably a "technology company"
Given that they've been deeply involved in regulating cryptocurrencies in the last years, that's a bullshit excuse if I've ever seen one.
Not least because while they claim they weren't doing proper oversight of Wirecard they still somehow managed to find time to litigate against various market participants and newspapers trying to blow the whistle (including the FT), banned short selling, etc.
"Went missing" is a weird way to put it, because it never existed in the first place.
If I convince everyone I have a Rolls Royce Sweptail in my garage(even though I don't), but then someone opens the garage and says there is no Sweptail in there, I don't think anyone would describe the Sweptail as going missing - merely that its existence in my garage was a lie.
Wirecard as a whole does not hold a banking license, only their banking subsidiary does. They were actually properly regulated by the BaFin, but everything else had much more loose oversight.
They were absolutely not properly regulated by BaFin. For starters the bank released false accounts to the public - as Wirecard Bank is 100% owned by Wirecard it's accounts aren't broken down from the (fraudulent) Wirecard accounts under the rules for consolidated subsidiaries. I think this is a big problem for a regulated financial institution.
Secondly, Marcus Braun (Wirecard Chief Exec) managed to take an unauthorised director's loan from Wirecard Bank equivalent to 1/5 of the banks equity capital. He eventually relented and repaid the money but not BaFin does not seem to have gotten involved. Surely this should have at least rung alarm bells!! Apparently not, BaFin continued to sleep on the matter.
Finally, Wirecard bank has now collapsed in a disorderly fashion with depositors unable to access their deposits for a period, foreign regulators freezing funds to defend depositors, etc. Wirecard Bank is a very small bank. If BaFin is fluffing it up this badly on the easy cases, what is going to happen when a big bank goes bust? There were rumours in 2017 that Deutsche was going to go insolvent - how much confidence to you have that BaFin would manage that process well? Or would we find also that 50% of their balance sheet does not exist?
In my experience this is a truism. Licenses almost never are held by the "top" legal entity in a firm, but fall to subsidiaries. The thing is that oversight not always carries over the boundaries of legal entities. Perhaps dividend arrangement do, but if other parts of the firm are in (regulatory) different markets it often ends the oversight of the regulator.
My theory is, that the German state sees the companies as work creation schemes. Some of the smartest people work at big corps, but most people there are just running around burning money, but at least these people don't count as "unemployed".
Companies are work creation schemes. Some government even set up investment vehicles for the sole purpose of creating jobs because that's cheaper than using the same money to support people directly. It doesn't always work out but there are examples of this succeeding beyond anybody's wildest expectation.
Not only that, they went after the short sellers who were writing about it publicly.
> Germany's pursuit of short sellers began when Perring’s previously little-known outfit, called Zatarra Research, published its report about Wirecard.
> In March, just three months before Wirecard’s collapse, prosecutors dropped their case against Perring after he agreed to make a donation of an undisclosed sum to a charitable organization.
Finance watchdogs are archaeologist organizations when it comes to fraud, they come in after the fraud has blown up and sift through the evidence to see what happened. Between that, they are busy going after people with too little money to defend themselves mostly.
This is the true value of short sellers to the market. They were blowing the whistle on Wirecard for years before the regulators or company insiders did anything. The problem is they always look like fools while the company valuation goes up but then get vindicated all at once when it collapses, if it ever collapses.
This is the problem with short setlling - you don't need the company to be a fraud, you need it to be publicly outed as a fraud in a timeframe you can afford. This is what distinguishes 'The Big Short' and Bill Ackman with Herbalife. The mortgage crisis had a timeline for when the collapse would happen, that was the key. With Herbalife it was down to Ackman to convince the entire market that Herbalife wasn't a real business.
Herbalife still is a 'real' business. Ackman would like you to think otherwise but it still is. The whole thing might be a point against short sellers.
Another famous short seller, John Hempton, responded to Ackman's short with a very public investment case for going long Herbalife (he argues it's a kind of social club with supplement sales attached as dues). Short sellers definitely don't bat anything close to 1.000 though.
No, it's only insider trading if the information is based on insider (AKA private) information. Anything that can be derived from public information, even with a stretch, is also considered public.
Are you sure you understand it? Insider trading is not limited to employees, that's a common misconception.
I don't know the German law on the matter, but I would wager that the prosecution was warranted, even when the court ends up determining that the charge doesn't hold.
You definitely do not understand the word, because it is not limited to people, the word "insider" is limited to the information: is the information publicly available? If the answer is "no", then it is "inside" information, and trading on it is "insider trading".
These short sellers were trading on publicly available information. They just gave this information more publicity after getting their short positions, which is what you should do if you discover a market inefficiency that nobody else has discovered yet. That's your reward for making the market more efficient.
BaFin claims that this is insider trading was BS then and is BS now. They just don't understand how markets work, what their job is, and as a consequence did a poor job.
> These short sellers were trading on publicly available information.
We're talking about positions that were opened right before the FT article was published. The FT article included allegations by an insider, it wasn't only public information.
Granted, there was also publicly available circumstantial evidence that things were fishy at Wirecard.
Either way, these short sellers weren't convicted, that doesn't mean they shouldn't have been investigated.
The earliest article I can find from the FT that references insider allegations of fraud is https://www.ft.com/content/03a5e318-2479-11e9-8ce6-5db4543da..., which was published almost three years after the report referenced in the Yahoo article. What article was this supposedly timed with?
Exactly, short-selling and writing a damaging article is kinda similar to Casino Royale... Just well, you don't try to explode a new airplane prototype while fighting off James Bond, you just write a damaging blogpost. The concept is the same though.
Looks like BaFin was not merely incompetent but actively malfeasant. People were apparently wrongly convicted due to their good-faith efforts to expose the fraud.
BaFin’s role includes ensuring that listed companies abide by securities law, for instance by communicating truthfully with their shareholders. But BaFin didn’t look into the lawsuit’s allegations against Wirecard because there was no evidence the company had provided misleading information, the spokeswoman said.
Instead, BaFin opened a probe into the accusers. Wirecard had filed a complaint with the agency and the Munich prosecutor after the suit caused its stock to slump. Two former officials of the small shareholders’ association were charged, convicted of market manipulation and handed suspended prison sentences.
Are these folks going to have their names cleared now?
The good part of it is that since Madoff the SEC is paying money to the whistleblowers, proportional to the money that they ultimately recover in fines. There's now even a proper industry of lawyers that will help you package the whistleblower case for the SEC.
Any of you out there seeing fraud - please help clear the system and get yourself some good retirement money!
> consider the length of time it took for the US SEC to catch up with Bernie Madoff
Because it's critical to force a negative example about the US into a negative story about Germany.
Psychologically this happens so frequently (read: in all cases) because it's a suffering relief valve, it actually makes people feel better and relieves their mental anguish, so they're quite compelled to do it. That relief is so effective it's very difficult for people to resist. It's why whataboutism is so extraordinarily popular in general.
Pretty poor analogy, since rather than just being slow to "catch up" to the fraud, the German government actively abetted it by jailing a short seller and halting any short selling of Wirecard.
Additionally, Madoff's fraud was of a private investment fund only open to higher networth SEC-accredited investors (who presumably need less protection), whereas Wirecard was publicly traded on a major exchange, where anyone could buy shares of it.
There is also an element of hubris where Germany and the EU so badly wanted to have a tech champion emerge that was competitive on a global level, where they looked the other way anytime someone raised concerns. The FT has been criticizing Wirecard for yrs..
The EU is far larger than Germany, though it is definitely one of the larger economic drivers. But France, Sweden, Switzerland, the Netherlands and Germany too have their own contributors who quietly perform and try hard not to attract too much attention to their origins.
The denial here was pretty strong, as Wirecard was one of the few success stories of a German technology company rising into the DAX that _wasn't_ founded over 80 years ago. Sadly, this may only fuel skepticism towards tech further instead of causing the possibly necessary reforms.
Op was speaking in the past tense and implied that it's _not_ a succes story because of the fraud and lies. So I'm guessing you're being downvoted for overseeing that part.
I would like to see EY pay for the whole thing (since they were paid to check the books, which they obviously didn't). Also a big tree of associates and their superiors from BaFIN, Wirecard, EY, KPMG, etc. (maybe also some institutional investors, who are supposed to do due dilligence) getting fired and prosecuted for defrauding and not checking properly, please. But I am dreaming - three people will get convicted, some ten-points program will get presented to reform BaFIN so business can continue as usual.
IIUC, EY was paid to check that what was reported in the books balances to zero.
They were not paid to check that what was reported in the books was "correct".
That's not EYs job. If somebody thinks a company lies in their books, they report it to BaFIN, and it is BaFIN job to investigate. They did the opposite of that here though.
Because people make mistakes, and if you make an accounting mistake in a company listed in one of the largest indices, those mistakes are usually in the order of billions.
So it definitely makes sense to require multiple accountants to check the books of these companies _for mistakes_.
Also, running the simple algorithm is the last step of the job. When somebody gives you their books and transaction data, you need to convert that to a format you can first process, which is 99% of the work. Books, receipts, etc. come in dozens of different formats. Running the algorithm is 1% of the job.
E&G is required to check that, if there is a receipt from an external company that gave Wirecard 2 billion, and another receipt of Wirecard sending those 2 billion to a bank in the Philippines, that those are properly noted in the books and everything balances out properly.
They are required to assume that Wirecard is working in "Good faith", and this is not a German thing: everything else is just impracticable.
Even if you were to throw an infinite amount of money and time at the problem to verify that all transactions actually happened as reported, if all sides of the transaction are in on the scam (the company that gave wirecard 2 billion, wirecard, and the bank that stores them), then there is no way for E&Y to find out.
If they are aware of criminal activity, they must report it, and maybe E&Y did not wanted to be aware of that, but who knows, maybe Wirecard was just good at scamming, or E&Y was aware of that and reported it to the German SEC. We do know that a lot of people did report Wirecard to the German SEC over the last 10 years due to suspicions of criminal activity, and the German SEC, which is the only authority that can investigate Wirecard properly, did nothing about that.
It absolutely is the auditor's job to check that what is reported is "correct". The auditor's task is to check that the company's financial statements give a "true and fair" view of the company’s business.
Auditors are expected to confirm e.g. that inventory counts are correct and inventory valuation is reasonable, that accounts receivable represent actual claims on counterparties that actually exist, that bank accounts listed in the accounts exist and have the correct balance, etc.
To be fair, so was literally everybody else since FT published its story about this in January 2019 and Singapore raided Wirecard offices in February 2019:
What do you expect from a country where the largest bank has been knee-deep in money laundering scandals for years and where $36b of tax money were stolen in the cum ex scandal while politics looked away?
Germany has a very high amount of corruption, even if the statistics look solid. This case of looking the other way is probably even a more benign example.
It is entrenched in the (political) culture of Germany. As I said, metrics are difficult to compare, so determining the degree of corruption is always a poor approximation. Transparency International usually has some good data, but they are completely off when it comes to Germany.
We have cases were public officials got bribes and weren't convicted or even didn't lose their position. Our former, former chancellor Kohl still refuses to testify against people that were involved in illegal party donations for his own party. He promised to keep it secret. The public is just told that these dirty money trails are "political reality".
But these are just the higher profile cases. It is prevalent in the industry too. That can have advantages as business do cooperate very closely with each other, but corruption is the inevitable result. A start up culture like in the US would just barely be possible, because established players will get their hands on the money that is available for investments.
Additionally, EU initiatives against corruption that mostly tried to introduce transparency about financial transactions are always rejected by Germany, with dire consequences for other countries.
Officially there is no legal term for corruption at all. Using your position of power to further personal gains is completely legal if no other laws are violated. There was "Amtsmissbrauch" at some point, but that was scrapped by the Nazis. Contemporary politicians probably think that not everything they did has been bad...
Aside from that there is also a lot of child abuse and getting dissidents declared to be insane by state authorities, but that is another story.
The CPI is a corruption -perception- index and Germany can be quite discrete about corruption and there is a tendency of people to believe the state. Neither Hitler nor the GDR-regime could change that apparently.
You're claiming CPI is off as well as Transparency International. So what exactly are you basing your claim on that Germany has a "very high amount" of corruption? Just your personal impression? Seems very prone to be biased for many reasons.
> Sure, it's not like Russia or the CCP and you're not in danger of being suicided if you uncover some high level dirt
You are not going to get disappered, but you are in danger of getting a fraudulent "psychiatric diagnosis" if you are a tax investigator uncovering dirt about some politicians or their cronies.[0][1] In this case the investigator got free, but I am sure there are some cases out there of people who didn't got as much publicity. Consequences for the people that instigated this? None! Nothig to see here, move on... And the so called "Psychiatrist" is still free, and had to pay a meagre 200000 in damages.
> lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are
That is so true, I always cringe when people use Germany as an example of a society that doesn't have a lot of corruption -- we have, it's just buried under lots and lots of red tape...
The affair you're talking about happened more than a decade ago, it was a major and pretty unique scandal in Germany, and the "expert" has been convicted not only to pay damages, but was also found to be guilty of malpractice. The state eventually offered the investigators to be re-hired.
There were no consequences for the "instigators" because, to my understanding, it couldn't be proven that there was criminal intent.
The events got plenty of media attention and high-ranking officials and judges denounced the actions of the agency.
No country is safe from corruption, but this story certainly doesn't support the notion of the country being corrupt, much less "insanely corrupt".
I mean, in Wirecard prosecutors literally went after short sellers with criminals charges. For years. They only dropped charges a few months ago after a donation was made to a charitable organization. Seems pretty similar and pretty corrupt to me.
edit: I guess "we'll ruin you and throw you in jail" is better than "we'll throw you out a window" but it's still pretty bad.
edit2: And if Wildcard hadn't imploded there'd have been no scandal about prosecutors going after critics. No issues with silencing complaints or limiting freedom of speech. Just another part of doing business against companies the government support.
> I mean, in Wirecard prosecutors literally went after short sellers with criminals charges. For years. They only dropped charges a few months ago after a donation was made to a charitable organization. Seems pretty similar and pretty corrupt to me.
Corruption, or (gross) incompetence? Don't attribute to malice what can be sufficiently explained by stupidity.
Misplaced trust, broken culture, political pressure, or even actual corruption - we simply don't know what happened.
Is it unique? Didn't Gustl Mollath [0] also end up in a psychiatric facility and it started with him claiming that a bank was evading taxes? He was involuntarily committed to a psychiatric facility. After years in there it turned out that his claim about the tax evasion was reasonable. From what I can tell, he spent ~6 years locked up in a psychiatric facility and got €600,000 in damages.
Based on your "also": According to the spiegel article the investigators didn't end up in a psychiatric facility, but got a diagnosis of inability-to-work and pensioned.
And it happened in Bavaria. We do have a certain tradition with such kind of things, it even has nickname since the Strauss days: Amigo Affairs. Most high level political corruption and fraud cases had Bavarian politicians involved. Especially when arms or taxes are involved.
4x 200k and 600k EUR are among the highest damages for pain and suffering ever awarded by a German court, so as far as legally resolved processes go these are very unusual.
Did you actually read the Wiki page? There is a lot of context you are leaving out there.
Based on my reading this was not some grand conspiracy by a bank to silence a critic. It sounds like this man certainly did have some psychological issues and assaulted his wife multiple times. Due to his history and his behaviour during the following court case he was locked up in psychiatric care.
He did make allegations about a tax evasion scheme during the court case about the assault (and these were wrongly seen by the court as a sign of his psychological problems). But it's not like he was a whistleblower who was silenced through some made-up allegations.
The Wiki page also says that the "reported money transfers were not illegal per se", so this isn't even a clear cut case of tax evasion.
Clearly a lot of things went wrong in this case and he was partially acquitted and compensated later on. But I don't think this is any evidence for systemic corruption in the entire country.
> The judgment was based, among other things, on the opinion of expert Klaus Leipziger from Bayreuth, who attested to Mollath's paranoid delusions of a "black money complex"
> The first medical specialist statement on Mollath's mental health was created solely from information provided by his wife; the doctor in question, Gabriele Krach, consultant psychiatrist at the Klinikum am Europakanal, had not seen Mollath even once.
> In contrast, Hans Simmerl, the consultant commissioned by the local court of Straubing to assess Mollath's mental health during a trial pertaining to his guardianship/health care, conversed with him for several hours in 2007 and did not find any evidence of mental disorders;
> On 19 February 2013, Strate applied for a trial de novo based on evidence that the presiding judge had committed numerous instances of perversion of justice against Mollath in the case. According to Strate, the judge was responsible for Mollath's detention for almost three weeks without disclosure of the charges or presentation to a judge, failure to respond to Mollath's complaints or forward them to the higher court that should have decided them, manipulation of the court's composition, obvious misrepresentations in the reasons for the judgment, and unconscionable refusal to discharge Mollath's assigned counsel in spite of many petitions to do so, followed by use of said counsel as a witness against his own client.
> On 18 March 2013, in a very unusual move, the prosecution also applied for a trial de novo, based on exculpating evidence that had surfaced only after the original trial.
> Judge Otto Brixner had to admit before the committee that he hadn't read Mollath's written defense which he claimed to be irrelevant in his judgment. In June 2013 Mollath testified before the committee, repeating his claim that he wasn't allowed to give evidence during his trial.
> On 6 August 2013 the Oberlandesgericht Nuremberg (higher regional court) ordered the reopening of Mollath's case. He was released from mental hospital immediately. The court found that the medical certificate documenting the alleged abuse of his wife was a "fictitious document", because it appeared to be written and signed by Dr. Madeleine Reichel, who never had examined Mollath's wife. Instead the author of the report was her son, then a doctor in training.
> Mollath's 2018 action for damages by the unlawful custody has been concluded in November 2019 by an ex gratia payment of €600,000 by the defendant Free State of Bavaria.
> Ultimately, the court considered the aggravated assault proven, but fully acquitted him on the other charges citing insufficient proof. Criminal insanity was also considered unproven; Mollath was held in a psychiatric ward unlawfully and was entitled to a compensation. The acquittal from the first trial could not be overturned though, and Mollath was acquitted on all charges.
Current head of the EU comission and former defense minister Ursula von der Leyen is another perfect example of German government corruption. She provided old buddies at various companies with jobs and tons of money for suspicious "couselling", nothing of consequence from that, she just failed upward.
Maybe you can't bribe a policeman at a traffic stop in Germany. But in the levels above that, there are plenty of current egregious examples of corruption that has happened and was systematically covered up or ignored.
Short summary in english of the contents of the spiegel article:
Four Hessian tax investigators noted many problems.
Their employer (the state of Hessen) got them psychiatricly examined. The examiner found them "paranoid troublemaking" and that they lost their sense for reality.
Therefore, they got diagnosed as permanently unable to work and pensioned.
According to the wikipedia article the psychiatrist has to pay the four people 226.000€ as compensation for reduced income.
According to the article by Spiegel, the psychiatrist concluded that the condition is chronic and consolidated, therefore, no second opinion is required.
But according to the wikipedia article, they later got more opinions when they got the conclusion overturned in court. (Including a famous psychiatrist whos assessment also helped overturn the Mollath case)
>According to the article by Spiegel, the psychiatrist concluded that the condition is chronic and consolidated, therefore, no second opinion is required.
Yikes, the fact that such a life-changing diagnosis is not subject to a second set of eyes is disturbing.
Opinion yes, but the second assessment ("Gutachten") will not examine the accused personally, only the paperwork. In all cases psychiatric assessors will trust their colleagues more than written defenses or observations. Only if the first assessment is internally severely flawed it can be overruled. In most cases the first assessment just ignores any contradicting evidence, so the independent assessors had no chance to find out any contradictions or flaws. It simply is not in the papertrail.
The Gutachten is done directly on the patient if it is so ordered by the judge. It is supposed to be an independent assessment, not even caring what the first assessment was stating. What are you talking about?
If so then good. My wife is psychiatrical assessor in a lot of such cases as 2nd or 3rd assessor, and she never sees the patient. Only paperwork being send around.
I was thinking, that in a scary way, the psychiatric diagnosis for people investigating corruption in Russia or CCP does start to make sense.
It is such an extreme risk to go against these regimes, both to their and their relatives' safety and livelihoods that it makes their actions seem insane. Extreme risk-taking without regard for consequence, suicidal tendencies, paranoia towards the government, unbounded anxiety. At the same time, where they live – all of these are reasonable reactions of a thinking human being, consistent with their environment.
I want to stress, that this is more of an ironic observation. I admire the bravery of such people and I despise the current Russian regime, it was the biggest reason for my emigration.
BTW this is why arrest records are public in the USA. The British would arrest people and their families and friends couldn’t tell what had happened, so as a result you “can’t” be secretly arrested.
I put “can’t” in quotes because of course there are a bunch of ways the rules get bent and twisted, but I suspect the number of arrests unreported by 24 hours is pretty close to nil.
OTOH the system has adapted to this constraint: since they have to be reported anyway the police have inverted the sense and adopted the “perp walk”, which prejudices the accused’s chances in court right up front. And of course extrajudicial punishment skips the whole apparatus in the first place...but that can happen anywhere.
Please be aware that presently the American federal government seems to be systematically arresting some protesters without doing any paperwork (and therefore no public record, except for the testimony and video of victims and witnesses.)
> Pettibone said he was put into a cell. Soon after, two officers came in to read him his Miranda rights. They didn’t tell him why he was being arrested. He said they asked him if he wanted to waive his rights and answer some questions, but Pettibone declined and said he wanted a lawyer. The interview was terminated, and about 90 minutes later he was released. He said he did not receive any paperwork, citation or record of his arrest. [...] In a statement, the U.S. Marshals Service declined to comment on the practice of using unmarked vehicles, but said their officers had not arrested Pettibone. “All United States Marshals Service arrestees have public records of arrest documenting their charges. Our agency did not arrest or detain Mark James Pettibone.”
There are also a few videos confirming at least some of those details; namely camouflaged men, faces covered, pulling protesters into unmarked vehicles. In one of the videos, the men with guns tell other protesters that they'll be shot if they try to follow the unmarked vehicle. The local PD claimed they didn't arrest anybody.
> One cop was heard saying "If you follow us, you will be shot." San Diego police reported the protest was the biggest and most peaceful protest in San Diego so far, and nobody was arrested.
Reminds me of people who were arrested and convicted of "resisting arrest" and no other charges. That should not be a thing. If you're being arrested and the charges are never laid, or are later dropped, resisting arrest should be dropped too.
Yes, the US has a number of other mechanisms that are illegal/immoral in other countries such as the “charge stacking” you describe, plea bargains (there such an asymmetry in power that they are hardly “bargains”), and prison labor.
Not picking on the US here: the inverse is true as well: the adversarial trial system and juries, separation of prosecution and the judiciary, etc imho provide stronger protection for the accused.
Societies are complex and the design is far from understood.
Yeah, but you can literally be 72 hour psych holded with absolutely zero contact with the outside world by the decision of a single, simple psychiatrist. That's arguably worse than being secretly arrested.
Yeah that’s a good example of extrajudicial punishment. Well, a terrible example, but “terrible” in the sense of its abuse.
I wonder how 72 hours can be constitutional when arraignment is typically supposed to be 24. Perhaps it’s like fingerprints, where assumptions rather than science dominate.
The idea of a brief psych hold is reasonable on some platonic level (I’ve had friends have psychotic breaks who were far better off not being in a conventional prison) but the reality, and the opportunity for abuse are far from that ideal.
There's stories/news articles about psych facilities and hospitals that feed them with patients to get government money and insurance money. Then people are kicked out at the end of two weeks. Some judges are complicit in this, they go along with whatever the medical staff says.
Yes, definitly, there are places in the world where such relevations are much worse with much more dire consequences -- I have nothing but utmost respect for people that still don't bow under such pressure -- I am sure I couldn't do it. I was born in the eastern part of Germany, when it was still called "GDR". Most people here still have quite some "paranoia towards the government", pretty much understandably so. I was too young to experience it myself but I know a lot of stories from my family members on how life was in these times, especially how you had to maintain a double persona in public life and be always on guard on what to tell people and whom to trust.
Well, that's an example that I'd consider specifically Bavarian, where CSU has been ruling for longer than the CCP has been ruling the PRC (no joke, if you ignore the wartime years the CCP already held power pre-PRC). On a national level things aren't looking quite as grim.
It happened in Frankfurt (Hessen), not Bavaria, you're probably referring to the Gustl Mollath case -- which is eerily similar. You're right its not a systemic issue I think (I hope), but it sheds light on the role of psychiatric "experts" in court proceedings and how corruptible they can be in some cases.
" On a national level things aren't looking quite as grim"
With the recent Amthor scandal, where many established politicans really did not see a scandal at all(probably because it is normal), I am sceptical to this claim.
> I always cringe when people use Germany as an example of a society that doesn't have a lot of corruption
It is definitely interesting how perception works both inside and outside a given actor/nation. What I found illuminating was learning about the German bribery tax break[1][2].
Often when a country has a reputation for low rates of corruption, it is because corruption has been concentrated in fewer hands--wholesale, not retail--and the transactions are correspondingly larger.
In such places, retail-level corruption can be seen as competition with the market dominator, and crushed.
In the US, offering and accepting political bribery have both been officially decriminalized. The profit ratio of bribe to private benefit is typically well over 1000x.
This is one of the things that has always concerned me about the idea of putting legal restrictions on people in the US based on mental health. The idea that a diagnosis could be assigned without any type of independent medical or blood test that can disproved it is frankly terrifying.
For the most part(in the US) mentally ill people decide on their own that they have psychiatric problems and then actively seek confirmation of their beliefs with a professional diagnosis.
Actually it did not - SoftBank employees contributed into a special purpose fund created for this investment, and that fund bought a convertible bond issued by Wirecard.
Although it has been reported as a "SoftBank investment", it's pretty clear that no SoftBank money was part of the deal.
That's almost worse. The fact that SoftBank employees were willing to pile their own money into this fraud should tell you something about the due diligence they're doing when dealing with other people's money.
I don't think you're aware of all the details here. The special purpose vehicle also structured a transaction with Credit Suisse which effectively allowed the bonds to be resold immediately to institutional investors. The fund (i.e. SoftBank employees) had no ongoing risk exposure and pocketed the pre/post-deal spread in the share price.
Indeed, after my comment on that last links thread, I took out a sizeable short against Softbank, which paid fairly well. Masayoshi San's reality distortion field has since pulled a second (or third even) act against investors, perhaps time to double down.
But they all know how "important the car industry for germany is". And if they don't know, they will find out.
Heck, even the german car newspapers apparently would not really attack german cars on a serious level. At lest I head of a case, where a reporter from Auto Bild was on a test drive for a shiny new car model - and some shiny new feature did not work. What they did, was not report it, but secretly worked out, how to conceal that in the reporting. (no sources avaiable, heard it from people in the industry)
I would have thought the federal government should be taking the lead in regulating a car manufacturer. It's not like their cars will be limited to use in one state.
Please correct me if I'm wrong, but from what I understand the fraud was aimed at US [particularly Californian] emissions regulations but not German/EU emissions regulations, which differed in such a way that cheating wasn't necessary for those engines to pass. The American emissions regulations were more concerned with nitrogen oxides than the EU regulations which emphasized fuel efficiency; Volkswagen found they couldn't satisfy both at the same time (or would make less money if they did?) so they chose to make efficient engines that produced a lot of nitrogen oxides, then use cheat software to evade the nitrogen oxide regulations in America.
If my understanding of that is correct, it doesn't surprise me that German authorities weren't very proactive about a German company defrauding the American government. It obviously disappoints me, but it doesn't surprise me.
SEC is garbage every where. I found a foreclosed property that was lost due from a reverse mortgage and the lender wasn't in a hurry to sell for fair market value. I dove in and found out that this company is taking poor performing reversed mortgage properties that are at risk of foreclosure and packaging it as a securitized debt and selling to Wallstreet. Pretty much stamped AAA+ by Moody's filed by SEC, same ol crap from 2008 is still happening, and the house can't even sell for how much they loaned out. Depending on any govt agency to protect us is just dreams, dig into the data yourself and figure it out. Lots of people noticed issues with Wirecard, you can do the same for any US company just learn to read their 10K filings, they might lie but it's often a good start.
Not saying that your example isn't a valid critique, but shouldn't you weigh the number of problematic cases against the number in which the SEC functions well?
Moreover, certain parties would benefit from the SEC being starved of resources due to people not trusting governments in general anymore. Its a strategy that has paid out in the US in many instances.
Wouldn’t most countries experience this reality? Upper limit on members of a parliament is probably a couple of hundred, and lobbyists would almost always outnumber them.
I didn't say it's just in Germany like this. But espacially the Car Manufacturers are almost invincible in Germany. Their "Punishment" for the emissions scandal was a government funded exchange programm combined with buy bonus from the Goverment. Basicly they got a boost in sales for their misconduct.
Well in their defense the rest of the world was pretty harsh for them and to let the ship sink was not an option. I think if you're being blunt about the car emissions scandal one could say that each manufacturer got a hand held above their head from the country of origin. E.g. America gave GM a pass.
Also, some people praise the German government for being able to manage an economic powerhouse, but hey, if you keep your currency relatively low to others (by having them all pegged, or even better, replaced with a single currency), of course your production costs stay cheap. But at what cost to your neighbors?
Not only is your comment completely unrelated to the issue at hand, but your references are as well.
The slightly one-sided (who would've guessed from UK publication) Guardian article simply ignores the internal issues that the southern European countries have carried around for decades and doesn't even mention the success of the Baltic states (I wonder why).
The NYT article, aside from being 9 years old and written in the context of the aftermath of the 2008 financial crisis, didn't age well either - especially regarding its prime subject Ireland...
Most of the comments here are about German government corruption and incompetence.
The articles maybe old but the facts still haven't changed; the Euro was a bad thing (yeah, yeah, citation needed).
I disagree with your insinuation that a UK publication must be against the Euro (such a cheap conclusion!), the Guardian does lean towards the left, but it is also a pro EU.
> Most of the comments here are about German government corruption and incompetence.
Yet neither is addressed by the articles you linked.
If illustrating corruption or incompetence was your intend, then you simply missed the mark with those articles.
There's suitable, prominent and recent examples for both, but "Euro bad" definitely isn't one of them.
People praise the government for the stable economy, attributing this to competence. The truth is (in many economists' opinion) the stable economy is because of the bad construct pegging the European currencies, probably not because of good governance.
Sorry I can't provide you with proper up-to-date citations, but you declaring "that's not the case" does not make it the case. Well, me declaring "that is the case" does not make it the case either.
If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insanely corrupt the German government and their corporate buddies are.
Sure, it's not like Russia or the CCP and you're not in danger of being suicided if you uncover some high level dirt but nobody really ever gets punished when obvious corruption gets proven so I have no idea how they always manage to looks so good in the corruption statistics.
[1] https://www.spiegel.de/netzwelt/web/deutschland-warum-unsere...