Germany’s corruption scandals: How to limit authoritarian influence in the EU

Germany’s recent corruption scandals are as much about the health of democracy in Germany and the EU as they are simply questions of money

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A series of corruption scandals has recently shaken Germany, leading to the resignation of several parliamentarians from the ruling Christian Democratic Union (CDU) and falling poll ratings for the party ahead of this September’s general election. Some of the MPs exposed had been taking financial payments from authoritarian regimes such as Azerbaijan and North Macedonia to lobby for them in both Berlin and Brussels. But, beyond revealing a shocking propensity for corruption by elected officials – which has been the principal recent focus of the German media – the affairs raise broader questions about authoritarian endeavours to exert influence in German and European politics.

A tight web of interests exists around relationships between some politicians from the two traditionally largest parties in Germany, on the one hand, and, on the other, authoritarian and kleptocratic regimes in Viktor Orban’s Hungary, Vladimir Putin’s Russia, and Ilham Aliyev’s Azerbaijan, to name just some. This can take the form of lucrative contracts for individual politicians, or via influence through party groups in the European Parliament. Whatever the vehicle of influence, autocrats from within and outside the European Union have long been able to exploit loopholes in German law and weak spots in financial oversight to water down European positions on democracy, the rule of law, and human rights.

One widespread practice is the use of dubious ‘consultancies’ affiliated with members of parliament and former top-level politicians. Fees received for such activities are generally uncapped, and there are no legal requirements for MPs to declare this income to the Bundestag. In many cases, parliamentarians engaged in such activity ran into trouble only if they sought to evade taxes.

One of the recent scandals includes revelations about payments made during the time in office of former Macedonian prime minister Nikola Gruevski. In 2016, Gruevski’s government hired a consultancy owned by MP Tobias Zech to reportedly organise meetings for the then prime minister in Berlin and Munich. This lobbying aimed to marshal political support for the regime prior to elections. It took place at a time when Gruevski’s government was already known to be responsible for mass democratic and human rights violations. It also happened in the aftermath of major scandals that exposed high levels of corruption and criminality in his government. One example from 2015 was the wiretapping of telephone conversations of 20,000 Macedonian journalists, politicians, and religious figures and political interference in the judiciary, media, and the administration.

Gruevski’s visits to Germany therefore gave an air of legitimacy to an autocrat; they could have undermined the efforts pursued at that time by the US government and the EU to facilitate democratic regime change and help put in place conditions for free and fair elections. The US and EU effort eventually paid off, leading to a democratic change of government and paving the way for the historic Prespa Agreement with Greece, which changed the country’s name and unblocked its NATO accession.

Other ways to acquire influence in Germany include setting up organisations such as the “environmental foundation” created by the federal state of Mecklenburg-Vorpommern to lobby for the completion of the Nord Stream 2 pipeline. Revelations around this foundation have stirred up a similar debate about the inadequacy of existing compliance and transparency rules. The foundation is de facto controlled by Gazprom, and promises both lucrative posts as well as financial resources to advocate the interests of the Russian state-owned company (and the Kremlin in general).

German politicians should move quickly to address this issue of ‘strategic corruption’

A further channel for illicit foreign influence exists in the form of top-level politicians moving easily from high-level government jobs to executive positions in corporations owned by authoritarian regimes. The poster-child for such influence is former German chancellor Gerhard Schroeder, who sits on the board of Russian oil company Rosneft, capitalising on his reputation as a highly regarded politician to promote controversial Russian state-sponsored projects.

Some former German politicians also run consultancies that make large sums introducing German business to political stakeholders in authoritarian countries themselves. Such cases include Social Democrat and former defence minister Rudolf Scharping’s facilitation of Germany-China business, and the consultancy of former East German prime minister Lothar de Maizière. The latter is an outspoken opponent of sanctions on Russia. Functionaries of the Petersburg Dialogue or the German-Russian Forum are particularly vocal advocates of Russian interests.

Similarly, the Germany-South Caucasus parliamentary exchange group seems to have been used by Azerbaijan to cultivate certain members of the Bundestag by providing them with travel, gifts, and other benefits. And, in the wake of a scandal surrounding Azeri payments to members of the Bundestag, further journalistic investigations revealed that interns with connections to the regime in Baku had over many years been placed with both CDU, SPD, and opposition party representatives in parliament, propagating regime interests. The Azeri regime has also financed a chair at Berlin’s well-known Humboldt University, whose occupant spreads the regime’s very own view on Southern Caucasus political affairs.

Finally, foreign politicians have been able to exercise considerable influence by trading favours in the EU institutions. Hungary’s prime minister has long defended the interests of German car manufacturers in the European Council in order to strengthen his ties to the CDU and its habitual coalition partner, the Christian Social Union. Critics say these ties are maintained in exchange for tolerance of increasing repression and democratic backsliding in Hungary by the European People’s Party (EPP) and specifically its group in the European Parliament. While Fidesz was suspended from the EPP in 2019, before leaving it for good in March 2021, the failure to act earlier has facilitated the process of democratic erosion in Hungary.

Had the EU moved to introduce Article 7 procedures (when a member state is breaching core principles such as democracy and human rights) against Hungary before 2015, Budapest could not have relied on the backing of Poland’s Law and Justice government after it returned to power that year. Such a move may have also deterred Law and Justice from emulating Orban.

Now the EU has a member state no longer considered a democracy, which not only tries to dilute the EU’s human rights policies, but also serves as a hub for Russian and Chinese influence in Europe. Today, in a similar manner, the EPP lends respectability to politicians inside the EU such as Slovenian prime minister Janez Jansa but also EPP politicians from outside the EU such as Serbian president Aleksandar Vucic, each of whom is responsible for presiding over democratic backsliding in their own countries.

These various channels of influence result not only in the diminution of the EU’s commitment to defending democracy abroad, they could equally be harmful for Germany. Ultimately, the impact of the recent CDU corruption scandals is that they undermines domestic trust in democracy.

While countries such as North Macedonia and Azerbaijan may have limited ability to affect German democracy, the same channels of influence can be used by more significant players such as China, Russia, the United Arab Emirates, and Saudi Arabia. These all try to influence Germany’s foreign policy positions and decisions about more purely domestic German matters. China’s lobbying for Huawei to participate in Germany’s 5G rollout is a case in point. While Huawei has mostly relied on German companies as proxies to lobby the government in Berlin, behind these efforts is a well-funded, EU-wide campaign bult on public events, Huawei-funded reports, and an aggressive media push on matters that ultimately affect Germany’s and the EU’s security interests.

Shutting down these avenues of corrupt foreign influence should be a matter of urgency; German politicians should move quickly to address this issue of ‘strategic corruption’. Mandatory transparency about activities undertaken on behalf of foreign governments should be the first step. This means not just introducing a lobby register – which was recently agreed in the German parliament – but also introducing full transparency requirements about the different types of activity that parliamentarians carry out on behalf of authoritarian governments. Here, a systematic stock-take of different lobbying channels and related risks is needed. In light of this, the Bundestag should commission an independent comprehensive study of the different routes for illicit foreign influence, on the basis of which it could devise a set of proposed solutions. If it does not start to take action soon, trust in democracy in Germany and beyond will suffer.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of its individual authors.

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