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The Institute for Ethics and Economic
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VW CORRUPTION SCANDAL HAS SPREAD. VW chairman, Bernd
Pischetsrieder, acknowledged to Stern magazine on Thursday that a corruption
scandal that has rocked
Real estate corruption
scandal widens in Germany. A real estate scandal in Frankfurt, in
which big bribes changed hands between bankers, architects and estate agents,
appears to be taking on national dimensions. According to prosecutors, they
were investigating more than 40 people in Deutsche Bank chief
cleared of corruption. It was reported that a court in Dusseldorf
acquitted Josef Ackermann, the Deutsche Bank chief executive, Klaus Esser,
Mannesmann's former chief executive, and four other co-defendants from the Mannesmann
board, of illegally approving bonus payments worth $74m (pounds 40m) to
company executives after the $180bn takeover three years ago. The ruling, however, provoked furious
criticism from senior government figures. Wolfgang Thierse, the country’s
Social Democrat Parliamentary President, said that "The self-service
mentality of Mannesmann’s executives is by no means justified simply because
they cannot be pursued by the courts. Their behaviour was plainly
indecent." (The Independent,
GERMAN'S FIRM GUILTY OF LESOTHO BRIBERY Following the Canadian company Acres International's conviction which forced the company to pay price for bribing high-ranking officials in Lesotho, the international engineering company Lahmeyer of Germany recently was found guilty on giving bribes to Masapha Sole, former chief executive of the Lesotho highlands water projects, who was sentenced to 15 years in jail last year for taking grafts. (The Guardian 19 Jun 2003, summary by Hanh Vu).
TWO PROMINENT PARTY FIGURES ARRESTED IN CORRUPTION CASE.
It was reported that two former officials in
Düsseldorf, KEY FIGURE REVEALS NAMES. Norbert Rüther is the former leader of the Cologne branch of the Social Democratic Party. Mr. Rüther and the Cologne party's former treasurer, Manfred Biciste, have found themselves in the middle of a serious donations-scandal. According to party officials, Mr. Rüther has revealed to his party the origin of the DM 830,000 ($375,000) in donations. He has provided the names of nine donors, which will be made public as soon as the prosecutor's permission is given. According to the newspaper Kölner Stadt-Anzeiger, some of the undeclared donations were channeled into secret accounts that were later used to finance the election campaign of Klaus Heugel. Mr. Heugel was forced to quit as a candidate amid charges of insider trading on the stock market. (Frankfurter Allgemeine Zeitung, 21 March, 2002, summary by Pavlidis George).
THYSSEN TO DISCLOSE ITS DIRECTORS’ SALARIES Gerhard Cromme, supervisory board head of Thyssen Krupp, the steel group, announced his firm will be the first nationally to disclosure directors’ salaries in its upcoming annual report. He further stated that transparency with salaries will make obvious that German top manager’s salaries are below international standards. BASF and BMW have shown little enthusiasm to follow Thyssen Krupp’s lead. (FT, Jan. 31, 2002, summary by Marg Reynolds).
Berlin/ Paris, NO
PROOF OF BRIBES TO CDU, COMMITTEE MEMBERS SAY. The German parliamentary
committee of investigation will soon release its report into the Christian
Democratic Union (CDU) fund scandal. According to some members of the
parliamentary committee, there is no proof of allegations that bribes were
paid to CDU representatives. The committee chairman, Volker Neumann,
questioned former Elf-Aquitaine oil company executive Alfred Sirven in a
Paris prison, but Mr. Sirven denied any knowledge of bribery allegations.
According to a Free Democrat on the committee, the former judge Max Stadler,
this development means that the committee could "not prove the
allegations with the means it has at its disposal." ( Frankfurter
Allgemeine Zeitung - english edition, January 16, 2002, summary by Pavlidis
George). FORMER CHANCELLOR HELMUT KOHL REFUSES TO DIVULGE DETAILS OF DONORS OF THE CASH SCANDAL Former chancellor Helmut Kohl who was disgraced in a cash scandal in 1999, which also plunged his party, Christian Democrats, into crisis has yet again refused to divulge the names of the donors from whom he had received over $1 million in illegal campaign donations. Whilst he had admitted in 1999 to have broken party funding rules in accepting cash from donors, he had subsequently, in February, accepted an offer by the public prosecutors to drop the fraud charges against him in return for a fine. The enquiry arose again as part of the investigations by a parliamentary committee established by the Government, and Kohl has denounced the same as an attempt to discredit his successful tenure, whilst staying firm in his decision to not reveal the names of the donors, as a point of honour. (Reuters, December 13, 2001, summary by Aruna Balakrishnan). SOCCER
COACH CHRISTOPH DAUM'S DEFENSE SUSPECTED OF ATTEMPTED BRIBERY. Christoph
Daum, 48, soccer coach, is currently on trial for allegedly buying cocaine
and inciting others to deal in the drug. Now, his defense lawyers are
suspected of trying to bribe a witness in the case. This allegation was made
by a spokesman for the regional court. The witness Franz Robens was allegedly
offered DM2 million ($900,000) and was asked, in return, to withdraw a
previous testimony and leave the country for the duration of the trial. The
prosecutor requested that Mr. Daum be assigned a court-appointed attorney
until the bribery allegations were clarified. Rolf Stankewitz, one of Mr.
Daum's lawyers, has called the charges "outrageous" (Source:
Frankfurter Allgemeine Zeitung, November 14, 2001, summary by Pavlidis
George).
NO CORRUPTION IN FORMER CHANCELLOR’S PARTY , After Karlsruhe federal prosecutors requested evidence earlier this the sale of an east German oil refinery in 1992, a Swiss investigation of a business deal linked to a scandal implicating former Chancellor Helmut Kohl shows no evidence that bribes flowed to his party, the Christian Democrats or their representatives. The suspicion of the Swiss and French prosecutors is that France’s Elf-Aquitaine paid bribes during the takeover of the Leuna refinery. Parliament is still exploring whether decisions made by Kohl’s government were bought during his years in power. (Reuters, July 28, 2001, summary by Kelli Johnston).
BERLIN CITY-STATE CRISIS ‘THE SAD EMBLEM OF POLITICAL CORRUPTION, MEGALOMANIA AND INCOMPETENCE’ The ten-year-old ‘grand coalition’ of Christian Democrats and Social Democrats has collapsed under a $30 billion mountain of debt, due in part to its lack of Cold War subsidies, its costly divisions, its bloated public sector, and the myriad duplication of services. The autumn elections are seen as a critical test ahead of next year'’ national elections and the financial crisis will not be solved with the politics of the past. A system of wealth sharing between richer and poorer states has left the city $2 billion poorer annually and if the city’s long-term financial commitments are included, the total debt is presently $60 billion. Klaus Landowsky, Bankgesellschaft Berlin executive, resigned amid corruption allegations of campaign contribution from real estate developers who had defaulted on $300 million in loans. Berlin will be forced, even with federal government financial support, to trim its work force, public works, and cultural institutions. (International Herald Tribune, June 8, 2001, summary by Marg Reynolds).
PARTY HEAD TO BE INVESTIGATED FOR EMBEZZLEMENT Christoph Boer, CDU party head in Rhineland-Palatinate, will be investigated by the Public Prosecutor’s Office in Mainz for alleged illegal fund transfers to the wider party apparatus. (German News, May 30, 2001, summary by Marg Reynolds).
Berlin, GERMAN RAIL JOINS ANTI-CORRUPTION ORGANIZATION.
German Rail AG joined the famous anti-corruption
watchdog Transparency International (TI). The
chairman of German Rail, Mr. Hartmut Mehdorn, said that this event was a
proof
of the company's determination to fight corruption. German Rail has
hired
two external attorneys as Ombudsmen. Thus, the employees and the officials
of the company can contact the Ombudsmen and report suspected cases
of corruption (there have already been received more than 50 hints).
According
to the President of TI-Germany, Mr. Michael Wiehen, independent contact
persons can play an important role in fighting corruption. Mr. Michael
Wiehen urged other enterprises and organizations to follow the example
of German Rail. (Source: TI-Associated Press, February 20, 2001, summary
by Pavlidis George). Munich,
DISCUSSIONS ON STRONGER REGULATIONS FOR ANALYSTS. The Bundeswirtschaftsministerium,
the Ministry of Finance of Germany, is planning
to set up stronger regulations for the analysts, hopefully with the
collaboration
of the German Association for Financial Analysis and Asset Management
(DVFA), the German association of analysts. The officials of the ministry
hope that either a professional Code of Conduct or some federal regulation
could come into force. However, both the Association of Analysts and
the German Banks criticized these plans of the Ministry. (Source:
Sueddeutsche
Zeitung, January 24, 2001, summary by Pavlidis George). MINISTER RESIGNS TAINTED BY CORRUPTION SCANDAL. Transportation Minister Reinhard Klimmt resigned today after a year in office "to make it easier on everyone." Klimmt was fined $12,000 on Monday by a district court in the city of Trier in a case involving his days of leadership in the small state of Saarland. He was earlier found guilty of financial malfeasance for taking $275,000 from a Catholic charity for the soccer club he headed while also being his party's leader in the state parliament. The court judged that the Caritas agency donated to the FC Saarbruecken soccer club probably to shield its hospitals and other state-supported services from budget cuts. On his resignation, Klimmt said that he did not want the ruling Social Democrats tainted by the same kind of corruption scandal that discredited former chancellor Helmut Kohl. (Washington Post, 17 Nov 2000, summary by Debbie Uy).
Trier Reinhard Klimmt, German Transportation Minister, was fined almost $12,000 in a corruption scandal in which he was found guilty of accepting $275,000 for the soccer club he headed. The donation was from the Caritas Agency, a Catholic charity, and likely an attempt to shield its hospitals and other state-supported services from budget cuts. In another case, Chancellor Gerhard Schroeder insisted on former Chancellor Helmut Kohl’s resignation for accepting illegal donations of $1 million. (WP, Nov. 17, 2000, summary by Marg Reynolds)
Reinhard Klimmt was fined $12,000 in fraud case in which he accepted funds from a medical charity to his soccer club. (CNN News, Nov. 16, 2000, summary by Marg Reynolds)
Reinhard Klimmt, former German Transport Minister, is facing charges of abetting fraud, as his pension and other payments have been criticized by the German Taxpayer’s Association. Various short term lump sums together with his Saarland State pension and federal government payments have contributed to this charge.(Frankfurter Allgemeine Zeitung (Reuters), Nov. 17, 2000, summary by Marg Reynolds).
BERLIN - In a blow to Chancellor Gerhard Schroeder's government, the transport minister Reinhard Klimmt has been forced to resign after failing to persuade parliamentary allies that he could stay in office while also challenging a court decision to fine him DM27,000 (E13,800, $11,840) for aiding embezzlement. The charges are related to charity funds Mr. Klimmt accepted to promote a professional soccer team. (Financial Times, Summary by Fabian Camacho, Nov 16, 2000). Corruption On The
Rise Says TI Survey, According to a recent Transparency Survey, which surveys
business people and international investors, says Germany placed 17 of the
worlds least corrupt nations, indicating corruption is increasing. (Bloomburg and Sueddeutsche, September 14, 2000, summary
by Amanda Glatzel). GERMANY: CHRISTIAN DEMOCRAT PARTY (CDU)
TAINTED BY NEW CORRUPTION CLAIM A leading figure in Germany´s Christian
Democrats faced pressure to resign yesterday amid fresh corruption charges
alleging that the opposition party had accepted an illegal £140,000 payment
from big business. Roland Koch, the rightwing prime minister of the central
state of Hesse, was accused in two media reports of accepting the donation
from the German Industry Insurance Association (HDI), which allegedly paid the cash to a political
academy to avoid detection. Another report by Hesse radio accused Mr Koch of
running an illicit bank account to store illegal donations to the party.
Yesterday Mr Koch denied the reports and insisted that the HDI payments to
the Hesse Academy for Political Education had not
been used by the CDU for electioneering or other political purposes. However
an HDI spokesman confirmed that the payment was intended as financial backing
for Mr Koch: "We wanted to support Mr Koch´s work, but we did not want to make unfocused payments into CDU
party accounts," he said. The spokesman denied that the donation was
illegal. In response to the latest in a series of corruption allegations
levelled at Germany´s main conservative party since November, the Social
Democratic (SPD) chancellor, Gerhard Schröder, said: "A fish stinks at the
head. The CDU is dragging its feet in clearing up the mire caused by its
illegal party funding arrangements." Other SPD and Green party
politicans in the government coalition demanded Mr Koch´s immediate
resignation. The allegations appeared certain to accelerate the decline of
the CDU´s popularity. Last year the party elected an east German politican,
Angela Merkel, as leader to try to lessen the damage caused by the corruption scandal surrounding former Chancellor
Helmut Kohl. However, an opinion poll broadcast at the weekend by ZDF
television showed that the CDU was almost 10 percentage points behind the
government coalition. The Guardian, September 4, 2000 http://www.guardianunlimited.co.uk Kohl, former
Chancellor is accused of accepting $520,000 campaign donation from Saudi
Arabia in 1991 export of 36 tanks (NYT, Nov 23, 1999) Kohl’s party reports
more moving of money (NYT, Jan 28, 2000). Kohl faces suit from the party
(NYT, Feb 12, 2000, p. A6). Speaker fines $21 million on Kohl’s party (NYT,
Feb. 16, 2k, p.A5). Embezzlement and fraud at house building society
(Remscheider General Anzeiger, 21.8.00,
http://www.pipeline.de/cgibin/pipeline.fcg?userid=1&publikation= Generous public
spending - study (Berliner Zeitung, 23.8.00,
http://www.BerlinOnline.de/aktuelles/berliner_zeitung/wirtschaft/ KOHL SAYS HE NEVER
BENEFITTED FROM ILLEGAL DONATIONS Former German Chancellor Helmut Kohl said
Sunday that the criminal investigation into the funding scandal that has
tarnished his reputation has established he never profited personally from
illegal donations. ``According to the investigations of the state prosecutors,
I never personally enriched myself with one single mark,´´ Kohl told the Welt
am Sonntag newspaper in an interview. Kohl has seen his once formidable
reputation as the man who reunified Germany crumble since he admitted that he
accepted about $1 million in undeclared -- and thus illegal -- funds for his
conservative Christian Democratic Union (CDU). ``Prosecutors have also not
been able to prove that any of the donations I collected were not used for
the good of the CDU and their related associations,´´ he said. Kohl told the
newspaper that his lawyers had received an initial 91-page legal report from
prosecutors last week in which they said they had sufficient evidence to
charge him for financially harming his party for failing to declare the
funds. The German parliament has fined the CDU 6.5 million marks ($3 million)
for the donations accepted by Kohl, plus a further 41 million marks for money
the party itself admitted concealing. But Kohl noted he had collected around
eight million marks to help cover the fines, with some 700,000 marks coming
out of his own pocket, which he said should more than compensate for the
financial damage he caused the CDU. The former chancellor said his lawyers
doubted he would be prosecuted given the current state of the investigation.
German media reported last month that prosecutors were considering dropping
the probe if Kohl paid a fine of around 200,000 marks. Kohl Still Won’t Name
Donors Kohl, who was chancellor from 1982 to 1998, has continued to defy the
law by refusing to identify his benefactors. Karlheinz Schreiber, an
international businessman whose secret cash payments to CDU officials have
been a key focus of the slush fund scandal, said Sunday that he was not one
of them. ``Kohl has never received money from me,´´ Schreiber told the Bild
am Sonntag newspaper in an interview. Public prosecutors in the southern city
of Augsburg said this week they wanted to haul Schreiber and the former CDU
treasurer before the courts for charges related to the scandal. Schreiber is
currently living in Canada fighting extradition to his native Germany on
separate charges of alleged tax evasion, fraud and bribery. He has denied the
allegations. Schreiber was targeted in a 1995 tax inquiry that eventually led
to the revelations of the funding scandal. It prompted the resignation of CDU
chairman Wolfgang Schaeuble, who admitted receiving 100,000 marks for the
party from Schreiber. The ruling center-left Social Democrats said Sunday
that Kohl should not be allowed to address the 10th anniversary celebration
of the unification of Germany that he oversaw on October 3, 1990 unless he
named the donors. ``Nobody is questioning the historic achievement of Helmut
Kohl,´´ said SPD general secretary Franz Muentefering. ``But if he continues
to remain silent (about the donors), then I don’t want to hear him on October
3.´´ Yahoo News (Reuters), August 6, 2000 http://dailynews.yahoo.com/h/nm/20000806/ts/germany_kohl_dc_1.html Germany/Egypt: Holzmann fined in
bid-rigging case (construction industry) (Engineering News-Record,
28.8.00,http://www.enr.com/news/enrbl253.asp) Headline, 25-AUGUST-2000, Link
may not work after a few days. The OECD anti-Corruption report for this country can be
found at http://www.oecd.org/daf/nocorruption/report.htm
The Index of Economic Freedom
(by Driscoll-Holmes-Kirkpatrick) for 2001 places Germany in the “Mostly Free”
category with a rank of 21 (Ranks range from 1 for Hong Kong to 155 for North
Korea, Wall Street Journal, Nov. 1, 2000). H. D. Vinod’s trimmed correlation
analysis indicates that countries free from economic regulation are less
corrupt. After allowing for some exceptions by 20% trimming, the correlation
is near 0.9 |
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Design:
Theo den Brinker |
Copyright:
Hrishikesh D. Vinod 2000 |
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