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Is it corruption? German finance minister under scrutiny
Sabine Kinkartz
January 10, 2023
After it emerged that Germany's finance minister got a generous line of credit from a bank shortly after speaking at its event, questions are being raised about whether the country's corruption laws are too lenient.
Did Christian Lindner get a private loan worth millions only — or even in part — because he promoted a certain bank as Germany's finance minister? That would be a clear case of corruption for the leader of the business-oriented, neoliberal Free Democrats (FDP), the smallest party in the center-left coalition government with the Social Democrats (SPD) and the Greens.
The incident has not gone unnoticed by Berlin public prosecutors.
Though the Karlsruhe-based BBBank is a rather small institution, Lindner managed to procure a massive loan from the bank to facilitate the purchase of a villa in Berlin's leafy Nikolassee district.
Despite having a private business relationship, Lindner agreed to give an opening speech at the bank's centenary celebrations in his capacity as federal minister of finance in the spring of 2022. The taped speech, broadcast to a large representatives' meeting in Karlsruhe, praised the bank by saying, amongst other things: "To me, BBBank is fundamentally appealing."
At the time, Lindner had already taken out a loan of €2.35 million ($2.5 million) from BBBank. A few weeks after the speech, the bank granted Lindner a further loan of €450,000 ($483,000). What prompted the bank to approve a credit line that was more than 1 million euros higher than the cost of the property?
Christian Lindner has heaped praise on a bank which also gave him two loansImage: Revierfoto/picture allliance/dpa
Longstanding business relationship
Lindner has had a close relationship with BBBank for many years. In 2014, when he was not a sitting lawmaker because the FDP had failed to clear the 5% hurdle to enter the Bundestag, he gave testimonials in advertisements for the bank.
At the same time, Linder was giving talks across the country at events organized by the bank. The fees he procured from these talks are listed on his official website and can range from €7,000 to €15,000 per lecture.
In Germany is not against the law for politicians to be in advertisements, and until 2021 members of the Bundestag were also allowed to give as many paid talks as they wanted. According to a study by the metal trade union's Otto Brenner Foundation, just over a third of lawmakers in the legislative period of 2017 to 2021 received additional income on top of their generous salaries, totaling some €53 million. Of these, Lindner is known to be one of the top earners.
Under review by Berlin prosecutors
Still, Lindner's 2022 speech may have crossed a line. A federal finance minister publicly praising a bank and then being given a generous line of credit afterward raises numerous legal questions.
Christian Lindner was the star and sole focus of the FDP's election campaign in 2021Image: Christoph Hardt/Geisler-Fotopress/picture alliance
A spokeswoman for the Federal Ministry of Finance emphasized that such speeches are "by no means unusual." She did not, however, address the question of whether Lindner had been fully transparent about his private business relationship and cleared his new loan with officials at the ministry.
These are precisely the issues that the anti-corruption team at the Berlin Attorney General's Office is now probing. If the bank extended Lindner an unusually large amount of credit in return for his services, that would constitute a crime. The office is currently determining whether they should launch an official corruption investigation. There is one major hurdle to this though — they would have to apply to the Bundestag to life Lindner's parliamentary immunity.
Linder denies wrongdoing
Some opposition members in the Bundestag have already called for Lindner's resignation. The deputy leader of the post-communist Left Party Lorenz Gösta Beutin told Der Spiegel magazine that there are indications that Lindner "may not be able to clearly distinguish" between his job as minister and his private interests. "Should the suspicion be substantiated and criminal proceedings ensue, the finance minister's resignation would be inevitable," he said.
For his part, Lindner has rejected the accusations. Through his lawyer, he has said that his private real estate financing with BBBank began long before he became a Cabinet minister and that any apparent irregularities in amounts of credit are to do with the massive fluctuations of the real estate market. He has also said that it is not a crime for a sitting minister to record a video greeting for a bank meeting.
Germany ranks in tenth spot in the corruption perception index
Loopholes in corruption laws
The term "corruption" is not actually found in the German Criminal Code. The law makes a distinction between two crimes: "accepting an advantage" in the course of carrying out official duties, and bribery. For the latter, even expressing the willingness to accept a bribe is a crime.
Anti-corruption organization Transparency Germany welcomed the news that prosecutors were reviewing the accusations. "The rule of law must also apply, and indeed, in an especially critical way, to a federal minister," the group's lawyer Wolfgang Jäckle told the Funke media group.
Germany currently ranks 10th in the Corruption Perceptions Index, a ranking of 180 countries worldwide published annually by Transparency International since 1995. The top countries in the current ranking are Denmark, Finland, and New Zealand. Bringing up the rear are Somalia, Syria, and South Sudan.
The 10th-place ranking may look good, but this ranking has not improved for six years. This is perhaps due to the fact that Germany's anti-corruption legislation contained major loopholes until recently, such as with the case of collecting unlimited speaking fees.
As for gifts, every public servant — from school teachers to the German president — may not accept gifts worth more than €10. Indeed, when in 2006 police officers accepted a carton of grapes from a truck driver they had pulled over at a traffic stop, they were convicted of "accepting an advantage."
02:31
Judge urges Bundestag to tighten laws
In 2012, it emerged that Germany's then-President Christian Wulff had gone on several vacations paid for by wealthy friends and acquaintances. Wulff was later acquitted, but he had already resigned from his post over the accusations and his political career never recovered.
There are also special rules that apply to members of the Bundestag, like Lindner. These rules came into particularly sharp focus in 2020. At the time, several high-profile members of the Christian Democrats (CDU), at the time ruling in coalition with the SPD, were accused of cronyism after journalists discovered that contracts to produce medical masks to combat the COVID-19 pandemic had been given to relatives and other close contacts.
In the most egregious case, an entrepreneur paid some €10 million to two CSU lawmakers to facilitate the sale of masks to the federal government that he had purchased for cheap in Asia. When a judge reviewed the case, he found that the lawmakers had accepted an advantage, but not met Germany's legal definition of bribery. He urged the federal government to tighten loopholes in the legislation.
The current coalition in Berlin has promised to do exactly that. However, no draft law has yet been presented.
This article was originally written in German.
