German election: Is SPD Vice Chancellor Olaf Scholz facing a smear campaign?

Monday morning will see a closed-door meeting of the Bundestag Finance Committee. That’s what is listed in the diary of the German parliament for this coming week. On the agenda: A “conversation” with Finance Minister and the Social Democrat (SPD) top candidate for the federal election, Olaf Scholz.

The committee is due to discuss what was behind the police raid on the SPD-led ministries of finance and justice which took place on September 9.

The opposition Free Democrats (FDP), Left and Green parties requested the meeting. But the Christian Democrats (CDU) led by Chancellor Angela Merkel, and their Bavarian sister party the Christian Social Union (CSU) who are currently in a governing grand coalition with the SPD, seemed only too glad to accept.  

The Finance Ministry in Berlin was raided on September 9

A raid and its interpretation

It is a politically explosive story that is playing out on many different levels. On the surface, it is about investigations by public prosecutors in the city of Osnabrück into the Cologne-based Financial Intelligence Unit (FIU), which is responsible for investigating money laundering and the financing of terrorism. The FIU has regularly failed at its task because it is poorly positioned in terms of personnel and organization. The FIU caseload has significantly increased in recent years. In 2020, the FIU received 144,000 reports of suspicious financial transactions from banks — it only forwarded 17% of them on to police or public prosecutors.

The FIU is a branch of the customs authority, which is part of the Finance Ministry. As Finance Minister, Scholz is the legal supervisor for the FIU, meaning it is his responsibility to ensure that the FIU is working as the law says it should. Operationally, however, the unit acts independently of the ministry.

The Osnabrück prosecutors have been investigating employees of the FIU for obstruction of justice since February 2020. The probe was sparked by a report from an Osnabrück bank that noticed money transfers to locations in Africa totaling 1.7 million euros ($2 million) which the bank suspected could be linked to terrorism financing. The bank reported its suspicion to the FIU, but the FIU did not forward the matter to the relevant investigative authorities.

So far, investigators have not been able to identify specific suspects. The intention of the raid earlier this month was to secure emails between the FIU and the finance ministry, to obtain the names of the responsible people in the FIU. This is also stated in the search warrant.

However, when the raid was conducted the Osnabrück public prosecutor’s office issued a press release that gave the impression that Olaf Scholz was also being investigated. According to the media statement, the goal of the raids was to further clarify a suspected criminal offense and in particular individual responsibilities, and further: “Among other things, it will be investigated whether and, if so, to what extent the management, as well as those responsible for the ministries, as well as superior departments, were involved in the decisions of the FIU.”

SPD co-chair Saskia Esken has criticized the raid on the Finance Ministry in Berlin ‘inappropriate’

Was the raid politically motivated?

For the SPD, the matter is clear. The party assumes the raid is part of a conspiracy and accuses the CDU of a political smear campaign ahead of the general election, in which opinion polls see Olaf Scholz ahead of his conservative rival, Armin Laschet.

They point to the fact that the head of the Osnabrück public prosecutor’s office was once a CDU-chairperson in a town in Lower Saxony and office manager of the CDU-run justice ministry in Lower Saxony at the time. This person remains active in politics today, as a vice president in Lower Saxony’s state parliament.

To make the discrepancy between the judge-ordered search warrant and the press release clear, Scholz’s state secretary of finance Wolfgang Schmidt posted part of the warrant on Twitter. However, this is not legally permissible and now Schmidt is being investigated for this. His tweet has been deleted from the platform.

SPD co-chair Saskia Esken has defended Schmidt. Publishing the warrant was “necessary because the press release by the public prosecutor was grossly negligent,” she said in a radio interview. The investigations were not directed against Finance Minister Olaf Scholz, she said and argued that the press release had created a “false impression.”

Esken criticized the raid as “inappropriate.” Several media and legal experts are of the opinion that the public prosecutor’s approach was not proportionate to the matter. The prosecutors could have also obtained the information they sought by phone or online, according to critics.

That opinion is also widely shared on social media. Heated discussions are taking place under the hashtag #CDUgate suggesting the raid could backfire on the CDU — instead of damaging Scholz and the SPD — if it turns out that it’s timing close to the election was more than coincidental.

Showdown in the finance committee?

But that would likely be difficult to prove and it will not be an immediate issue in the Finance Committee meeting on Monday.

Far more, the lawmakers want to hear from Olaf Scholz what he knew about the shortcomings in the FIU. That matter already played a central role in the Wirecard scandal investigations earlier this year, during which Scholz and Merkel came under significant scrutiny.”Scholz does not have his portfolio under control,” was the judgment of committee member Florian Toncar from the pro-free market Free Democrat party (FDP), “embarrassing for someone who wants to become chancellor.”

The questioning Scholz will face on Monday will be uncomfortable at the very least. It also interrupts his election campaign tour. Scholz initially tried to prevent this. He told the committee he was traveling in southern Germany and could therefore only be available via video conference. But the parliamentarians on the committee were not keen to go along with this.

Scholz could be forced to appear in person if the finance committee summons him on Monday. In that case, the session would be adjourned and Scholz would be forced to travel to Berlin — with haste.

This article was translated from German.

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Article source: https://www.dw.com/en/german-election-is-spd-vice-chancellor-olaf-scholz-facing-a-smear-campaign/a-59231801?maca=en-rss-en-ger-1023-xml-atom