FRANKFURT – Germany’s finance minister Olaf Scholz was criticised by lawmakers for bungling oversight of Wirecard, according to a draft report of a public inquiry into Germany’s biggest post-war fraud scandal.
The report by opposition lawmakers, after a months long cross-party investigation, also said that Chancellor Angela Merkel was naive regarding Wirecard’s lobbying efforts.
The criticism echoes lawmakers’ public comments since the start of the inquiry, but the 675-page draft revives the topic just months ahead of a federal election to choose Merkel’s successor. Scholz is among those vying for the office.
“Olaf Scholz as finance minister bears political responsibility for the failure of BaFin,” the report says, referring to the nation’s financial regulator that is part of the ministry.
The finance ministry and chancellery did not immediately respond to requests for comment.
Scholz has denied blame for the failure, and has since revamped BaFin’s powers and installed new leadership.
Wirecard, founded in 1999, began by processing payments for gambling and pornography websites before becoming a fintech star and a member of the DAX bluechip index.
It ended by filing for insolvency in June last year, owing creditors almost $4 billion, after disclosing a 1.9 billion euro hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.
The lawmakers said in their report that the Wirecard fiasco was more than an accounting scandal. It was a “collective oversight failure”, with BaFin, prosecutors, lobbyists and others playing a role.
The report said that Scholz and his ministry with oversight over BaFin sought reasons not to investigate Wirecard as concerns about the company cropped up, rather than take action.
German officials investigated journalists and other critics of the company instead of Wirecard executives, and they helped Wirecard expand in China even as questions arose about its business practices, the report noted.
In the runup to a state visit to China in September 2019, Merkel met with a former German economy minister who lobbied on behalf of Wirecard.
The chancellor proved “too naive” in her interaction with the minister, who “managed to successfully promote to the chancellor a matter in which he had an undisclosed economic interest”, the report said.
Merkel in April rejected criticism of her lobbying for Wirecard in China, telling lawmakers she had no reason to suspect the firm of criminality as she sought to help it do business there.