Klassenjustiz

Class-based justice.

On 01 Aug 2014 the Süddeutsche Zeitung’s Klaus Ott reported that it looked like Bernie Ecclestone had successfully negotiated a deal with a Munich court to pay $100 million to make his bribery trial go away.

One indication the court would accept the settlement, the largest ever in Germany, is that after the Friday, 01 Aug 2014, meeting with Mr. Ecclestone the court “uninvited” Tuesday’s witnesses.

If the Munich court accepts the deal, Mr. Ecclestone could continue as boss of Formula One racing. Secrecy was one of the deal’s conditions.

Mr. Ecclestone is on trial for bribing a manager of the Bavarian Landesbank BayernLB with $44 million eight years ago to cheat BayernLB in Mr. Ecclestone’s interest. They used fake invoices and letterbox companies to pay the bribe, and then with the manager’s help Mr. Ecclestone was able to negotiate almost the full bribe out of BayernLB. Mr. Ecclestone’s defense at the Munich trial was that it wasn’t a bribe but blackmail.

(CLOSS en yoos TEETS.)

Wichtige Informationen verschwiegen

Maintained silence about important information.

In the numerous court trials dealing with deeds done during the running of the Bavarian state bank BayernLB and during the running of the Carinthian state bank Hypo Alpe Adria, and deeds done during BayernLB’s purchase of Hypo Alpe Adria and the country of Austria’s subsequent buying it back for $1, there have been many accusations about improper sharing of important relevant information at key moments.

09 Apr 2014: Jail sentences will be appealed for Hypo Alpe Adria’s former manager Tilo Berlin (2 years), management board member Josef Kircher (3 years), bank head Wolfgang Kulterer (another year), and management board member Siegfried Grigg (3.5 years), for making improper secret side agreements with investors. The Hypo managers did not tell BayernLB that they’d tried to raise capital by selling preferred stock [Vorzugsaktien] with a put option guaranteeing the bank would buy back the stock at any time; i.i.u.c. Hypo’s balance sheet at the time BayernLB bought it described these shares as >100 million euros of Eigenkapital when they should have been classed as Fremdkapital, equity capital when they were in fact debt capital. BayernLB is saying this means the balance sheet and core capital data they were given before the 2007 sale weren’t accurate.

Now that several top managers have been found guilty of selling the bank with an inaccurate sales brochure, the Bavarian Landesbank is suing one of the smaller major shareholders in Hypo Alpe Adria at the time, a group of shareholding Hypo employees, for selling their stock to BayernLB while the brochure was wrong. If the Landesbank wins that lawsuit they can go on to sue the larger major shareholders who owned the bank then, such as the state of Carinthia.

07 May 2014: Former Hypo manager Tilo Berlin thinks BayernLB disguised their true intentions to him in 2008 and has filed charges against the BayernLB bankers and politicians who were running the Landesbank then; prosecutors in Carinthia and Bavaria are investigating his allegations of “serious fraud and suspected fraudulent acquisition of nonvoting share capital” [schweren Betrugs sowie des Verdachts des betrügerischen Erlangens von Partizipationskapital]. After buying Hypo Alpe Adria in 2007, the Austrians are saying, in 2008 the Bavarians tricked them into handing over 900 million euros in Austrian taxpayer-funded aid by pretending BayernLB would keep the troubled Hypo Alpe Adria when they were already planning to get rid of it. BayernLB bought Hypo Alpe Adria in 2007, knew already in 2008 that they’d made a big mistake, and got Austria to take it in 2009; in 2013 the long process for winding it down as a bad bank began.

07 May 2014: In addition to the above, concluded this Spiegel article, the game’s afoot with regard to Hypo Alpe Adria. But Spiegel provided no details.

“Furthermore, the bank was involved in criminal machinations, which Austrian investigators are processing in one of the biggest crime cases in the Alpine republic’s history.”

(VIH chh tigga   in foam ats YONE   fair SHVEEG en.)

Schweigegeld oder Schmiergeld?

“Silence money or shmear money”; blackmail or bribery?

How do you show that a quiet illicit payment was corruption and not extortion?

The Bavarian Landesbank BayernLB came into some unexpected Formula One stock (through a series of events after a Deutsche Bank manager said things in a television interview that led to the end of Leo Kirch’s ability to get more loans and the subsequent implosion of the Kirch media empire). One of BayernLB’s managers started asking questions, in Germany and England, to learn about how Formula One was run in order to learn how much his bank’s new stock was worth. He found the racing empire curiously opaque. He found Bernie Ecclestone had a strange veto right, and filed lawsuits to counter it. Then, say prosecutors, Bernie Ecclestone decided to “turn” the diligent bank manager. A 44-million-euro payment was made (disguised as consulting fees and transferred in several installments to accounts in Austria).

The bank manager testified it was a bribe was to obtain BayernLB’s support for the sale of Mr. Kirch’s Formula One shares to a buyer Bernie Ecclestone preferred.

At his trial in Munich, Bernie Ecclestone’s lawyers are saying it was a blackmail payment to buy the bank manager’s silence after he made threats.

(SHVY gah geld   ode ah   SHMEAR geld.)

„Es gibt ein paar tausend Banken in Europa, da kann man nicht alle kennen“

“There’s thousands of banks in Europe and you can’t know all of them”

is how BayernLB supervisory board member and former Bavarian state Economy Minister Erwin Huber (C.S.U.) supposedly explained in his April Fools Day testimony why he gave his approval to purchase the Hypo Alpe Adria yet knew nothing about the Carinthian bank. An S.P.D. politician responded, “Anyone who publicly documents their political inadequacy so authentically is, as the chair of the Economy Committee, a problem.” Mr. Huber has been chairing the Bavarian state parliament’s Economy Committee since October 2013.

Munich prosecutors had said they did not want to prosecute BayernLB’s supervisory board members for approving overpayment of >500 million euros in the purchase deal—plus some bribes that might be easier to prosecute, in separate trials—because the supervisory board was fooled by the dishonest representations of the bank’s management board, the defendants in the current trial. Three high-ranking C.S.U. politicians from the supervisory board have now testified at the management board’s criminal trial and stated that they were satisfied with the information presented to them by the management board in its argument for purchasing the HGAA.

Defendants in the trial of the BayernLB management board include Michael Kemmer, who moved on to become “managing director of the German Bankers’ Association” [Hauptgeschäftsführer des Bankenverbands], “an influential lobbyist.”

At the time BayernLB bought Hypo Alpe Adria, C.S.U. politicians on BayernLB’s supervisory board [Kontrollgremium] such as Bavarian finance minister Kurt Faltlhauser, interior minister Günther Beckstein and economics minister Erwin Huber wanted the Bavarian state bank to expand, into the Balkans. Bavaria’s then-governor Edmund Stoiber (C.S.U.) made a similar statement to journalists while on a visit to Croatia about then, ZDF heute journal reported.

Apparently BayernLB also bought a loss-plagued Hungarian bank that they want to sell.

(Ess   kipped   eye n   pah   t OW! zenned   BONK en   inn   oy ROPE ah,   dah   cannes   mon   nichh t   OLL ah   ken en.)

Grosse Kohlelition

Grand “coal”-alition.

Since the 22 Sep 2013 Bundestag election, Germany’s second-largest political party, the socialist S.P.D., has had a new boss: Sigmar Gabriel. He managed to get his party to agree to form a grosse Koalition with Chancellor Merkel’s largest political party, the conservative C.D.U. (and its Bavarian state branch, the C.S.U.), even though this effectively eliminated opposition from the Bundestag and usually causes the S.P.D. to lose voters after unethical compromises of its core principles. After delivering the S.P.D., via much talk, singing rousing songs and an up-or-down vote on whether to rule, Mr. Gabriel became the deputy chancellor of Germany and took on two cabinet ministries: Economics and Energy. He announced he would “reform” Germany’s switch to renewable energy sources, the awesome Energiewende, to cap government support of solar and wind power because he wanted to reduce electricity prices for consumers. The reporting indicated Mr. Gabriel has no plans to significantly reduce the C.D.U.’s exemptions, “industry privileges,” granted to high-volume electricity-consuming companies, which goes up by about 1000 companies/year and which the E.U. competition authority has said if not stopped or at least better organized may be reason for that authority to kill the Energiewende entirely. In fact, ZDF heute journal correspondent Stefan Leifert said, the new minister has refused to specify which important industries will get which rebates to their contributions to the Energiewende.

Mr. Gabriel’s hand-picked successor as head of the S.P.D. is a representative of coal workers, from the Industriegewerkschaft Bergbau, Chemie, Energie (IG BCE, “industrial union for mining, chemistry, power”).

Because Bavaria has been investing in biofuel systems, the C.S.U. was not 100% behind kneecapping the Energiewende when Mr. Gabriel submitted his reform proposals on 30 Jan 2014. Bavaria’s Economy & Energy minister Ilse Aigner (C.S.U.) explained that biomass electricity generation is a reasonable alternative for times when there are low quantities of sun or wind.

(GROSS ah   COAL a lee tsee OWN.)

Wer wirklich wissen wolle, welche Wagen am bestgewertet seien…

“Anyone who really wants to know what vehicles are the most highly rated ones…” should not consult Germany’s Munich-based A.D.A.C. automobile club’s car rankings, because “someone who has lied before, you don’t believe any more” as Spiegel.de put it.

A giant in German consumer protection has fallen. The Süddeutsche Zeitung saw documents indicating Germany’s equivalent of the A.A.A. car club had manipulated the numbers of readers’ votes received for its “Yellow Angel prize.” Auto industry pundits are now questioning all the group’s data: blue book car values, European tunnel safety evaluations, accident statistics. “If you want to know the most popular cars on German roads, we can only recommend now that you consult the government’s reliable statistics on new registrations,” Spiegel said a competitor car club, the Stuttgart-based Auto Club Europa (A.C.E.), announced in a written statement.

The hundred-year-old advocacy group, at ~19 million members one of Germany’s largest associations and Europe’s biggest car club, was a mixed-purpose, highly entrepreneurial group that did lobbying work, tested products and services, published a magazine and promoted its magazine, but also did business as an insurer, travel agent, car rental agency, long-distance bus company and of course provided much-appreciated roadside emergency aid to members with car trouble via a large fleet of highly recognizable yellow autos. They also own some small planes and 51 helicopters, apparently, supposedly for airlifting patients to hospitals but not always. Although it certainly has defended drivers well on some issues in its lobbying work, including supporting the environmentally-friendly side of some pollution questions, its interactions with Germany’s auto manufacturers have at times been problematically “symbiotic,” a Süddeutsche.de op-ed commented. The survey for which readers’ interest was faked was apparently part of the group’s self-promotion work: the A.D.A.C. awarded its “Yellow Angel” prize as usual in a lavish evening ceremony at a royal residence in Munich on Thursday, 16 Jan 2014, calling the Süddeutsche’s publication two days before about the possible manipulations “a scandal for journalism,” only to admit to the accusations two days afterward. The magazine’s editor fell on his sword.

The A.D.A.C. had recently disagreed with the statistics cited by Germany’s new transportation minister Alexander Dobrindt (C.S.U.) and his colleagues in support of the C.S.U.’s biggest goal from the recent election: to impose a car toll on non-German drivers entering Bavaria. Now the A.D.A.C.’s statistics are no longer considered reliable.

Update on 24 Jan 2014: Critics are calling for restructuring of the sprawling “anachronistic” A.D.A.C., saying a car club that takes in 2 billion euros annually can no longer be run like a pigeon fanciers’ association.

Update on 17 Feb 2014: Auditor Deloitte only had access to data going back to 2009, but there appeared to be some general trends in how A.D.A.C. manipulated the automobile brands that were made the official winners of the “readers’ choice” Yellow Angel award. No car manufacturer had two models among the top three winners, even though that did happen several times. Preference appears to have been given to new models. When they announced the auditor’s findings, both A.D.A.C. and Deloitte were still sticking with their theory that the results were manipulated by lone gunmen acting alone, said Süddeutsche.de.

Update on 25 Feb 2014: A.D.A.C.’s business manager has now resigned, after the club’s president resigned, after the communications director-and-magazine editor fell on his sword. >200,000 members have cancelled their memberships.

Update on 09 Mar 2014: Income tax is collected by the states in Germany so I presumed it was the Bavarian tax authority that examined the A.D.A.C.’s tax returns from 2007 to 2009 and decided the club owed 500 million euros in back taxes. The club did not pay an insurance tax even though it “provided grounds for an insurance relationship relevant to insurance tax law” [“ein versicherungssteuerrechtlich relevantes Versicherungsverhältnis begründet“]. But apparently this announcement was made by the federal finance ministry [Bundesfinanzministerium]. The ministry said there would be no criminal trial if the A.D.A.C. paid the half billion. The Registration Court at the Munich Local Court [Registergericht beim Amtsgericht München] is examining whether A.D.A.C. still fulfills the requirements for Verein status, in view of its business activities.

Meanwhile, Spiegel.de described a Wirtschaftswoche article reporting that federal highways money that was allocated but not spent in time in other states got sent to Bavaria, to the tune of an extra 140 million euros in 2013. Four other relatively wealthy states also received extra highways funding in 2013 that poorer states such as Berlin had to give back after not managing to spend it building highways: Lower Saxony (+80 million euros), Hesse (+47 million euros), Rhineland-Palatinate (+40 million euros), Saxony (+38 million). Bavaria’s total federal highways funding in 2013 was 1240 million euros (including the extra 140 million).

Update on 04 May 2014: Spiegel.de has received information that the A.D.A.C. auto club owned about 3.5 billion euros in 2012 in stock, bank accounts and real estate. With its dozens of subsidiaries, the A.D.A.C. auto club had a 2012 gross of nearly 1 billion euros, with about 85 million euros profit. Their next project is to open a car repair franchise, with 150 workshops.

Structurally, a Beirat has been added to the association’s management, whose members include someone from Transparency International and a former judge from Germany’s Constitutional Court. Apparently the A.D.A.C. did not and does not have a supervisory board, despite the enormous wealth and power controlled by the club. After the recent manipulation scandal became public, they added the new Beirat or additional advisory board in lieu of a more powerful supervisory board.

Spiegel wrote that the new Beirat, “at their first meeting before Easter, did not have the impression that the club was starting a transparency offensive. Rather, the top management at A.D.A.C. seemed motivated by the question of what actions would have to be taken for the club to retain its legal form of an e.V. registered association. The Munich Registration Court has been reviewing this privilege, which gives the A.D.A.C. certain advantages, for weeks now.”

(Vay ah   VEE ah click   VISS en   VULL ah,   VELL chh ah   VOGG en   om   best gah VAY ah tett   zye en)

Energie-Plus-Eigenheim

Single-family house the Technical University in Munich is planning to build in Fürstenfeldbruck that will combine passive energy conservation with a rooftop photovoltaic array that can produce about 6000 kW/year, Süddeutsche.de wrote, and thus take care of the family’s energy needs. About one-quarter of the electricity generated will be surplus to the house’s requirements and could be sold back into the grid or used e.g. to recharge an electric car. In good weather, the family could thus be able to drive approx. 150 kilometers/day on rooftop sunlight alone, totalling ~11,000 km/year in Germany’s climate.

A four-person family is scheduled to move in and test drive the house for one year after construction has finished in August 2014 and the engineers have checked all the systems.

Construction is projected to cost about 350,000 euros.

(En air GHEE   PLOOSS   EYE g en high m.)

Rüstungsindustrie

Arms industry.

More names of German arms manufacturers seem to be mentioned in thrillers and suspense novels set in the U.S. than are named in the German news, hence the following incomplete list of European-continent weaponmakers:

Bundeswehr:

The German military is selling its used weapons to countries around the world on a large scale.

Airbus (was E.A.D.S.):

Germany’s biggest arms exporter, at >12 billion euros sales in 2010, ~27% of its total sales, reported Wirtschaftswoche.de. Airbus’s old defense & security division, named Cassidian, manufactures e.g. the Eurofighter jet at its largest plant near Ingolstadt, with another plant at Unterschleißheim outside Munich (both in Bavaria). Airbus makes an A400M troop transporter, Tiger combat helicopter, “N.A.T.O. helicopter 90” with problematic autopilot, monitoring systems, electronica and missiles. With Thyssen, Airbus purchased a naval electronics firm.

Update on 30 Jul 2013: The Munich-based Airbus announced it was combining its Cassidian (weaponry), Astrium (aerospace) and Airbus Military branches into one “aerospace and arms,” Raumfahrt und Rüstung or Defense and Space division which will be headquartered at Ottobrunn, outside Munich.

Notoriously-investigated-for-corruption people involved with Airbus have included: company co-creator and then chairman Franz Josef Strauß (C.S.U.) and arms lobbyist Karlheinz Schreiber.

Rheinmetall:

Düsseldorf-based company (North Rhine-Westphalia) that’s apparently one of the world’s biggest defense manufacturers, making Combat Systems, Electronic Solutions and Wheeled Vehicles at factories around the world. Anti-aircraft systems, munitions. Tanks include the Fuchs, the fox, and others: Rheinmetall is partnering with Kraus-Maffei Wegmann to build the Puma tank and the air-conditioned Leopard 2 tank. 2 billion euros in arms sales in 2010, about half its total sales, reported Wirtschaftswoche.de.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 1.5 million euros to persuade the Greek military to buy the “Asrad” anti-missile system manufactured by Rheinmetall in a joint venture with the Swedish Saab company.

Thyssen-Krupp:

Headquartered in the German towns of Essen and Duisburg (North Rhine-Westphalia), this steel company has shipyards that make navy boats and submarines, including the U212 and U214 that use electric drives quietly powered by a fuel cell. With Airbus, Thyssen purchased a naval electronics firm. ThyssenKrupp made about 1.2 billion euros in weapons sales in 2010, reported Wirtschaftswoche.de.

Notoriously-investigated-for-corruption people involved with Thyssen have included: Karlheinz Schreiber.

Update on 03 Dec 2013: ThyssenKrupp recently raised some capital by selling ~50 million shares at ~17 euros each. The increase in stock meant the most important shareholder the Krupp Foundation, which didn’t buy in this time, lost its blocking minority. With the foundation’s ownership in the company dropping to ~23% from ~25%, it could no longer block decisions made at shareholders’ meetings [Hauptversammlung] and thus defend the firm against hostile takeovers and being sold off in pieces [Zerschlagung] by vetoing e.g. fusions, changes made to who’s on the supervisory board, changes to the articles of association or dissolution of the company, Wirtschaftswoche.de elaborated. As long as the Krupp Foundation owned ≤25% they were entitled to three seats on ThyssenKrupp’s supervisory board; under 25%, only two seats.

The reduction in the Krupp Foundation’s power within ThyssenKrupp might have increased the power of Cevian, a 20-employee Swedish firm that buys and sells companies but dislikes being called a hedge fund, wrote Süddeutsche.de. “One of Europe’s most profitable private equity companies,” Süddeutsche.de wrote, Cevian announced it had increased its ownership in ThyssenKrupp to ~6% in September and then nearly 11% after the recent stock sale. Managed by investors Christer Gardell and Lars Förberg, Cevian tends to buy a company’s stock, drive up the stock price and sell after a few years, Süddeutsche.de said, adding that Mr. Gardell has been accused in Swedish media of being a Gordon Gecko-type butcher [“Schlachter“] who likes to break up firms and sell them off piece by piece.

Diehl:

Company based in Nuremberg, Bavaria, that sells missiles. 1.5 billion euros in weapons-industry sales in 2010, about ~27% of its total sales, reported Wirtschaftswoche.de.

MAN SE:

Munich-based transport company that ordered the submarines built at the Thyssen shipyards for which some German prosecutors thought bribes had been paid to government procurement officials in Greece. In 2011, Volkswagen acquired control of MAN SE.

Krauss Maffei Wegmann, KMW:

Munich-based company, with a location in Kassel, that manufactures tanks and self-propelled artillery. It’s a family firm whose main shareholders are the brothers Manfred Bode and Wolfgang Bode. Kraus-Maffei is partnering with Rheinmetall to build the Puma tank and the air-conditioned Leopard 2 tank. Wirtschaftswoche.de reported that Kraus-Maffei is one of the few German companies that only makes weapons, with about 900 million euros in arms sales in 2010.

KMW was named by a man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts. He told Athens prosecutors that he accepted bribes from weapons manufacturers in Germany, France, Russia, U.S.A. and Israel, and specifically from KMW to purchase 170 Leopard 2 tanks. KMW denied this was the case, saying Greece bought the tanks in 2003 after Antonios K. had left his procurement post. Mr. K. also said KMW paid him nearly three-quarters of a million euros to buy artillery.

Update on 21 May 2014: Munich prosecutors are investigating two former Bundestag members (S.P.D.) for taking 5 million euros in a 200-million-euro sale of PzH 2000 tank howitzers to Greece’s defense ministry a decade ago. Some of the money was spent on bribes to Greek officials, investigators think. The corruption statutes of limitation have probably expired so they’re looking into tax fraud aspects. The two S.P.D. politicians worked for K.M.W. as consultants after their Bundestag careers. Dagmar Luuk was chair of the Bundestag’s German-Greek Parliamentary Group with good connections to the S.P.D.’s sister party Pasok in Athens, and Heinz-Alfred Steiner was deputy chair of its Defense Committee.

Update on 26 May 2014: Munich prosecutors are investigating Kraus-Maffei Wegmann’s C.E.O., Frank Haun, and five former managers for tax fraud for deducting bribes paid in the Greek arms deal as operating expenses.

Heckler & Koch:

Southwest German company that exports guns that get mentioned in U.S. murder mysteries. Headquartered in the tiny Rottweiler town of Oberndorf am Neckar, a centuries-old weapons industry center according to Wikipedia. H&K became British-owned in 1991 when BAe’s Royal Ordnance division acquired it, merging into defence giant BAE in 1999. A recent Zeit.de article said an important H&K investor has been the London-based German investment banker Andreas Heeschen, who signed papers buying the company in Dec. 2002 with his partner Keith Halsey and the BAE subsidiary Royal Ordnance. Another German, Alfred Schefenacker, the son of a man who founded a famous car mirrors manufacturer in Baden-Württemberg, bought in with 5% in 2010.

Zeit.de quoted an arms-industry-briefed Bundestag member from the Leftists party as speculating that a weapons manufacturer might be forced to export more aggressively and less selectively in order to stay afloat after a “financial shark” starts pulling money out of the company. The newspaper cited examples of a world-leader, “quality” garden tools manufacturer that went bankrupt five years after Mr. Heeschen bought it, and a soap manufacturer he purchased and kept in an “existentially threatening” situation according to an auditor interviewed by Wirtschaftwoche, Zeit.de wrote. Heckler & Koch has appeared to be struggling with heavy debt burdens: a 2010 lawsuit by four U.S. hedge fonds against Mr. Heeschen’s handling of debt agreements for the company alleged he and his people were using H&K “like a personal piggy bank” and had pulled $130 million out of the company, buying vacation homes, yachts and airplanes for personal use, according to court documents Wirtschaftswoche had seen. H&K denied this: “The private use of investment objects by shareholders” was always “privately paid for” by said shareholders.

Stuttgart prosecutors, regular police and a customs police investigated Heckler & Koch for violation of the Kriegswaffenkontroll- und Außenwirtschaftsgesetz [“War weapons control and foreign trade law”] after their guns turned up in countries for which no export licenses had been issued: rural Mexico, Georgia vs. Russia in 2008, Libya in 2011. The Zeit.de article quoted the same source as adding that “A third investigation will be looking into suspected bribery of foreign and German officeholders.” H&K and Mr. Heeschen denied that the company illegally exported weapons to countries not on their permit lists, but later an in-house letter in April 2013 told H&K employees it appeared likely that two long-term employees, lone gunmen acting alone, had in fact exported H&K guns directly to Mexico on purpose and not by accident via e.g. the U.S.A., Zeit.de said. The investigation was still ongoing in late August 2013.

H&K has also been criticized in Germany for helping build and supply gun factories in Saudi Arabia, turning that country into an arms exporter in addition to an enthusiastic arms importer. Their Saudi partner MIC (Military Industries Corporation) has since been selling these guns at international weapons shows and on the internet. Mr. Heeschen insisted every MIC sale from the joint venture had been reported to and approved by the proper German authorities.

H&K appears to have declined to protect its gun brands in gaming, with the result that, said Zeit.de, their guns appear in almost every shooter game with the concomitant marketing effects but the company doesn’t have to defend the ethics of licensing that.

Mauser, Feinwerkbau:

Other German gun manufacturers that have been based in Oberndorf am Neckar. The two guys who run L&O Holding said their company owned Mauser, in a 2010 interview in the Emsdettener Volkszeitung linked to by Süddeutsche.de.

Krieghoff:

Gun manufacturer in Ulm (Baden-Württemberg, on the Bavarian border). Listed as “corporate partner” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Carl Walther:

Gun manufacturer in Ulm (Baden-Württemberg, on the Bavarian border) that is owned by PW Group.

Update on 02 Jul 2014: Süddeutsche Zeitung said prosecutors are investigating Heckler & Koch and Carl Walther for illegally exporting weapons from Germany to Mexico and Colombia.

Umarex:

Gun manufacturer in Arnsberg (North Rhine-Westphalia) that is owned by PW Group.

PW Group:

Holding company based in Arnsberg (North Rhine-Westphalia, in the Sauerland) that owns Walther and Umarex and has donated to U.S. gun lobbying groups such as the National Rifle Association and/or the National Shooting Sports Foundation.

SIG Sauer:

Switzerland’s Swiss Arms’s German subsidiary, a gun manufacturer headquartered in northernmost Germany, almost in Denmark. Süddeutsche.de reported that in 2013 Swiss Arms belonged to the German investment company L&O Holding.

Update on 02 Jul 2014: Süddeutsche Zeitung, NDR and WDR said internal documents and statements from multiple insiders at SIG Sauer indicate the company got a German export permit to send pistols to its U.S. subsidiary knowing they would be sent on to police in Colombia. This violates the Bundessicherheitsrat’s export permit conditions, which I don’t know. Customs police and Kiel prosecutors have been investigating since May 2014, but lacked evidence that the German firm knew what would happen to the pistols. Now these internal documents from the company headquarters in Eckernförde were found to contain the words “Customer in Colombia,” as well as an internal warning from a corporate lawyer that the two-step export was “most strictly verboten” and could have “harsh penalties.”

The Colombian newspaper El Tiempo is said to have mentioned that Sig Sauer might have paid bribes in Colombia and that German federal police [Bundeskriminalamt] and customs police [Zollkriminalamt] are in Bogotá to investigate.

Kiel prosecutors are also investigating Sig Sauer for sending pistols to Kazachstan’s presidential guard, again via the U.S. subsidiary.

Blaser:

Gun manufacturer in Isny im Allgäu (Baden-Württemberg, on the Bavarian border) that is owned by L&O Holding.

L&O Holding:

Part of a “Holding-Geflecht” [holdings meshwork, lattice; interwoven holding companies] run by Michael Lüke and Thomas Ortmeier of Emsdetten (North Rhine-Westphalia). Süddeutsche.de reported that L&O donated to the National Rifle Association according to N.R.A. documents acquired by the Violence Policy Center (U.S.A.).

Update on 18 Jul 2014: Mr. Lüke and Mr. Ortmeier are said to have made their fortune in textiles, then in 2000 entered the arms industry by buying Sig Sauer, Swiss Arms, Blaser and Mauser. Mr. Ortmeier is said to mainly take care of their textiles interests while Michael Lüke runs the guns companies, said Süddeutsche Zeitung. According to the Commercial Registry [Handelsregister] he has been Sig’s C.E.O. [Geschäftsführer] for years, “sometimes alone.” “In most L&O Holding weapons companies, his name is on the registration documents. The same is true for awkward in-house confidential documents.” Süddeutsche, NDR and WDR said they saw Sig Sauer export documentation listing Mr. Lüke as Ausfuhrverantwortlicher, person responsible for exports.

Ferrostaal:

Paid 149 million euros in late 2011 to conclude a trial for bribing officials in Greece and Portugal to buy submarines. In the Greek bribery story unfolding in December 2013, schmier was paid in Greece to accelerate sales of the U-214 submarine built at the HDW company’s shipyard in Kiel on the northern coast but sold to the Greek military with the Essen-based Ferrostaal’s help (North Rhine-Westphalia). The Greek defense official found to have ~14 million euros in secret accounts told Athens prosecutors he received bribes in the U-214 deal from an employee of the Atlas company, which kits out submarines and is now majority-owned by ThyssenKrupp.

Tognum, now Rolls-Royce Power Systems Holding:

Group that manufactures tank and naval engines, based in Friedrichshafen (Baden-Württemberg). It includes non-aircraft divisions from Daimler’s spun-off MTU; MTU’s aircraft engine manufactories became the Munich-based MTU Aero Engines.

Update on 07 Mar 2014: Daimler plans to sell its shares in what was known as Tognum to its partners at Rolls Royce. According to Wirtschaftswoche.de, Daimler first spun off the company under the name of MTU Friedrichshafen in 2005, selling it to the investor EQT. They renamed it Tognum and held an initial stock offering in 2007. In 2008, Daimler bought in again. In a 2011 joint venture, Daimler and Rolls Royce purchased the company entirely and took it back off the stock exchange. Tognum’s name was changed to Rolls-Royce Power Systems Holding in early 2014.

MTU Aero Engines:

A Daimler-Chrysler subsidiary headquartered in Munich that makes jet fighter engines among other things. Owned by New York private equity company KKR from 2003 to 2005; Wikipedia said KKR said they sold all their MTU stock on German stock exchanges in 2005. Wirtschaftswoche.de reported MTU Aero made 486 million euros in weapons sales in 2010, 18% of its total sales.

Update on 19 Feb 2014: Uproar in the Bundestag after the Greens discovered the responsible Bundestag committee made a 55-million euro payment to MTU in December 2013 without obtaining Bundestag approval as was necessary. The payment was compensation for a 2011 decision to reduce the German military’s Eurofighter order from 180 to 140 fighter jets. But budget rules require the ministry to obtain approval from the Bundestag’s budget committee [Haushaltsausschuss] for every single expenditure >25 million euros. The two state secretaries responsible for making the payment apparently did not consult with the defense ministry’s management [Hausleitung] as prescribed either. Germany’s new defense minister said she was shocked and, said Spiegel.de, invited all responsible persons in her ministry to an Arms Board [Rüstungsboard] meeting to discuss the defense department’s biggest procurement projects. After the meeting, she fired the two state secretaries and said the Bundeswehr will be thoroughly examining its ~1200 procurement projects over the next three months.

Daimler:

Daimler’s subsidiary Mercedes-Benz Military Vehicles exports them around the world, including to the Gaddafi regime in Libya. Headquartered in Stuttgart, Baden-Württemberg.

Siemens:

Huge electronics and trains manufacturer in Erlangen, Bavaria, that partnered with IBM to replace the Bundeswehr’s “information and communications technology,” codenamed Projekt Herkules. Costs originally promised at 6.8 billion euros now expected to run to at least 7.8 billion, as estimated by the Association of German Taxpayers [Steuerzahlerbund e.V.] which tries to track German military cost overruns.

Trovicor:

Headquartered in Munich, this surveillance technology firm was originally created at Siemens twenty years ago, where it was called Voice & Data Recording. It was combined into an Intelligence Solutions department at the joint venture Nokia Siemens Networks in 2007, alleges German Wikipedia, and sold to a Munich firm of private investors in 2009. The company has branches in Dubai, Pakistan and Kuala Lumpur. Only governments are said to purchase Trovicor products, such as their “Monitoring Center” (formerly “Siemens Monitoring Center”).

Süddeutsche Zeitung said information from WikiLeaks showed that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

Utimaco:

A German company the French company Qosmos said bought their deep packet inspection components to sell them to the Italian surveillance company Area SpA which was building a surveillance system for the Assad regime in Syria that was used to torture people. Süddeutsche Zeitung said information from WikiLeaks shows that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

Süddeutsche Zeitung said information from WikiLeaks showed that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

Elaman:

A Munich company specializing in tools for monitoring and analyzing data from just about any communications network.

Süddeutsche Zeitung said information from WikiLeaks showed that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

FinFisher or FinSpy, a.k.a. Gamma, Gamma International GmbH, FinFisher GmbH:

A joint English-German (Munich) enterprise that sells software exploits to governments. E.g., “The FinFly Exploit Portal offers access to a large library of 0-Day and 1-Day Exploits for popular software like Microsoft Office, Internet Explorer, Adobe Acrobat Reader, and many more.” They sell products for accessing e.g. computers and phones, with packages for e.g. remote intrusion or U.S.B. stick penetration sold together with training for remarkably low prices. Clients include governments such as Hosni Mubarak’s in Egypt, it is alleged. Citizen Lab in Toronto found traces of their software in Brunei, Ethiopia, Turkmenistan and the United Arab Emirates, and in the Czech Republic and the Netherlands.

English Wikipedia alleged that the umbrella company, Gamma Group, specializes in surveillance and monitoring and is owned by a man with an English name via a shell company in an offshore tax paradise. German Wikipedia alleged that that man’s son now owns the company (85%) while a man with a German name owns the other 15%, and that the German government supports the company by providing export credit guarantees [Hermesbürgschaft, Hermesdeckung].

Update on 11 Apr 2014: Gamma is said to have sold a trojan program to the government of Bahrain that was used to attack government critics.

German manager and co-owner Martin Münch told the Süddeutsche Zeitung that his firm never violated German weapons export laws, but the S.Z. commented that this is not as exemplary as it sounds because the software is not shipped from Germany but from England. The same European dual-use regulation applies in England and Germany for the export of surveillance technology, S.Z. said, but for attack software it merely requires the purchasing country to create a certificate affirming all is properly installed as agreed and send that certificate to the exporter, who archives it. Neither Mr. Münch nor the responsible German Economy Ministry wanted to tell the newspaper how often the government inspects the certificates and the accuracy of their contents.

S.Z. said information from WikiLeaks shows that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

DigiTask:

Hessian software company that admitted in 2011 they’d sold software that could be behind the Bundestrojaner to the Bavarian government in 2007. They sold similar surveillance software to state and federal governments in Austria, Switzerland and the Netherlands.

According to Deutsche Welle’s 2011 article,

“an online record on an official European Union website shows that in 2009 the German Federal Network Agency (Bundesnetzagentur) paid DigiTask over 660,000 euros ($897,000) for the construction of a ‘wiretap testing and monitoring system.'”

D.W. said a Bavarian attorney said this trojan was installed on his client’s laptop at the Munich airport.

Rohde & Schwarz:

Die Zeit described this company as a weapons manufacturer. Nominally, the company makes and sells “high-frequence measurement technology, radio communication, television broadcasters, radio broadcasters, locational technology and surveillance technology” according to de.wikipedia and “Cellular, Wireless Connectivity, Navigation, Broadcast TV and Radio” according to en.wikipedia. They’re based in Munich with facilities in the Czech Republic, U.S., Singapore, Korea, China, Denmark, France, Great Britain, Singapore and Malaysia, among others.

Mowag:

Swiss company that makes armored vehicles. Founded in 1950 in Switzerland, it is now owned by the U.S. weapons manufacturer General Dynamics. In 2003, General Dynamics merged it with Spain’s Santa Barbara Sistemas and Austria’s Steyr Spezialfahrzeug to form their General Dynamics European Land Combat Systems business unit, headquartered in Vienna.

Update on 06 Mar 2014: The Swiss parliament voted 94 to 93 to overturn a ban on exporting weapons to countries with human rights problems. Proponents for overturning the ban said Swiss companies shouldn’t be disadvantaged economically because they can’t sell weapons to e.g. Saudi Arabia like e.g. Sweden or Austria. What’s funny is that the Spiegel.de article reporting this showed tanks made by Mowag AG, which belongs to the U.S.A.’s General Dynamics, which also owns the Austrian competitor.

Swiss UAV:

Switzerland-headquartered drone manufacturer that has partnered with Sweden’s Saab Group.

BAE Systems:

British firm that’s one of the world’s biggest arms manufacturers, called Europe’s second-largest after General Dynamics in July 2014. Said to make jet fighters, military submarines, aircraft carriers and bits of French nuclear weapons, though they announced they’d discontinued their production of land mines and cluster bombs after public protest. Buys, sells and owns pieces of many other weapons manufacturers around the world.

BAE manufactures a competitor to Krauss Maffei Wegmann’s “Leopard 2” tank, called the “Challenger.”

Serious corruption investigations of BAE apparently by the U.K.’s Serious Fraud Office, the U.K.’s National Audit Office, the U.S.’s Department of Justice and a Tanzanian prosecutor whose life was threatened, about sales to countries such as Chile under Augusto Pinochet, the Czech Republic, Romania, South Africa, Saudi Arabia and Tanzania.

Rolls-Royce:

British aircraft engine manufacturer that makes jet fighter engines, submarine nuclear reactors. Partnered with Bavarian car-maker BMW, who bought their car-manufacturing subsidiary.

MDBA:

Trans-European missile manufacturer that’s been acquiring missile companies from Germany, Spain, France, Italy, U.K. and U.S.A.

MDBA’s German branch, which used to be called LFK-Lenkflugkörpersysteme GmbH, makes “smart bombs,” cruise missiles or guided missiles. It was headquartered outside Munich but has been moved to a small town near Ingolstadt, Bavaria.

While touring Kurdistan in January 2014, Bundestag member Jan van Aken (Leftists) and journalists traveling with him were shown Milan anti-tank missiles, manufactured by MDBA in a German-French partnership, that Al Qaeda is now using to fight in Syria. It’s not clear exactly how these particular bombs got to where they were found, but Germany sold thousands of Milan missiles to the Assad government in the 1970’s. Now Al Qaeda-affiliated groups have managed to divert some and are fighting with them. Although France was usually listed as the seller of these “so-called small arms,” NDR wrote, Germany had a veto right to stop any sales. Islamist rebel groups have apparently uploaded videos of themselves plundering Assad-family weapons caches that include Milan missiles. Syrian videos have also been uploaded showing the missiles in use, including ones of more recent manufacture than the 1970’s.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 400,000 euros to persuade the Greek military to buy Exocet missiles manufactured by MDBA.

Saab:

The famous Swedish car company was apparently only a subsidiary to a large Swedish aerospace and defense manufacturer. Sometimes partners with the U.K.’s BAE. They make unmanned aerial systems, aerostructures, fighter jets, unmanned underwater vehicles, sensor systems, jammer systems, “signature management systems,” missiles, torpedoes, ground combat weapons, remotely operated (ground) vehicles, radar systems for land, sea and air, electronic defense systems, and provide military training and education. Military jets include the Gripen.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 1.5 million euros to persuade the Greek military to buy the “Asrad” anti-missile system manufactured by Rheinmetall in a joint venture with Saab. Antonios K. also said he received ~240,000 euros to encourage purchase of Saab’s Arthur locatory radar system.

Volvo:

The Swedish truck manufacturer has an arms branch, because there was talk about it as a possible candidate for a merger with Krauss Maffei Wegmann.

Volvo owns the French company Renault Trucks Defense, which is partnering with the Russian arms manufacturer Uralwagonsawod (under U.S. sanction for destabilizing eastern Ukraine) to develop a tank. Uralwagonsawod said in June 2014 that the project was still on schedule. Volvo will be providing the tanks’ engines.

Finmeccanica:

Italian defense contractor that has delivered to the Assad government in Syria. In partnership with various firms around the world, Finmeccanica makes jet fighters, military aircraft, helicopters, space stuff, defense electronics, security electronics, “defense systems.” The Italian government still owns a stake in the company. Two recent C.E.O.’s have had to step down after corruption charges. In a 2013 article, Spiegel.de said about Finmeccanica that “Italy’s largest manufacturer of planes and weapons is said to have passed opulent bribes to foreign customers, from which admittedly a portion had to flow back to the donors.”

Hacking Team:

Milan-based firm that sells surveillance software to governments, including ones with questionable human rights records.

Area SpA:

An Italian software company based outside Milan that was building a surveillance system for the Assads in Syria, according to the French firm Qosmos. The German company Utimaco was also involved, Qosmos said.

Beretta, Benelli, Franchi:

Italian companies that export guns mentioned in U.S. murder mysteries. Listed as “corporate partners” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Iveco:

Italian industrial vehicles manufacturer, under Fiat, that makes armored vehicles.

When Sergej Schojgu became the Russian defense minister in early 2013, he immediately canceled the purchase of 1275 armored vehicles from Iveco, said the F.A.Z. The Russian military had to buy the deal’s first tranche of 1775 vehicles for 1.5 billion euros, but they said they were only doing it to avoid breach of contract.

Glock:

Austrian company that exports guns mentioned in U.S. murder mysteries. Listed as “corporate partner” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Steyr:

Austrian company that exports guns mentioned in U.S. murder mysteries.

Steyr Spezialfahrzeug:

Austrian company that makes armored vehicles. General Dynamics bought it from the U.S. car manufacturer General Motors’s weapons division in 2003 and merged it with Spain’s Santa Barbara Sistemas and Switzerland’s Mowag in 2003 to form their General Dynamics European Land Combat Systems business unit, headquartered in Vienna.

FN Herstal:

Fabrique National d’Herstal, Belgium, which Wikipedia alleges is Europe’s largest small arms manufacturer and owns the famous U.S. firms Winchester (U.S. Repeating Arms Company) and Browning. Listed as “corporate partner” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Dassault Group:

French company whose subsidiaries e.g. manufacture aerospace vehicles and equipment, fighter jets, missiles, logistics systems and military simulators. It owns France’s second-largest newspaper of record, Le Figaro.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 800,000 euros to persuade the Greek military to buy “Mirage 2000”-type fighter jets manufactured by Dassault.

DCNS:

French company majority-owned by the French government that makes Armaris submarines, nuclear-powered aircraft carriers and e.g. amphibious assault ships. DCNS and Thales partnered to create the Armaris submarine manufacturer.

Investigated in France for allegations of bribery in e.g. Malaysia and Taiwan.

DCNS manufactured the two helicopter carriers France still wants to deliver to the Russian navy in the fall of 2014.

Thales:

Large French defense manufacturer, partly owned by the French government. Thales and DCNS partnered to create the Armaris submarine manufacturer.

Wikipedia said a financial advisor to South African president Jacob Zuma’s A.N.C. party “was found guilty of organizing a bribe on behalf of Thales” and the World Bank has blacklisted Thales for bribery. Thales was told to pay the biggest bribery fine in modern French history in the 2011 resolution of a 1991 case involving the sale of frigates to Taiwan, a dead Taiwanese procurement officer and alleged large ferbribery slush funds in Swiss bank accounts, back when the company was called Thomson-CSF.

Vupen:

Montpellier-based French firm that calls itself “The Leading Provider of Defensive and Offensive Cyber Security Intelligence.”

Qosmos:

French company that sold deep packet inspection software, matériel de surveillance, to the Assad regime in Syria. After complaints from human rights organizations, the French government is now investigating this company for assisting to commit torture.

In 2012, Qosmos said it didn’t sell the software directly to the Assads. Instead, the company said, before quitting the project in 2011 they sold the software to a German firm called Utimaco, who sold it to an Italian firm called Area, who handled things from there. Also, Qosmos said, when they dropped out in 2011 the software wasn’t finished yet and couldn’t be fully implemented. In a recent response to the media, Qosmos still said they didn’t sell to Syria. Qosmos said they don’t sell surveillance systems, merely components that their clients can put into things.

Renault:

Renault Trucks Defense has been working on a project since early 2013 with the Russian arms manufacturer Uralwagonsawod (which is on the U.S.’s sanctions list for contributing to the destabilization of eastern Ukraine). They are developing a tank. The Russian side said the first functioning prototype should be available in September 2015.

In early April 2014 the French side said the proect had been suspended, but in late June 2014 Oleg Sijenko, the C.E.O. of the Russian side, said the E.U. sanctions had not affected the project. The government of France is said to want to please Uralwagonsawod because it is the majority shareholder of the French steelworks Sambre et Meuse, which employs ~300 people.

Renault Trucks Defense is owned by the Swedish arms manufacturer Volvo.

Santa Barbara Sistemas:

Spanish company that makes armored vehicles, weapons systems and ammunition. Acquired by the U.S. weapons manufacturer General Dynamics in 2001. General Dynamics combined it with Austria’s Steyr Spezialfahrzeug and Switzerland’s Mowag in 2003 to form their General Dynamics European Land Combat Systems business unit, headquartered in Vienna.

General Dynamics:

Europe’s biggest weapons manufacturer, followed by BAE and, if their merger goes through, the combined Krauss Maffei Wegmann and Nexter tank and artillery manufacturers.

(RISSSS toongs in dooze tree.)

P.K.W.-Maut

Car toll.

The C.D.U.’s Bavarian state sister party made a strange campaign promise for the Sept. 2013 election that they would levy a toll on foreign drivers entering Bavaria. It seemed this would be illegal in the E.U., in addition to unethical. The C.S.U. said the country of Austria was doing it, so why couldn’t the state of Bavaria? During the sole televised debate between the two biggest parties’ candidates—in Germany’s deliberately foreshortened campaign, kept brief by electoral laws—Angela Merkel quietly said “no” to the foreigner toll. Horst Seehofer (C.S.U.) swore his party wouldn’t sign a new federal coalition agreement with the C.D.U. without it.

The C.S.U. was re-elected in Bavaria and might be able to rule alone there with no coalition partner (they’ve been in charge in Bavaria since 1946).

In a surprise move, after the German elections a decision was announced from the E.U. transport commissioner Siim Kallas (libertarianesque Estonian Reform Party) indicating Brussels might allow such a state tax on foreigners! In the E.U.! Though they backtracked afterward, it still appeared the P.K.W.-Maut might be allowable were Bavaria to make all drivers entering the state pay a toll and then selectively refund it via the annual tax paid by car owners. That method would miss refunds to numerous deserving Bavarians—electric cars and other environmentally friendly cars already get car tax refunds for example—and the C.S.U. was scratching their heads about how to announce that those car owners wouldn’t be taxed like a foreigner. German consumer protection advocates and apparently a study by the country’s equivalent of A.A.A. (A.D.A.C., the General German Automobilclub) said the proposed toll’s stated intended benefit for infrastructure construction was disingenuous because it would create more administration costs than revenue; if this is true it makes the toll appear more racist. The toll would also irritate non-Bavarian Germans, many of whom were already looking askance at the Bavarian conservative politicians’ attempt to stoke up Ausländerfeindlichkeit, hatred of foreigners, and surf it to power.

Thomas Oppermann (S.P.D.) pointed out that, in the grosse Koalition negotiations to form the new government, the C.D.U. had firmly refused the S.P.D.’s campaign promise to inflict new taxes on the rich yet it would allow this new tax on people who aren’t wealthy.

Investigating the issue in more detail, on 07 Nov 2013 ZDF heute journal interviewed a traffic-expert pundit professor who estimated Germany needed ~7 billion euros more per year to fix its road infrastructure, i.e. more than doubling their current expenditures. He particularly used the example of bridges.

Reporting on 07 Nov 2013 seemed to indicate the debate had expanded to include introducing car tolls on all German autobahns, perhaps merely responsible political debating about any potential reforms or perhaps what it might take to weasel in the Bavarian foreigner disincentive under current rules. The numbers are still unclear, with the C.S.U.-led federal transportation ministry estimating much higher revenues from new car tolls than others estimated. ZDF listed approximate annual numbers from countries who’ve already introduced an autobahn car toll:

Austria. Car toll: 390 million euros, truck toll: 1,100 million euros; 800 million euros spent on annual road construction and maintenance. About half the car toll revenues come from foreign drivers. The Austrian car toll is about 80 euros/year, for residents and foreigners alike.

Switzerland. Car toll: 300 million euros, truck toll: 1,250 million euros; 1,250 million euros spent on annual road construction and maintenance. About 1/3 of the car toll revenues come from foreign drivers. The Swiss car toll is about 33 euros/year for residents and foreigners alike.

Germany. Truck toll: 4,600 million euros; ~5,000 million euros spent on annual road construction and maintenance. Estimates for revenues from an autobahn car toll vary between 350 and 700 million annually (the low number is from the A.D.A.C. drivers’ association and the high number is from the C.S.U.-led transportation ministry).

Austria and Switzerland said they spent 7% to 12% of the autobahn car toll revenues on its administrative costs. In Germany administrative costs could be much higher because of the C.S.U.’s plan to return the money to Bavarian drivers by offsetting it from their car tax. The toll might thus merely bring a bad reputation, highly-public permission for anti-foreigner sentiment and at most a few hundred million euros to fix a budget gap of billions.

Update on 11 Nov 2013: The two parties agreed to temporarily stop discussing a new car toll in their grosse Koalition negotiations.

Update on 27 Nov 2013: Austria and Holland threatened to sue Germany before the European Court of Justice if Germany implements the C.S.U.’s car toll on foreign drivers. The negotiated grosse Koalition agreement presented on Wed. 27 Nov 2013 said yes to the toll if it violated no E.U. rules and negatively impacted no German drivers.

Update on 01 Dec 2013: Protesters walked carrying signs on the Bavarian and Austrian sides of the Inntal A12 autobahn, demonstrating against car tolls. Austria had announced it would create a new checkpoint there to verify that drivers had paid its car toll, probably in reaction to Bavarian politicians’ insistence on an anti-foreigner car toll. People living on both sides of the border fear cars will start filling up local roads trying to avoid the highway tolls. Strolling on the autobahn with friends and neighbors looked rather pleasant, and the Bavarian and Austrian mountains there are so beautiful.

(Pair ZOH! nen croft vog EN   m OW! t.)

Beibehaltung

Retention.

April 2013: After it became known the chair of the supervisory board [Aufsichtsrat] of Germany’s richest and most successful soccer team, Bayern Munich, was under investigation for voluntarily reporting himself [Selbstanzeige] as having an insufficiently reported and taxed ~500 million euros in a Swiss bank account, there seem to remain some loose ends in his origin story for where the half billion came from*. Yet on 06 May 2013 Bayern Munich’s supervisory board voted not to accept Uli Hoeneß’s resignation as its head. Members of the supervisory board who supported Mr. Hoeneß at this meeting included: Herbert Hainer, C.E.O. of Adidas. Rupert Stadler, C.E.O. of Audi. Timotheus Höttges, chief of Finances and Controlling at top Bayern sponsor Deutsche Telekom. Martin Winterkorn, C.E.O. of Volkswagen. Edmund Stoiber (C.S.U.), former candidate for German chancellor in the C.D.U./C.S.U. party.

10 May 2013: Mr. Hoeneß is suing the responsible prosecutor’s office for being the source of the press’s discovery of the investigation into the mysterious half billion euros, in April 2013.

30 Jul 2013: Uli Hoeneß has been charged with alleged tax evasion. The Economic Crimes Chamber [Wirtschaftsstrafkammer] of the second Munich Landgericht [Münchener Landgericht II] must now decide whether it will allow the trial to proceed and whether to open the main trial. The decision is expected in late September 2013.

04 Aug 2013: The president of the German Soccer Association [Deutscher Fussballbund e.V., D.F.B.], Wolfgang Niersbach, declared his support for Uli Hoeneß.

07 Aug 2013: Stern.de report that an anonymous informant told the second state prosecutors office in Munich [Münchener Staatsanwaltschaft II] that Mr. Hoeneß’s untaxed millions are not limited to one account at the Swiss Vontobel bank (said by prosecutors to have contained 500 million Swiss francs but said by Mr. Hoeneß in April 2013 never to have exceeded around 15 to 20 million euros, tops). Stern.de reported the informant said Mr. Hoeneß’s Vontobel account had balances consistently [“durchgehend“] exceeding 500 million Swiss francs in years before 2008 and also supplied information about stock dealings and transactions involving numbered accounts at three other Swiss banks: Crédit Suisse, Julius Bär and the Zürcher Kantonalbank.

The whistleblower said Deutsche Telekom stock with which Mr. Hoeneß participated in so-called dividend stripping was also involved.

04 Nov 2013: Mr. Hoeneß will have to “answer before a court” after all, starting ~10 Mar 2014. Landgericht Munich II’s “Economic Chamber” [Wirtschaftskammer] announced it will allow trial of charges against him of tax evasion and providing inaccurate answers. His Selbstanzeige earlier this year “contained errors.”

Frank Bräutigam, ARD tagesschau.de’s excellent legal correspondent, said the trial will evaluate the correctness of the Selbstanzeige (timeliness, completeness and accuracy). If the court determines that the Selbstanzeige was not properly executed, next it must decide how much money was improperly handled and what penalties could be imposed.

The Bayern Munich football club’s supervisory board reconfirmed that they want to retain Mr. Hoeneß as president of the club.

14 Mar 2014: Uli Hoeneß’s trial for 3.5 million euros of tax evasion was this week. In the two weeks before the trial started on Monday, he apparently gave prosecutors 50,000, some said 70,000, pages of Vontobel bank account statements previously withheld. On Monday he surprised reporters by announcing he’d actually not paid 18 million euros tax, but this was the ultimate number, no more revelations. On Tuesday, an auditor testified that the amount was actually 27 million. He was found guilty of 28.5 million euros in tax evasion and sentenced to 3.5 years, which will probably be in an open prison. On Friday, he said he would not appeal. The prosecutors may still decide to appeal. Uli Hoeneß resigned as president of the FC Bayern Munich soccer club and chair of FC Bayern Munich Inc.’s supervisory board.

Mr. Hoeneß’s salary tended to be about 10 million euros per year. The Vontobel account never had more than 150 million euros in it at one time.

(BY beh HALT oong.)

* Mr. Hoeneß said he netted 500 million euros between 2000 and 2012 by compulsively playing the stock market starting with a 10-million-euro combination gift/loan in 2000 from a now-deceased friend, a former C.E.O. of Adidas.

“Das Geld dafür geben die Anderen”

“Other people are paying for it,” how financial reporter Frank Bethmann commented the U.S. company Verizon’s “schwindelerregend” offer of $130 billion to buy out British partner Vodafone’s stake in their U.S. joint venture Verizon Wireless. In the 02 Sep 2013 announcement of the sale, Verizon said as part of it they intended to borrow $25 billion one week later at the currently very low interest rates; that would have been the largest amount ever borrowed by a company in the history of the world apparently.

Update on 12 Sep 2013: Verizon’s $49 billion Unternehmensanleihe [“company loan” i.e. corporate bond] “emission in eight tranches at varying interest rates and terms to investors around the globe” was the biggest ever, according to manager-magazin.de, adding that the takeover itself was also the third-biggest ever.

This is not the only vertiginous telecom merger in the works. There’s two in the German market as well.

On 23 Jul 2013, Spanish Telefónica’s German subsidiary O2 announced that it wanted to buy the Dutch KPN’s German subsidiary E-Plus, though “only” for five billion euros. The resulting company would become the German market’s largest mobile phone provider (43 million customers), followed by Deutsche Telekom subsidiary T-mobile (37 million customers) and then the British Vodafone (32 million c.). The merger required approval from German and E.U. competition authorities.

Update on 12 May 2014: The German Monopoly Commission [Monopolkommission] told the Frankfurter Allgemeine Zeitung they expect the E.U. to set serious competition-saving conditions for approving Telefónica’s acquisition of E-plus, including that there will still be four mobile telephony providers in the German market after the merger. “Abstract concessions and offers won’t do it.” Three mobile phone providers competing in the German market would not suffice because E-plus was the one that stirred up the market the most and it would be the one disappearing.

Update on 13 Sep 2013: Now British Vodafone is purchasing the Munich-based Kabel Deutschland, “Germany’s biggest cable network operator,” at ~8.5 million television households,” for ~11 billion euros (~7.7 billion for ≥75% of Kabel Deutschland’s stock and the rest to cover Kabel’s debts; stock cost to be announced Monday 16 Sep 2013), according to Spiegel.de and manager-magazin.de. This will increase Vodafone’s competitiveness with Deutsche Telekom in the German market selling wireless and landline telephonery, television cable and internet access. European competition authorities approved the deal on 20 Sep 2013.

Huge telecom mergers & acquisitions could be motivated by more than just the roseate future of voice and internet communications plus current rock-bottom interest rates. If telecom industry people believe governments will stop defending net neutrality and consumer privacy, they will fear they must join a large existing telecom and fight to expand it, or die. They will not think risky entrepreneurship or small-to-medium-sized companies are an option. If a telecom gets big enough in a deregulated market that includes suspicionless surveillance, the money will sort itself out somehow. In regulatory situations where governments have to grant unusual concessions to big telecoms, governments will grant unusual concessions to big telecoms.

(Doss   GELD   dah foor   gay ben   dee   ON dare en.)

Abwicklung von Hypo Alpe Adria

Winding up, closing down, resolution, clearing, of Austrian bank Hypo Alpe Adria. The E.U. Commission appeared to give its permission to break up the struggling bank on 02 Sep 2013. The European competition authority still had to give its approval.

In 2009 the country of Austria took back HGAA from the BayernLB, Bavarian Landesbank, and nationalized it. Hypo continued losing money. By 2012 Austrian taxpayers had given the bank 3 billion euros bailout, but still it needed ~800 million euros in the first half of 2013 and a projected 700 million in the second half, with expectations of ~5 billion euros more required by 2017. The plan is now to sell the Austrian branch to a British investor in Q4 2013, close the Italian branch and sell off the other southern European banks (250 branch offices employing 4300 workers) by 2015.

The reporting repeating the numbers cited by the Austrian finance ministry varies, and it’s hard to match up the cited numbers with the years given. Austrian finance minister Maria Fekter (Ö.V.P.) said the numerical uncertainty is partially because they don’t know how much they’ll get in the sale of the southern European branches. They also want to move HGAA’s failed loans, worst paper and unsellable divisions “away” into a “separate Abwicklungseinheit,” a separate clearing unit, also called an “Abbaubank,” literally breakdown or decomposition bank but apparently called in English a “restructuring unit,” “separate from the core bank.” Without the Abbaubank device, Austrian taxpayers might be on the hook for 16 billion euros, another Austrian finance ministry number, to wind down the HGAA.

We know a bit about what happened under Carinthian and Bavarian management of HGAA. What happened in Italy?

Austria will be holding a parliamentary election on 29 Sep 2013.

Update on 14 Mar 2014: It’s been decided that the Hypo Alpe Adria group will be wound down as a “bad bank,” into a “deregulated, private-economy-organized company” said Austrian finance minister Michael Spindelegger. About 18 billion euros in bad paper will be moved into this vehicle. The decision will increase Austria’s national debt >5%, from ~75% to >80% of the country’s gross national product. HGAA’s subsidiary banks in Italy and the Balkans are to be sold as quickly as possible. It should take the bad bank about a decade to finish closing down the organization, only after which the true costs will be known, said a social minister who will no longer be social minister a decade from now.

Update on 17 Jun 2014: The Austrian state of Carinthia owes ~12 billion euros because of guarantees it made for Hypo Alpe Adria. Carinthia’s annual budget is apparently ~1 billion euros.

A week ago Austria’s cabinet passed a special law that said Carinthia will no longer be responsible for all the bank’s debt that it has guaranteed. This should save the state ~800 million euros while stirring up a lot of trouble for Austria.

Austria’s federal government is deliberately avoiding bankruptcy for the troubled bank because they fear it would pull the state of Carinthia into bankruptcy. The cabinet passed this “special law” haircutting non-first-tranche holders of HAA debt, whose riskier tranche under normal circumstances would only come into play after a bankruptcy. The Green party said they should just declare the bank bankrupt and work out fair haircuts for all. Carinthia’s most important services such as day care centers and hospitals are mandated by law, said the Greens, so the bank’s creditors wouldn’t be able to pull much money out of the state government. “These investors have not earned the protection of the taxpayers.”

(OB vick loong   fon    HIPPO   I’ll pay   ODD ree ah.)

Unionsrecht

“Union law” in Germany apparently means European Union law and not the rules of the conservative Christian Democratic union consisting of the national-level C.D.U. + the Bavarian state C.S.U. This distinction became clear during a television news discussion about the legality of C.S.U. head Horst Seehofer’s strange and very unsettling* campaign promise to create a toll for foreigners driving on Bavarian roads. Mr. Seehofer’s political party, which has ruled Bavaria since 1946, claimed they did a survey that found 88% of Bavarians disliked foreigners enough to support the C.S.U.’s proposed toll or “Ausländer-Maut.” C.S.U. proponents also said the country of Austria introduced a similar foreigners fee and why wasn’t that illegal but their state-level proposal is.

The Bavarian state election (for the Landestag, state parliament) was Sunday, 15 Sep 2013, one week before Germany’s Bundestag election.

During the campaign—mercifully short by U.S. standards—the C.S.U. party promised Bavarian voters it would refuse to join a German federal government coalition after the 22 Sep 2013 federal election if their federal partners said they couldn’t tax foreigners. But it’s hard to believe the C.S.U. could afford to exit that coalition. Bavaria is said to have the best schools in Germany, so it’s hard to believe Bavarian voters would believe the C.S.U. when they promised to exit that coalition, either. The threat didn’t work on Chancellor Merkel (C.D.U.), on the surface at least. During what was apparently the only formal evening debate between the two largest parties’ candidates, she said on national television that the C.S.U.’s proposed foreigner-specific state road toll was not going to happen.

But the whole point appears to have been to talk about taxing foreigners in Bavarian beer tents, because Horst Seehofer persisted in doing that even after Angela Merkel’s quiet and very public “no.” Mr. Seehofer’s challenger, Munich mayor Christian Ude (S.P.D.), called it “eine bewusste Irreführung der Bevölkerung,” a deliberate confusion or leading-into-crazy-country of the people.

* Not only do proposals like this sound like they could grow racism, but as we now know since the Snowden trove revelations there are several ways the new toll could be used to spy on foreigners.

(Oo n YO nz wrecked.)

Rüstungsfirmen wegen mutmasslichen Schmiergelder untersucht

“Razzias Searched Weapons Manufacturers for Evidence in Bribe Accusations.” Bremen prosecutors confirmed police had searched the offices of two German arms manufacturers on 23 Aug 2013 for evidence in corruption charges brought against the firms. Rheinmetall Defence Electronics and Atlas Elektronik are being investigated for paying bribes to Greek politicians and bureaucrats and for not paying taxes in sales of German submarine equipment to Greece.

Süddeutsche.de said it’s thought each firm paid Greek officials about 9 million euros in bribes or “Schmiergeld,” shmear money, lubrication funding.  The bribery charges go back a long way in time, in Atlas Elektronik’s case to before the current owners’ purchase of the firm. Payments were made to a British “letterbox” company that belonged to a Greek company.

Despite the British background in this investigation, there’s a long history of corruption in German submarine sales to Greece according to Süddeutsche.de. Munich prosecutors have been investigating it for years because an Essen company Ferrostaal caught paying bribes to Athens used to be owned by MAN SE, a transport vehicles manufacturing company based in Munich. Most of the extra Ferrostaal submarines sold to Greece via the shmear were built at ThyssenKrupp shipyards, and Bremen prosecutors say Ferrostaal involvement hasn’t been ruled out yet in the current investigation of Rheinmetall and Atlas.

Prosecutors of multiple German districts have known about these problems for years but reportedly only found enough evidence to take action in 2012. For example, the Süddeutsche wrote that EADS (now Airbus) and ThyssenKrupp are joint owners of naval electronics specialist Atlas Elektronik. After buying the company in 2006 from the British firm BAE, they stopped payment of the bribes in 2007, bribes that had apparently started with a consultant contract in 2002. Atlas informed prosecutors about it in 2010 but nothing happened until further info was received from a 2012 tax audit at Rheinmetall Defence Electronics, they said. Rheinmetall denies all bribery charges.

(RISS toongs firm men   vay gen   moot MOSS lichh en   SHMEAR geld ah   oont ah ZOOCHHT.)

Anklagebehörde

“Prosecuting authority,” prosecutors’ office.

The Bavarian state bank BayernLB (Bayerische Landesbank), owned by the state of Bavaria and the Sparkasse banks (the largest German public bank), bought the Austrian bank HypoGroup Alpe Adria in 2007 and lost billions of euros as a result. On 07 Aug 2013 the Munich regional court Münchener Landgericht I announced it would not permit prosecution of charges brought against the entire Landesbank’s management board [Vorstand] while criticizing that charges hadn’t been brought against members of the higher-level overseeing “administrative board” [Verwaltungsrat], which gave permission for the sale. The supervisory Verwaltungsrat contained important C.S.U. politicians who might have been thus being protected by Bavarian prosecutors, the Bavarian judges imputed. Bavarian opposition parties S.P.D. and Freie Wähler [Free Voters] had filed complaints against BayernLB Verwaltungsrat members and state ministers Erwin Huber, Günther Beckstein and Kurt Faltlhauser plus some less important C.S.U. politicians for breach of trust of bank assets [“Veruntreuung von Bankvermögen”] in the Austrian acquisition, according to Süddeutsche.de and tagesschau.de.

BayernLB’s management board allegedly cited a falsely inflated purchase price to the supervisory administrative board, so theoretically criminal charges should be brought against management board members, according to tagesschau.de. But the Munich Landgericht I court denied prosecution of that on 07 Aug 2013, citing the latitude enjoyed by managers in negotiating sales. This allegedly angered Bavarian state prosecutors. Also angered by accusations they’d protected C.S.U. politicians by not bringing charges against members of the higher-level Verwaltungsrat [administrative board] supposed to monitor or do “controlling” of BayernLB’s management board, Bavarian state prosecutors responded that the management board members had failed to adequately inform the higher-level administrative board; indeed the supervisory Verwaltungsrat was deliberately defrauded with malice aforethought (“vorsätzlich arglistig getäuscht”) by members of the BayernLB management board, in the opinion of the prosecutors. The supervisory administrative board that okayed the deal consisted of people from the Bavarian state government (ruled by the C.S.U. since 1946) headed by Edmund Stoiber and people from the Sparkasse banks.

The German bank manager Bernie Ecclestone was accused of paying a bribe to was a member of BayernLB’s management board [Vorstand], not supervisory board [Verwaltungsrat].

In its 07 Aug 2013 announcement in the ongoing discussion about whom to prosecute at BayernLB, the Munich Landgericht noted that this sale of banks between state governments was partially a political act. But because no one could have foreseen events, the Munich Landgericht was only going to look into the BayernLB management board’s criminal culpability in overpayment of an additional 75 million euros lost by subsequently purchasing additional shares, and not into the BayernLB management board’s overpayment of 550 million euros in the 1.7-billion-euro deal as the prosecutors originally proposed.

Prosecutors filed a complaint about the Landgericht’s decision not to allow a criminal trial against the BayernLB management board for the lost half billion; the Munich higher regional court [Oberlandesgericht] “will now have to decide the dispute taking place in its own house.”

Before Bavaria bought it, according to the Guardian.co.uk, the Carinthian state government-owned Hypo Alpe Adria “acted as financier” for the horrifying Jörg Haider, charismatic leader of a terrifying populist racist Austrian political party that promoted hatreds in order to surf them to power. WienerTageszeitung.at wrote that HGAA had had to help support Haider’s Carinthian state government’s “patronage policies” [“gönnerhafte Politik”]. The recent Munich Landgericht I court decision about how to prosecute the Bavarian side did allow prosecution of an accusation that Jörg Haider, Kärntner Landeshauptmann [“Captain of Carinthia”] at the time of the sale, received a soccer stadium sponsorship bribe from BayernLB (2.5 million euros). An Austrian website also talked about overpayment for the expert opinion of an Austrian tax adviser associated with Haider as another possible bribe to him from the deal (6 million euros for six pages). No details found yet about money improperly funneled to Haider & Co. before the sale, when his party controlled the government that owned the bank.

According to the Manager-Magazin.de article, a 2007 audit by the Österreichische Nationalbank [Austrian National Bank] reported that Hypo Alpe Adria was shuffling fake capital around as early as spring 2006 to hide its losses, through obscurant Liechtenstein entities, and selling stock to itself to create the illusion of solvency. There was no Austrian regulatory follow-up on the audit report apparently.

BayernLB’s purchase of HGAA has already sparked multiple trials, with more to come. For example, Manager-Magazin.de wrote that Munich prosecutors initiated a criminal trial against BayernLB management board members on 05 May 2011—that trial hasn’t started yet—and BayernLB sued its former management board members for 200 million euros in damages in a civil trial that actually did start, on 19 Jun 2012. An Austrian criminal trial sentenced a Carinthian state party chief to five years in prison on 10 Oct 2012 for diverting money from the sale to his political party (a state government coalition partner with Jörg Haider’s FPÖ). The current head of the Bavarian C.S.U. party, Horst Seehofer, is to testify in Vienna before a commercial court [Handelsgericht Wien] about the schlamassel. When they gave Hypo Alpe Adria back to the country of Austria, did BayernLB sign a paper saying they would not sue for damages? The Vienna trial is about 3 billion euros of Bavarian taxpayer money that now-nationalized Hypo Alpe Adria does not want to return; this would be in addition to the 3.7 billion euros Bavaria already spent to bail out the bank.

Update on 24 Oct 2013: Bavarian prosecutors won their appeal! The Munich Oberlandesgericht overturned the Munich Landgericht’s decision and will be allowing full prosecution of ex-C.E.O. Werner Schmidt and six of the seven members of the BayernLB management board on the counts sought, for breach-of-trust losses of 550 million euros in the 2007 purchase of Hypo Alpe Adria in addition to the 75 million lost on extra HGAA stock bought after the purchase.

Update on 27 Feb 2014: Three former management board members of Hypo Alpe Adria were given prison sentences by an Austrian court for granting investors buy-back guarantees and thus, the court said, costing the bank several million euros. The Klagenfurt court [Schöffensenat] said they held back important information when they sold Hypo Alpe Adria to Bavarian state bank BayernLB. A 2.5-million-euro dividend they issued was also not in order, the court said.

In this breach of trust trial, former management board member Josef Kircher was sentenced to three years, some of which was changed to probation because he was willing to testify. Former management board member Siegfried Grigg was sentenced to three and a half years. The Flick Foundation was fined 600,000 euros. Former H.A.A. C.E.O. Wolfgang Kulterer was sentenced to one year. He has already been sentenced to several years in a related Hypo Alpe Adria matter in January 2014, when he admitted having kept mumm about side agreements. Former Hypo manager Tilo Berlin is also a defendent in the breach of trust trial but was unable to appear for health reasons, delaying resolution.

(ON clog ah beh HEARD ah.)

Mit Steuermitteln geförderte Dopingforschung

Taxpayer-funded performance-enhancing-drug research.

In 2011 historians from Humboldt and Münster universities finished an 800-page report called “Doping in Germany from 1950 to the present” that remained unpublished supposedly because of data privacy concerns for the many West Germans named in it. It found that a West German institute called the Bundesinstitut für Sportwissenschaft (“German Institute for Sports Science,” B.I.Sp.), founded in 1970, systematically with politician support researched performance-enhancing substances. At the time the researchers said they were trying to prove substances did not enhance performance, but when they found one that did it was then widely administered to West German athletes. The sports medicine physicians conducting the human experiments and administering the substances to athletes said West German politicians explicitly wanted this. This was not a reaction to East German doping; it was done in parallel, starting as far back as the 1950’s even before the East-West Germany conflict, according to sport historian professor and pundit Giselher Spitzer.

Athletes were not told about side effects. The substances were given to children, “to test age effects.” Pro soccer players doped too (pervitin and then amphetamines), though apparently there were few sports not involved. Epo experiments were done as early as 1988. The scientists worked with national sports groups to help doped athletes elude capture in competition testing. Sponsoring money for the performance-enhancement research was considerable, flowing from the West German government and from private sports associations mostly to the Freiburg university hospital but also to sports medicine centers in Cologne and other cities.

The Humboldt University sports history study was ordered by the Bundesinstitut für Sportwissenschaften (B.I.Sp.) and sponsored by the Deutscher Olympischer SportBund. Its findings were kept unpublished for two years. After an 03 Aug 2013 Süddeutsche Zeitung article about the report a spokesperson for the Deutscher Olympischer SportBund said the failure to publish and resulting ongoing exclusion from public discussion and review was the researchers’ decision. On 05 Aug 2013 the B.I.Sp. finally published it and apparently Hans-Peter Friedrich (C.S.U.)’s Interior Ministry, which the B.I.Sp. is still a part of, also released it.

What we still don’t know: Before the evaluation, many important files were apparently shredded. Files requested in 1991 from B.I.Sp. to use to answer a parliamentary inquiry from the S.P.D. party turned out to have been destroyed, for example (and apparently the B.I.Sp. started the Humboldt University research project at about the same time??). Not all the relevant original files were apparently registered in a-or-the federal archive [“Bundesarchiv“?], so historians will be unable to find them there due to that library guerrilla move. The Deutscher Fussball-Bund reportedly set unacceptable conditions for access to its archives, so information they contain did not flow into the study. Joseph Blätter’s international soccer organization Fifa only recently (2011) stopped destroying World Cup soccer players’ test samples only three months after collection. People are upset that anonymity and lack of prosecution have been apparently enjoyed by West German sinners but not East German. The study was sponsored to investigate only up until the year 1990. Apparently the published version is missing several hundred pages.

Solutions: Justice ministers from several German states are demanding a federal-level anti-doping law making the use of banned performance-enhancing drugs a criminal offense; this has been under discussion for years now. The president of the Deutscher Leichtathletik-Verband called for more such research to prevent all West German athletes from that era from being suspected of having illegally taken performance-enhancing drugs. Also, as news anchor Claus Kleber pointed out, because the actors have never admitted culpability we can’t know whether the unethical practices were stopped. They might still be going on today.

(Mitt   SHTOY ah mitt ellll n   geh FUR dirt teh   DOPINGK for shoong.)

Das SIGAD-Sharing

Signals intelligence activity designator sharing, i.e. data-collection-site data sharing between intelligence agencies from different countries.

Germany: Spiegel and Süddeutsche Zeitung reported that the German foreign intelligence agency, the Bundesnachrichtendienst or B.N.D., has been sharing on a massive scale communications data collected at e.g. its Bavarian Bad Aibling S.I.G.A.D. site with the U.S.A.’s National Security Agency. The data include mobile phone numbers that the B.N.D. admitted they’ve been passing on to the N.S.A. for years now supposedly under the strict condition that said phone numbers must not be used to kill people (e.g. via phone towers triangulation + drone strike); the B.N.D. also denied that it’s technologically possible to use for location purposes the G.S.M. mobile phone numbers they’ve been passing on (“G.S.M.-Mobilfunknummern sind für eine zielgenaue Lokalisierung nicht geeignet”). The German foreign intelligence agency furthermore is said to have given software it developed to the N.S.A. And the N.S.A. gave the B.N.D. its X-Keyscore software and X-Keyscore software training, including in “behavior detection.”

In an interesting parallel, the Washington Post report on 15 Aug 2013 about an audit of just a few N.S.A. branch offices which found thousands of violations of U.S. privacy rules each year also included a similarly scarcely credible excuse saying phone technology limitations were keeping the N.S.A. from snooping more: “One major problem is largely unpreventable, the audit says, because current operations rely on technology that cannot quickly determine whether a foreign mobile phone has entered the United States.”

England: The N.S.A. has apparently been paying money, such as 100 million pounds, to Britain’s G.C.H.Q., a disproportionately über-representational intelligence-gathering partner for a country of that size. The N.S.A. receives so much communications data from the U.K. that reporters said “it’s almost the same thing” whether G.C.H.Q. or the N.S.A. initially collects it.

(Doss   ZIG odd   CHER ingk.)

“Der Letzte seines Standes”

“The Last of Their Guild,” an excellent show by the Bavarian Broadcasting Channel (BR). Just as the future is here, but not evenly distributed, so is the past still here in surprising ways. The few episodes I saw captured craftsmanship traditions, obsolete and obsolescing technology, old things being preserved by traditions, old things being preserved by new purposes being found for them and giving them new usefulness, and surviving traces of central Europe’s medieval self-limiting labor organizations. By interviewing the people and filming their workshops and methods, they showed viewers the nuts and bolts of a thrilling variety of old jobs, including barrel makers, wheelwrights, and of course the great one about the guy who still braids buggy whips.

Episodes may include working windmills and water wheels.

(Dare   LET stah   z eye n ess   SHTOND ess.)

Volksbegehren gegen Studiengebühren

“Referendum against tuition fees.” The states run the universities in Germany. Usually they charge very low tuition fees by US standards or university is free and students just have to pay registration and student union fees and buy subsidized cheap universal health insurance (includes dental and medicine). After some states experimented with introducing tuition fees in the 1990’s, almost all the states unintroduced them except Bavaria and Lower Saxony. In 2012, Bavarian citizens collected the 25,000 signatures required for a referendum to let people vote directly to eliminate college tuition throughout the state.

Though Bavarians have the Volksbegehren option, it’s hard to pass a referendum in practice. In 1968 the Bavarian state parliament (Landtag) made conditions for passing direct referenda much tougher, reducing the time frame from four weeks to two, banning public solicitation of signatures in the street or door-to-door, while requiring signatures of 10% of all registered voters for passage and, writes Hans Herbert von Arnim, making mail-in ballots much more difficult [von Arnim, Die Selbstbediener, pp. 162–3].

Before the voters had a chance to decide on the anti-tuition referendum however, Bavaria’s Interior Ministry (CSU) filed a complaint against it with the Bavarian constitutional court or Verfassungsgerichtshof in Munich saying the referendum was unconstitutional because it would affect Bavaria’s budget. The Bavarian constitutional court has interpreted the state’s so-called “budget caveat” or Haushaltsvorbehalt to mean that referenda that would cost money, i.e. most of them, can be kept from a vote if they will impact the state budget in a way that isn’t slight [von Arnim, p. 173].

Bavaria’s supreme or constitutional court is a bit unusual in Germany [von Arnim, p. 27] and possibly one reason voters might be glad to have a direct referendum option. Federal German constitutional court judges have to be elected by a 2/3 parliamentary majority, to prevent judiciary dominance by one party; they have a 12-year term; and they cannot be reelected. Bavarian constitutional court judges have been mainly elected by the CSU party, because it has governed the state since 1946; they have an eight-year term; and they can be reelected an unlimited number of times.

In October 2012, the Bavarian constitutional court decided eliminating college tuition would not affect the state budget and allowed the referendum to proceed. In January 2013 the referendum passed with over 1.3 million signatures. In response, the Bavarian Landtag or state parliament quickly passed a law eliminating college tuition on 24 Apr 2013.

(FOKES beg AIR en   GAY gen   SHTOO dee en geh BOO ren.)

Borussia Dortmund vs. Bayern München

Soccer match this coming Saturday in Wembley. Some kind of final.

Auf dem reichen Auge blind

Blind in the rich eye,” a punning headline for a Zeit article about Bayern Munich soccer club president Uli Hoeneß that reminded readers Bavaria is the state with the least number of tax auditors per capita and the least number of audits per auditor (29 audits per 100,000 taxpayers in 2011). Taxes are still collected state-by-state in Germany, not by a central federal office like the USA’s IRS.

“Steep theses,” “sometimes tending toward polemics” this review said but also that the 2013 book Die Selbstbediener: Wie Bayerische Politiker sich den Staat zur Beute machen (“Serving themselves: How Bavarian politicians make the state their booty”) by Speyer professor Hans Herbert von Arnim started the recent discussion about the Bavarian CSU party (which has monopolized their state gubmint for fifty years and is also the only state party to join national-level ruling coalitions, such as Angela Merkel’s current government CDU/CSU + FDP). People are still shocked by the 500 million euros recently discovered in Uli Hoeneß’s Swiss bank accounts and by the number of Bavarian MP’s (17, no 30, no 79) subsequently discovered to have taken advantage of loopholes in a 2000 nepotism law to hire their relatives at government expense. Von Arnim says the nepotism is just the tip of the iceberg for upcoming Bavarian parliamentary scandals.

Other emerging facts that shocked this week included: that the Bavarian state parliament members (CSU monopoly) complained loudest about southern European countries takin’ all our money yet paid themselves the highest income of all the German state MP’s, at 10,200 euros/month before taxes. Von Arnim says this is possible because of a lack of transparency in Bavarian state budgeting which other German states have deliberately prevented by passing separate rules governing important financial issues such as legislator compensation. He criticizes insufficient transparency and controlling in Bavaria’s very large budget, which is the size of several other German states’ combined.

How can corruption like this happen? Recent angry op-eds said the newly discovered nepotistic politicians aren’t exactly Raffke (Berlin slang from ~1920 for a greedy grabber) but that after a party is in power for a long time its members’ mentality can shift. Politicians in the party no longer orient their moral sense on what’s right and wrong, but instead on what the other politicians are doing and, eventually, toward what’s possible. Politicians in other parties of the monopolized government begin to think the same way as well. So far the only party in the Bavarian parliament not discovered to have employed family members after 2000 is the FDP, which wasn’t in the state parliament because it lacked the votes.

(Ow! f   dame   REICH en   ow! ga    blinned.)

 

Fantastillionen

“Lots of money,” an “unimaginable fortune,” but no one knows how much yet. The Münchener Abendzeitung reported reports, firmly denied, of account balances totalling several hundred million euros. Uli Hoeneß, the president of German soccer’s version of the NY Yankees, FC Bayern Munich, submitted a Selbstanzeige in January 2013 for unpaid taxes on funds in one or more Swiss bank accounts and has already paid an initial lump sum of about six million in unpaid taxes. He said he didn’t report himself before January 2013 because he was betting the tax agreement with Switzerland would be ratified that provided amnesty, anonymity and a low tax rate for “tax sinners.” Tagesschau.de reports that it’s still unclear where the untaxed monies came from, whether from his bratwurst factory or from other sources.

ZDF heute journal found footage of Hoeneß on talk shows such as the charming Günther Jauch’s in autumn 2012 recommending low taxes for rich Germans because otherwise, he said, they would move to Austria, Switzerland or “who knows where.”

CSU chair Horst Seehofer confirmed on Saturday, 20 Apr 2013, at a CSU meeting in a Munich Hofbräuhaus cellar, that the district attorney was looking into the matter. The CSU had been going to propose Hoeneß as a political candidate, and he probably would have been confirmed.

The Münchener Abendzeitung commented on 20 Apr 2013:

“The question remains whether Hoeneß can now hope for the same support from the Bavarian state government as Franz Beckenbauer, to whom Bavarian finance minister Ludwig Huber once gave tips about tax flight into Switzerland while Huber was still in office?”

Achtung: Focus Magazin’s publisher is on the board of FC Bayern Munich.

(FAHN tossed ill ee own en.)

Windhund-Verfahren

“Greyhound method” for first-come-first-serve allocation of press seats in the small state courtroom where the last surviving member of the neonazi serial-killing terrorist cell will go on trial this month. The foreign press didn’t find out about signing up until half an hour after local journalists had gotten the last seat. There has been serious shouting, ernsthafte Diskussion and a rapid decision by the constitutional court in Karlsruhe, and now the trial has been delayed a couple weeks and seats will be redistributed.

(VIND hoond fer FAR en.)

Inländische Steueroasen

“Domestic tax oases” inside a country. The head of the largest opposition party to Chancellor Merkel’s government coalition has accused the states of Bavaria and Hesse of acting like tax paradises within Germany by hiring low numbers of tax officials, reducing tax auditing frequencies and bruiting that about in order to attract businesses. It’s probably no coincidence that Bavaria and Hesse recently filed a lawsuit seeking to break the decades-old post-WWII reconstruction “solidarity pact” in which German states that are doing well financially pay money to German states that are not.

US state Delaware was mentioned in a “Planet Money”-style ZDF report that said it has very low taxes, very business-friendly courts, 800,000 inhabitants and 900,000 companies and is where most of the world’s firms “organize their America business.”

(E’en LEND isch ah   SHTOY er oh OZ en.)

Zwiebelturm

“Onion tower,” the round domes on old towers in Russia, Bavaria and parts of the Austro-Hungarian empire.

(TSVEE bellll TOOR m.)

Rodelbahn

Sled slopes, for winter family vacations less expensive than skiing. Carefully banked 3-km sledding slopes have been built in Bavarian mountain villages, with padded walls on the curves and lights for night-time sledding. The wooden sleds look highly steerable. Villages are happy to have the tourism, with local entrepreneurs expanding their shop assortments.

(ROAD el bonn.)

Grossspenden

“Large donations,” in this case business donations to political parties exceeding 50,000 euros. Private donations to Germany’s political parties are low by U.S. standards and have been decreasing since 2002, though they still spike in election years. Of the reported large donations of this type from 2002 until 2012, 45.2% went to Angela Merkel’s CDU, 21.4% interestingly went to the CDU’s Bavarian sister party the CSU (a state party that manages to hold power at the national level), 17.0% to the FDP and 10.8% to the SPD. The Greens and Leftists are calling for reforms mandating that private political donations go to individuals and not parties, and capping them at 100,000 euros.

Update on 10 Aug 2013: The Bundestag published a list of Q1 + Q2 2013 “large donations” >50,000 euros by political party:
CDU 600,000 euros, SPD 290,000 euros; FDP 130,000 euros, and no large donations were listed for the Green party or Leftists (Die Linken).

The Bundestag website enables easy comparison to their large donation lists from previous years.
Q1 + Q2 2012: CDU 267,000 euros, CSU 141,000 euros, SPD 259,000; FDP 59,000 euros.

Update on 16 Oct 2013: Three major Bavarian Motor Werks [BMW] shareholders each made a large donation of ~200,000 euros to the C.D.U. party on 09 Oct 2013. The political donations were properly reported. However, at about the same time the German government (C.D.U./C.S.U. + a new coalition partner t.b.d.) made the unusual move of blocking stricter carbon dioxide standards for car exhaust under discussion in Brussels. The C.D.U. denied the two events were connected.

Update on 17 Oct 2013: The C.D.U.’s Bavarian state sister party the C.S.U. also received a relatively large large donation after the recent Bundestag campaign: half a million euros from the Bavarian Metal and Electronics Industry Association [Verband der Bayerischen Metall- und Elektroindustrie]. Süddeutsche.de reported that the C.S.U. received the donation on Tuesday, 15 Oct 2013, and reported it on Thursday, 17 Oct.

(GROSS shpen den.)

DeuBa

Syllabbreviation for the Deutsche Bank. Whose co-chief, Jürgen Fitschen, has apologized for phoning Hessian governor Volker Bouffier (CDU) after the Frankfurt district attorney’s 500-man razzia on 12/12 (but before the Munich district attorney’s 10-man razzia on 12/20, the latest Leo Kirch-related search of DeuBa premises) to complain that the Frankfurt district attorney’s 500-man razzia may have damaged the Deutsche Bank’s image. Fitschen’s phone call has been roundly condemned by German politicians in a [2011 Anglicism of the Year].

One expert has speculated that Fitschen fell on his sword so that duarch Anshu Jain can remain unfired. I’m wondering how the press learned about the phone call.

Süddeutsche Zeitung journalist Klaus Ott said the Deutsche Bank was warned by the Frankfurt D.A. last summer. “There was a sort of yellow card, a dark-yellow card, half a year ago, and the Deutsche Bank knew that if they didn’t cooperate there would be a search.”

Update on 03 Apr 2014: A blogger reviewing Michael Lewis’s new book on high-frequency trading mentioned an interesting relationship between the Securities and Exchange Commission, Deutsche Bank and the global financial crisis of 2008:

“The SEC’s head of enforcement, Robert Khuzami, was general counsel for the Americas for Deutsche Bank from 2004 to 2009. And who did Lewis reveal to be one of the biggest instigators of the subprime short and related CDO sales? Gregg Lippmann of Deutsche Bank, patient zero of this strategy. Any serious investigation of CDO malfeasance would implicate Khuzami.”
—Yves Smith

(Doy! Bah!)

Dividendenstripping

Dividend stripping.” A tax avoidance scheme the HypoVereinsBank is accused of, wherein they allegedly transferred customers’ stocks back and forth between German and foreign banks until it was unclear whether the Kapitalertragssteuer had been paid and then claimed more capital gains tax credits than were owed. Reuters and the Süddeutsche Zeitung reported that a single Frankfurt investor working with HVB and other banks was told he owed 124 million euros in tax for 2006–08 after the IRS-equivalent refused to accept his capital gains tax break from the scheme; he has been fighting in court since 2011 to get HVB to pay the tax bill. HVB and this investor split the profits 65% HVB, 35% investor. Wikipedia says dividend stripping lost its tax-law basis in 2000, Spiegel says it hasn’t been accepted by German tax authorities since 2007, and Süddeutsche Zeitung says since 2012.

Weird story about the HypoVereinsBank in Spiegel-Online on 30 Nov 2012: A guy accused his ex-wife and other HVB employees of large-scale tax avoidance schemes that moved money to Switzerland, was declared non compos mentis by the Bavarian justice system and has been locked up in a mental institution ever since (2006). The man probably was violent, but he may have been correct about the tax avoidance. He cited names and numbers when he blew the whistle to the Bavarian tax authority, but a judge who was not involved in that case called the tax office and told them not to investigate the bank because the whistleblower was crazy. The institutionalized whistleblower’s case was re-opened in 2013. He was set free  in the summer of 2013, after seven years of confinement. Laws committing people to mental institutions and keeping them there are going to be reformed as a result of his case. This started with an 05 Sep 2013 decision by the supreme court in Karlsruhe, the Bundesverfassungsgericht, which prioritized a review of the whistleblower’s case and announced failures of the various state courts and criteria that need to be met in future.

The Frankfurt district attorney’s HVB razzia last week found a trail leading to “a Swiss private bank.” Süddeutsche Zeitung says it is thought that Swiss banks will be a very fruitful place to investigate this German tax scandal. Deutsche Bank and UBS are now implicated as well.

Update on 16 Dec 2013: HSH Nordbank has been accused of dividend stripping.

(Dee veed END en shtrrrip pink.)

Bayrisches Paradox

“Bavarian paradox.” When the CSU says they’re against something but collaborates with it anyway. Peter Gauweiler (CSU) said in this ZDF interview that although the CSU co-governs the country of Germany, it understands itself as a pike in a carp pond because its ambitions are not focused on federal power but rather on power inside the state of Bavaria.

(BY rish ess   PAR a DOX.)

“Andere Journalisten stellen sich nicht so an.”

“Other journalists aren’t doing that.” “Other journalists aren’t taking that attitude.” Spiegel-Online reports that this was the CSU response in late May 2011 when asked for a written statement on the Bavarian government’s position in the ongoing German search for “final storage” (Endlager) locations for nuclear waste. At the time, the CSU indicated that Bavaria might reverse its position and become a candidate for permanent nuclear waste disposal. The state’s environmental ministry did not respond to Spiegel’s follow-up questions, even though the government “is legally obligated to provide information.” Finally, they agreed to a phone interview but no written statement, because “other journalists weren’t” demanding written statements. CSU party spokesperson Ulrike Strauß told der Spiegel that written statements weren’t normal.

Spiegel emailed Strauß their versions of her oral statements for her approval, and she called the top editors’ secretary (Sekretariat der Chefredaktion) to complain. Instead of the senior editors, the business editor returned her call, repeating that the magazine was going to insist on written quotes. Ultimately, nine days after Spiegel’s initial query on 23 May 2011, the state environmental minister announced that Bavaria would not be used for permanent nuclear waste disposal.

Spiegel goes on to report that, according to the Süddeutsche Zeitung, in March 2011 CSU spokesperson Ulrike Strauß phoned the Bayerischer Rundfunk (Bavarian {Public} Broadcasting, BR) news department to complain about a critical report about a CSU politician. The critical report was then replaced in subsequent news programs; it aired only once. BR says no pressure was exerted. Strauß says she acted entirely alone, on her own. The report in question was about environmental minister Markus Söder (CSU)’s contradictory statements before and after the Fukushima nuclear disaster regarding whether the Bavarian nuclear power plant Isar I was entirely safe. Before Fukushima it was safe. After, not so safe.

(ON derr eh   journaLIST en   SHTELL en   zichh   nichht   zoh   ON.)

Causa Strepp, Causa Horst Seehofer

“The Strepp Affair,” “The Case of Horst Seehofer.” The Bavarian state branch of Angela Merkel’s CDU party insists on remaining separate from the general CDU and calls itself the CSU. Horst Seehofer is in charge. The CSU has been posturing in national politics for an upcoming state election. Last Sunday, CSU spokesperson Hans Michael Strepp called the public broadcasting ZDF television station and said he’d heard they were going to broadcast a news report about the rival Bavarian SPD’s recent festive nomination of their top candidate, Christian Ude. Strepp told ZDF that neither the public broadcasting ARD nor the public broadcasting news and documentaries channel Phoenix was planning to report on the Bavarian SPD’s state convention and far be it from Strepp to want to tell them their business but he wanted to give them food for thought that there could be discussions afterward if ZDF went it alone. ZDF interpreted this as exerting influence and broadcast the report anyway. Then they broadcast a report about Strepp’s phone call.

At first, the CSU said nothing bad had happened. At noon on Thurs. 25 Oct 2012, Horst Seehofer announced that Spokesperson Strepp had resigned because Strepp had said he hadn’t exerted any influence on ZDF and the ZDF disagreed with that statement and Seehofer could not clarify this situation. The CSU’s position is now that Strepp acted entirely alone. In a lively parliamentary discussion after Seehofer’s announcement of Strepp’s resignation, Bavarian M.P.’s cast a lot of aspersions. CSU General Secretary Alexander Dobrindt has now been dragged into it because he obfuscated rather than clarified and because people find it credible that he might have given Strepp the incredible order to make the call. The Bavarian SPD demanded that Seehofer and Dobrindt resign their seats on ZDF management boards (!).

German Green party member Jürgen Trittin has demanded that all politicians holding government office resign from public broadcasting channels’ supervisory boards. Trittin said the Greens have been demanding this for years, and that a gray zone forms where government and media entangle. Trittin also said this is what you get when people have been in power longer than Fidel Castro.

(COW zah   SHTREP,   COW zah   Horst   ZAY hoaf er.)

Fassanstich

Barrel poke,” “barrel sting.” When a Bavarian politician ceremoniously taps a large barrel of beer with as few hammer blows as possible to open Oktoberfest. The traditional 1-liter glass of beer will cost up to 9.5 euros at this year’s Oktoberfest.

(FOSS on shtick.)

Bundesnachrichtendienst, BND

“Federal news service,” the German foreign intelligence agency. Wikipedia said maybe 6500 employees, with maybe 100 domestic offices (of which ~70 have been captured by Bavaria, i.e. Merkel’s Texan sister party the CSU) and perhaps 100 offices abroad. In 2011 the domestic German offices were all supposed to move to new premises in Berlin, but the CSU managed to wrangle some remaining presence in Bavaria.

The predecessor “Gehlen organization,” formed in 1945 in a hurry by the Allies under Wehrmacht spymaster Reinhard Gehlen, became the BND in 1956 but no law was created regulating it until 1990.

There has been an interesting tango between the BND and renowned historians for the past few years, in which historians with good reputations have been invited to view the BND’s records and write up its history but were then ultimately blocked from doing so.

(BOON dess NOCK rick ten DEENST.)

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