Documents show for the first time: This is how German companies bribe abroad

Created: 03/10/2022Updated: 03/10/2022, 07:00

By: Marcus Engert

Bribery abroad remains an invisible crime in Germany.

© Photo: Volker Hartmann / Graphics: Philipp Priess / Collage: Marcus Engert

Previously unknown documents show where German companies bribe abroad, how rarely they are punished for it and why German investigators almost always have to capitulate.

In most cases, Germans who bribe abroad are not punished for it.

If they do, they almost always get away with a manageable fine.

This is the result of an extensive evaluation of previously unpublished documents from the federal government that are available to Ippen Investigativ.

The documents are reports on more than 80 proceedings by German public prosecutors dealing with corruption abroad.

Germany reports annually to the OECD (Organization for Economic Cooperation and Development).

Together with Correctiv and WELT, Ippen Investigativ evaluated these reports for the years 2015 to 2020.

• The result is sobering:

• In 55 out of 85 proceedings, the investigations were dropped in whole or in part – the majority of them due to the statute of limitations.

• Only one suspect has so far been sentenced to imprisonment without parole.

• Increasingly, investigative authorities discontinue proceedings against conditions, impose fines or meet.

• agreements with the accused.

  Public criminal proceedings thus become the exception.

• Individual people are almost always punished – the companies in the background almost never.

• Prominent proceedings such as the corruption investigations against eight employees of a weapons manufacturer were also discontinued due to the statute of limitations, among other things.

  Mexican authorities had not responded adequately to requests for legal assistance for years.

The reports exist because Germany, like the other member states of the OECD, has acceded to the "Convention against the Bribery of Foreign Public Officials".

It is thus obliged to report to the OECD once a year on the cases of foreign bribery that German public prosecutors have pursued.

But a look at these reports shows that Germany has not taken the matter particularly seriously in recent years.

A tougher approach could definitely be worthwhile here: Fines and confiscated assets totaled around 200 million euros for the 85 cases that Ippen was able to evaluate investigatively alone.

Foreign bribery - an invisible crime

All of this happens without a court hearing.

Because fines are negotiated between the prosecutors and the accused, the public usually does not find out about them.

Foreign bribery is and will remain an invisible crime.

Prof. Elisa Hoven has been researching foreign bribery for years.

© Maya Claussen

There is a lot to report here, as a look at the OECD files shows.

For example, from the former Airbus manager, who is said to have helped make 114 million euros disappear from the EADS armaments company.

The public will still not find out whether they were used to persuade officials in Austria to buy 18 Eurofighter fighter jets: Airbus had agreed with the investigators on a fine of more than 81 million euros.

And the accused manager accepted a 10-month suspended sentence for embezzlement.

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No process.

No Enlightenment.

And not an isolated case.

"The entire criminal process is shifting away from the judicial taking of evidence and into the preliminary proceedings," says Elisa Hoven.

The professor of criminal law has been researching foreign bribery for years and sees this shift as a threat to the principle of openness in the judiciary: "If public prosecutors agree on a fine with the accused and then prefer to stop, these proceedings become invisible - and foreign corruption is not perceived as a widespread problem .

That's a problem."

Privacy comes first

This is also due to the fact that the authorities only give out very little information.

The German authorities have already received a rebuke for this from the OECD: After the last visit of the responsible working group in Berlin in 2018, the organization published a report - and it did not spare criticism of Germany.

The fact that Germany only presents its cases in strictly anonymous form is not only a problem for the public, it has also made the work of the OECD team in Germany "a real challenge".

Germany vowed improvement and began to provide better statistics.

But certain information has not been made transparent to this day - among other things because "naming the companies concerned could lead to the identification of natural persons involved in the case," said a spokeswoman for the Federal Ministry of Justice on request.

This sometimes creates bizarre situations, as in the case of ABB AG, which builds power plants worldwide and also has a subsidiary in Germany.

Although it has long been public knowledge that ABB is involved in a corruption scandal involving the huge Kusile power plant belonging to the South African energy company ESKOM and has therefore even paid more than 100 million US dollars to the South Africans, the OECD reports tamper with it.

The files show that ABB reported itself.

The available reports now show: Not only are German prosecutors investigating eight suspects - the investigations were also significantly expanded between 2019 and 2020, with searches in Switzerland, requests for bank documents from the USA and South Africa and telecommunications surveillance in Germany.

German prosecutors are playing against time

The files also show how often the investigators have to play against time.

Some cases come up again and again for years - and in the end have to be closed: "Investigations into foreign bribery are lengthy and usually require requests for mutual legal assistance, which are treated very differently.

Some quickly, others slowly, some not at all,” says Angela Reitmaier of Transparency International.

"In some cases, tax evasion can still be prosecuted when foreign bribery is statute-barred, but a longer statute of limitations would help." 

This was also the case for investigators in Stuttgart who were investigating a weapons manufacturer.

Employees are said to have bribed the sale of firearms to Mexico.

According to the files, the investigators had made a request for legal assistance to Mexico for the first time in 2015.

That came back.

In 2017 they tried again.

The answers came only incomplete.

In 2018 they asked again, again only received part of the requested information, in 2019 the same game.

At some point, seven of the eight suspects in the file say: "The investigation had to be stopped because the statute of limitations on prosecution had expired." This was not known until now.

Bribery has reached the “renewables”.

The files also show that not only is there hardly an industry in which German companies do not bribe – money also flows with the spirit of the times.

The judicial reports contain two cases in which German companies abroad bribed them to be allowed to build wind turbines.

In the first case, 230,000 euros are said to have flowed to civil servants in 2008.

In 2017, public prosecutors in Berlin began investigating.

2020 will be discontinued due to the statute of limitations.

The second case involves amounts in the millions and an entrepreneur from Bavaria: He is convicted, but not for bribery, but only because he paid too few taxes as a result of the payments.

Also, not an isolated case.

Elisa Hoven, who herself has researched foreign bribery for a long time, speaks of a "clear tendency of the judiciary to switch to alternative facts".

Often those who bribed would be punished for disloyalty to their own company.

“Dogmatically correct, because the company was deprived of funds that were used for bribery.

But criminologically that's completely wrong," said Hoven in an interview with Ippen Investigativ.

After all, people would bribe in order to get orders for the company.

“That makes foreign bribery invisible.

The real wrong is that there was bribery abroad.”

This also ended two cases in which German companies bribed employees of the state forest administration in Ukraine.

It was about permits to cut down forests there.

The Ukrainian authorities had requested legal assistance in all German federal states.

In Hesse and Brandenburg they found what they were looking for and began investigations.

Again, the cases did not end up in court, but were dropped.

Although a total of more than one million euros flowed, the investigators in Hesse came to the conclusion that the bribery could not be proven - and in Brandenburg the court discontinued the proceedings against payment requirements in 2020.

From the exceptional case to the all-purpose weapon

The method of choice here is Section 153a of the Code of Criminal Procedure.

It offers the possibility of terminating criminal proceedings against a payment of money.

When it was introduced in 1974, the aim of the legislature was to give prosecutors a tool to deal with minor crimes quickly and effectively.

In the meantime it has mutated into a kind of all-purpose weapon of the German judiciary - also in the area of ​​foreign bribery.

According to the latest OECD report, more than 80% of foreign bribery cases have been so terminated.

One problem, says Angela Reitmaier from Transparency International: "Only those sanctions that are known to the public can have a deterrent effect." If a main hearing takes place in proceedings for foreign bribery, it is public.

The press often reports about it, especially the local ones.

If people are hired against monetary conditions, that doesn't happen - the question of guilt or innocence would more and more often not be answered at all.

Bavaria leads the statistics - four countries have not reported a single case

Even if money requirements are not a major deterrent anyway: if you live in Rhineland-Palatinate, Mecklenburg-Western Pomerania, Saxony-Anhalt or Saarland, you obviously have even better chances of getting off scot-free.

According to the evaluation, the federal states pursue cases of foreign corruption with different degrees of severity.

- With 23 cases, Bavaria leads the statistics of the cases evaluated by Ippen Investigativ, followed by Hesse with 15 and Baden-Württemberg with twelve cases.

– However, North Rhine-Westphalia, a state with a large export economy, only pursued four cases from 2015 to 2020.

- Small Bremen stands out with eight cases, most of them from the armaments sector - neighboring Lower Saxony, also a large armaments location, reported only two cases.

– Rhineland-Palatinate, Mecklenburg-Western Pomerania, Saxony-Anhalt and Saarland have not prosecuted a single case of foreign corruption since 2015. 

The OECD criticizes that the different economic power of the federal states alone cannot explain this imbalance.

For the past year, the organization has been explicitly demanding more transparency in closed cases of foreign corruption.

The federal government is currently examining possible measures to achieve a uniform approach in the public prosecutor's offices in all federal states, explained a spokeswoman for the Ministry of Justice on request - these could be training courses by more experienced public prosecutors from other federal states or more exchange of experience among the public prosecutor's offices.

"When it comes to murder, I know exactly why I'm investigating.

I'm not so clear about bribery."

Criminal lawyer Prof. Elisa Hoven on an attitude that she observed in some public prosecutor's offices in her research.

In addition, there may be another point that Elisa Hoven came across in her research: that not everyone in the public prosecutor's office is convinced that they are prosecuting injustice.

"When it comes to murder, I know exactly why I'm investigating.

I'm not so clear about bribery.

It creates jobs for the German economy and you often have to do that abroad,” Hoven describes what he heard.

Hoven says that even the skeptical officials would enforce the law.

But possibly with less vigor than in other cases: “The management of the authorities also sets the tone.

It is always a question of capacities and resources, but also of setting priorities.”

Public prosecutors usually investigate because something was pointed out to them from abroad or because something odd came up during a tax audit.

Insiders who really know something and who report it to the authorities are the absolute exception - also because "clear and comprehensive protective measures for whistleblowers" are still missing, the OECD criticizes in its most recent report.

And so the files now evaluated by Ippen Investigative and its partners also show how large the number of unreported cases is in the area of ​​foreign bribery.

After Ippen Investigativ and its partners had applied for the reports under the Freedom of Information Act, the Federal Ministry of Justice granted this application and published the reports.

Apparently not all federal states were happy about this.

There was a "hooliganism" in the background, was heard from one of the countries.

They didn't think it was a good thing that the federal government was issuing the reports, because "that's our data."

So it remains questionable whether politicians will provide the public prosecutor's offices with more staff in the coming years, take back money that was wrongfully earned and prosecute the criminal offense of foreign corruption more harshly - or at least ensure more transparency.

According to the picture drawn by the evaluation, there are doubts that both could happen in the short term.

Also because practice that has been ingrained for decades can only be changed slowly - as a case from Lower Saxony shows:

Public prosecutors there began investigating in 2013 – and discontinued the proceedings in 2015.

The reason: the accused stated that they had not bribed anyone with the payments.

They only wanted to persuade officials abroad to do their jobs, the statement said.

"This could not be refuted," says the report.

And so it was set.

After all, anyone who only wants to motivate foreign officials with their payments to do the job they would do anyway, without someone else suffering a disadvantage as a result, is not bribing – but only paying “facilitation payments to foreign officials”.

And they are perfectly legal under German law.

What are the OECD files?

For a long time it was perfectly legal in Germany to lubricate abroad - the costs for this could even be deducted from taxes for many years.

This has changed since 1990 – and in 1999 the “OECD Convention Against Bribery of Foreign Public Officials in International Business Transactions” came into force, to which Germany has also joined.

Since then, Germany has reported annually to the OECD on how well – or badly – ​​the prosecution of foreign corruption is going in this country.

The public prosecutor's offices report annually to the state ministries of justice, and those to the federal government, from where a collective report is then sent to the OECD.

With applications under the Freedom of Information Act, Ippen Investigativ and Correctiv have received reports from the last six years and evaluated them together with WELT.

Hamburg, Thuringia and Rhineland-Palatinate have rejected applications.

Hesse sent pages that were almost completely blacked out.

Bavaria, Lower Saxony and Saxony still have no freedom of information laws.

The new evaluation shows that since most cases are dropped and those that are prosecuted are often not publicly known or are ended by an agreement between the public prosecutor's office and the accused, the dark field of German corruption abroad is large.

In other words: There is significantly more bribery from Germany abroad than assumed.

The research team publishes all annual reports in full here.

Many of the procedures therein are still ongoing today.

Ippen Investigativ continues to research corruption and fraud - help us!

Ippen Investigativ is the research team of the Ippen publishing group - and continues to research the topic.

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