German banker’s diaries add to Olaf Scholz’s political woes


When the co-owner of one of Germany’s oldest private banks discreetly lobbied Olaf Scholz over a tax issue in 2016, he was acutely aware of the risks for the German politician.

“I don’t want to bring shame on him in any way,” Christian Olearius, chair of MM Warburg, noted in his diary in October 2016.

At the time, Scholz was the mayor of Hamburg and Olearius had met him to plead for tax forgiveness, according to an indictment against the banker seen by the Financial Times.

Yet for all his efforts to shield Scholz, the banker’s diaries are proving politically explosive for the German chancellor. Seized by prosecutors and cited extensively in the case against Olearius for tax offences, they are a written record of meetings that Scholz insists he cannot recall.

The trial, which started in September in Bonn and is due to last well into next year, could unearth further compromising details as the chancellor grapples with coalition infighting, low public support and a worsening economy in Europe’s powerhouse.

The 371-page indictment against Olearius mentions the chancellor 28 times. Prosecutors also point out that the 81-year-old banker made a €13,000 donation to Scholz’s party during his lobbying campaign. Weeks after two meetings between Olearius and Scholz in late 2016, Hamburg’s tax authority abruptly changed its view and dropped a €47mn claim Warburg was supposed to pay.

Scholz has repeatedly said he cannot remember what he discussed with Olearius. He is adamant that he did not interfere at all with the city tax authority’s decision in favour of the bank.

Christian Olearius stands next to his lawyer
The seized diaries of banker Christian Olearius, right, are proving politically explosive for the German chancellor © Thomas Banneyer/picture-alliance/dpa/AP Images

A spokesperson for the German chancellor’s office declined to comment.

Cologne prosecutors, who raided Hamburg’s tax authority twice, said there was not enough evidence to name Scholz a suspect in their investigation into the matter. They are instead targeting a senior tax official who was in charge of dealing with Warburg and responsible for the lenient decisions.

Yet a number of red flags that include the sequence of events, missing documents and an inaccurate public statement by Hamburg authorities have cast doubts over what really happened behind the scenes.

When Olearius made his case to Scholz in person, the politician “listened attentively and asked smart questions”, the banker wrote in his diary. He also noted that Scholz “did not promise anything” and “did not indicate if and how he may act”. However, Scholz told him he “expected” the banker to remain in touch over the tax issue, assuring him his door was always open.

During a second meeting, Olearius handed Scholz a draft document outlining the bank’s arguments, according to the diary. A few days later, Scholz called him and suggested sending the document to Hamburg’s finance senator, without adding any additional personal comments.

Olearius did so, and the finance senator subsequently forwarded the document to the officials working on the case. In a handwritten note, which was uncovered by prosecutors, the finance senator requested an update on the “state of affairs”.

Days later, the tax office changed its view in favour of Warburg, dropping its claim for €47mn in what it had previously described as illicit tax refunds received by the bank. The finance senator Scholz suggested getting in touch with was briefed about the decision, according to the indictment.

Olaf Scholz
Olaf Scholz, pictured in 2014, says he has no memory of meetings detailed in the diaries © Carmen Jaspersen/picture-alliance/dpa/AP Images

“It is pretty clear that a wealthy banker successfully influenced public decision making in his favour,” said Gerhard Schick, a former Green MP and head of Finanzwende, a financial reform lobby group, adding that policymakers later also tried to derail inquiries into the matter.

“What is at stake here is a very fundamental principle: the rule of law in a democratic society.” Scholz’s vast memory gaps were “implausible”, he added.

What makes the scandal particularly toxic is the fact that the tax refunds Hamburg had changed its mind about were linked to controversial share-swapping deals dubbed cum-ex. Named after the Latin term for “with” and “without”, these transactions exploited a design flaw in the German tax code. Participants, including Warburg, tricked tax authorities into refunding dividend tax that was never paid in the first place.

Olearius claims he thought the transactions were legal. He denies any wrongdoing and has so far not addressed his interactions with Scholz in court.

His apparent lobbying campaign did not pay off in the end. He and Warburg lost a series of lawsuits, including at the Federal Court of Justice, which ruled that cum-ex was a tax fraud scheme. Since early 2020, Warburg has paid back a total of €250mn to the tax authorities. In a statement on its website, the bank conceded that “the tax assessments of cum-ex transactions by Warburg group has turned out to be wrong”.

Cum-ex has become a full-blown political scandal since 2021, when it emerged that Hamburg authorities had failed to disclose the meetings between Scholz and Olearius. Asked in 2019 by the hard-left Die Linke party in the city state’s parliament if there were any discussions between the senate and the bank over the tax issue, and if Scholz may have been involved, the local government responded: “No”.

By then, Scholz had moved on to serve as minister of finance in the past government led by Angela Merkel. He was elected chancellor in 2021.

Asked about the misleading answer, Hamburg’s senate told the FT that it “did not make inaccurate statements”, arguing that the questions had a narrow focus.

“Hamburg’s government never provided a convincing explanation for the wrong answer,” said Fabio De Masi, a former Die Linke MP and anti-corruption campaigner.

“All boundaries have been breached in this case,” De Masi told the FT, adding that “no citizen is entitled to haggle about his tax bill with politicians, let alone if it is about the loot from a tax fraud”.

The banker’s diaries outline that even the tax official who was in charge of the matter recommended the bank “seek political support” in the summer of 2016. Olearius also describes how a former senior Hamburg politician and Social Democrat, who had become paid adviser for Warburg, reached out to Scholz ahead of the banker’s meetings with the mayor.

According to the diaries, the adviser then told Olearius that “[Scholz] is looking into the matter”. After the tax decision in 2016, the adviser told Olearius that he was partly responsible for the positive turn.

In 2017, Hamburg indicated it was willing to waive another €57mn tax claim against Warburg. That was prevented, at the last minute, by a rare intervention by the finance ministry in Berlin. The federal government later also shot down a deal between Hamburg’s tax authority and Warburg that would have reduced its total tax bill by €124mn.

Over several years, Hamburg’s tax authority was “suspiciously willing to factor in MM Warburg’s interests in its decision making”, Cologne criminal prosecutors alleged in separate documents seen by the FT. They also point out that Olearius listed several individuals in handwritten notes who needed to be thanked after the decision. That list included Scholz, plus a tick behind his name.

After raiding Hamburg’s tax authority, prosecutors were surprised to discover a suspicious shortage of email communication about the Warburg case between officials. “For a tax issue with this scope and explosive power, significantly more documents and correspondence would be expected,” they noted.

They also noticed other apparent inconsistencies: while few emails about cum-ex and Warburg existed, a number of meetings about the topic took place, as diary entries showed. All this, and other circumstantial evidence could point to a “selective deletion” of data before the raid, the prosecutors argue.

The opposition Christian Democrats want to investigate the events in Hamburg as part of a parliamentary inquiry. But the Scholz government shot down a motion to set up a dedicated committee on procedural grounds, and the opposition has now filed an appeal to the constitutional court.

“One key question is if there was political interference into the decision making of Hamburg’s tax authorities, another is the chancellor’s credibility,” said Matthias Hauer, a conservative MP poised to head the potential parliamentary inquiry. “Scholz potentially gave inaccurate accounts to the public and to the parliament.”

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