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Data leak at the state? Public Prosecutor Volp is upset about FIU in communication with Deutsche Bank

Veröffentlicht in Investigativjournalismus, Polemik. Schlagwörter: , , , , , , , .

The editors of Laemmergeier.info would like to submit this translation of an essay from March 2021 with another proposal for a doctoral thesis (proposal 1 can be found here) – prefixed as an introduction -, after I was indirectly assured that this blog can be considered an honorary master of sociology:
The issue of money laundering is a rather boring topic, one that probably should be approached with less polemic. Nevertheless, with the current state of the economy (cf. wage-productivity gap, housing price inflation) and financialization, it is difficult to keep the necessary analytical distance. In principle, the topic should be of burning interest to every radical leftist:
Follow the money.
Nevertheless, my texts were not very well received by the Rote Hilfe. This may be due to many reasons: the implicit connection of the FIU to the War on Terror and the surveillance state, which bitterly offends the anarchist and anti-Leninist milieu, or the question of who is actually being busted? The super-rich have dubious advisors who layer their money so well that it can no longer be researched. Amateurs who, as recipients of ALG II, deposit more than 10,000 euros in cash, are busted. In other words: the petty criminal proletariat, to which the members of the Rote Hilfe themselves belong.
Be that as it may, Laemmergeier.info is convinced that this dry topic deserves more attention. In order to dare the thematic closing of ranks with the ZOLL (it is a little bit funny) one must not necessarily regress into the Leninist class struggle left, or make a conservative turn. It is true that this article shows that there is a certain imbalance between thousands of Complaince employees in trust and banks and a few dozen FIU officers in the Netherlands and a few hundred in Germany, and from this the necessary conclusion could be drawn to increase the manpower of the FIUs, i.e. the police. This short-sighted conclusion is certainly correct as a short-term solution, but it would immediately be accused of reformism.
Laemmergeier.info would therefore be interested in a deeper analysis of the money laundering phenomenon. The imbalance between state FIU and private-sector compliance could perhaps be solved by a kind of employee swap, paid for by the financial industry. However, this does not solve the problem. A doctoral thesis on money laundering in the spirit of critical theory would therefore have to ask the following questions:
How, why and since when is it actually possible that money is hidden in complex corporate structures?
Historically and from the logic of capital accumulation.
Keyword: Banking secrecy in Switzerland etc. and anonymous company/holding-structures on some Caribbean islands pp., which claim they can not survive without this business.
Every few jubilee years, big banks meet in Switzerland for a conference and accuse the „state of capital“ (Agnoli) of this very thing:
You had the power to dry up tax havens and anonymity ports (corporate structures and banks) through international pressure and cooperation, instead you let them exist and let us found expensive compliance departments, whose reports nobody reads anyway due to lack of FIU officials.
To be honest:
It is indeed a humanly pointless profession to investigate whether company structures only exist to legally save taxes in an immoral gray area, or whether terrorist financing, tax evasion or money laundering takes place just because the various sovereigns in the competition for capital do not fight the conditions for these anonymity structures:
„It is mentally and morally injurious to man to do anything in which he does not find pleasure, and many forms of labour are quite pleasureless activities, and should be regarded as such. To sweep a slushy crossing for eight hours, on a day when the east wind is blowing is a disgusting occupation. To sweep it with mental, moral, or physical dignity seems to me to be impossible. To sweep it with joy would be appalling. Man is made for something better than disturbing dirt.“ (Oscar Wilde)
In fact, it is true: in other areas sanctions are the appropriate means, but as soon as it comes to money ($$$), the white-collar criminals of the West fear for the collapse of the system. In the spirit of class-strugle it could now be asked: cui bono or honi mal y pense.
A value-critical analysis, on the other and better hand, would rather point to short-sighted lobbying of big companies and their systemic-driven profit pressure. Capitalism is anarchic. Just as individual companies fight against each other, so do states compete for the inflow of capital. If Switzerland introduces tougher regulations, capital will flow to Delaware. Even the Netherlands or Great Britain are only slowly starting to crack down care on their problematic tax avoidance models (Side-note: What is the business model of Trusts? It is a ridiculous scam in front of our eyes). Such a systematic analysis would be worth writing. After all, we live in a system where rackets fight over the distribution of the surplus product maintained solely by quantitative easing. No matter if Hamas, Aliyev, corrupt CDU politicians, mafia groups, billionaires, or (with less class struggle rhetoric) multinational corporations. All of them are trying to hide massive amounts of money, while the middle class no longer benefits from the increase in productivity. Inflation (especially with regards to housing) and a subtle increase of working hours through home office is the lot of the Humans of Late Capitalism. Value critical, with less class struggle rhetoric, it would be interesting to determine how increasing financialization, tax and anonymity havens, and post-WWII fiat money are related not only historically but also logically/capital-productively – so: researched with an eye on the economics laws of movement of capital. The analytical framework could be provided by the concept of fictitious capital and the tendency of the rate of profit to fall, while historical reference points are certainly provided by Bretton Woods and the lifting of the gold standard in order to understand financialization and anonymization.

Interested in this PhD thesis? Call Laemmergeier.info!

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In the cozy Hessian countryside, the clocks are known to tick a little slower. When Chief Public Prosecutor Wittig was just downing a good cider in his favorite pub, i.e. had been „unavailable due to illness, „1 his deputy Public Prosecutor Volp had to respond to calls from Deutsche Bank. Unusually brusque for a Hessian, rather reminiscent of a Middle Franconian, he stated on record that „since the FIU […] the contact with the BKA and the authorities had also become worse“. Generally, he said, there was „poor cooperation.

In concrete terms, the work of the authority was of a „poor[n] quality“ (repetition error included in the original):
Mr. Prosecutor considered the special department of Customs, which was created out of thin air after the September 11 attacks, to be „advice-resist[ing].“ He also criticized „the FIU’s attitude of making demands of liable parties, but having structural problems itself.“ This probably refers to the small number of employees of 150-250 women – in view of the hundreds of thousands of money laundering suspicious activity reports to be processed by the various banks each year. Should these disclosures already be considered a data leak at the state?

The Zentralstelle für Finanztransaktionsuntersuchungen, or Financial Intelligence Unit (FIU), is responsible for evaluating banks‘ suspicious money laundering reports („SAR reports“). Its purpose is thus to analyze financial transactions that could be related to money laundering or terrorist financing.

Because money, like the Internet, is only explained to Germans via the Autobahn metaphor, the FIU was located in Directorate VIII – Customs Criminal Investigation Office.

In May 2019 alone, more than 36,000 notifications were not or not fully investigated. At the time, Zoll accused banks of delivering poor quality, which is not surprising given the temporary workers already mentioned on this blog. The number of money laundering suspicious activity reports had also increased. Journalists on talk shows, I think it was the FINCEN specialist from BuzzFeed News (Marcus Engert on the Phoenix round), subsequently became incensed:
The banks are intentionally sending too many reports to paralyze the FIU!

Marcus Engert when talking about Compliance Departments of Banks

Sure, and my Patreon account will have 1000€ booked tomorrow morning and a press card in the mailbox.

Be that as it may, if one thing has become clear, it is that Deutsche Bank is not interested in forwarding too many escalations to the FIU. Banks earn with the customer, not against the customer. It is true that the compliance department is not personally motivated by additional economic incentives, as are, for example, customer advisors, but here, too, only the „business“ counts. Plausibility pressure and a climate of fear keep poorly paid and unqualified temporary workers in place compared to the rest of the industry.
Why would banks want to overwhelm the FIU with reports, when in the end they would have to terminate the customer relationship?

The logic of some journalists will not be explained further here. It is not even up for debate, since investigative journalism has already revealed that Deutsche Bank, for example, is not too interested in sending too many money laundering reports to the FIU as soon as its analysis software has had a tiny glitch for three years.

Drepper
Dominik Drepper contacted compliance employees at Deutsche Bank via Linkedin in the fall of 2020.

In any case, the Osnabrück public prosecutor’s office has been investigating the FIU for obstruction of justice since February 2020. In addition, 100 suspicious activity reports about Wirecard were apparently forgotten in the mile-high pile, and they were only found in the digital filing cabinet after the scandal was uncovered and thus forwarded to the public prosecutor’s office when it was too late. Digital filing cabinet? At least (!) as recently as 2018, the FIU of North Rhine-Westphalia was still communicating with the prosecution authorities using the fax machine. The carrier pigeon was just „unavailable due to illness“.

Der Spiegel accused the link between the corruption of the CDU under Kohl as well as the corruption of the CDU under Merkel – Wolfgang Schäuble – of having stopped the FIU cold:
Too small budgets for too many tasks & fax machines for a few hundred colleagues.
Although the FIU has merely a filter function, it is supposed to forward only the relevant money laundering suspicious transaction reports to the public prosecutor’s office and the BKA, but at the same time it has no access to the corresponding delinquent databases of the law enforcement agencies. It must therefore assess transactions without being able to draw on information on the senders and recipients of the funds. There is probably not enough manpower for analysis, so that usually only the old bank report, which again was written by some quickly trained temporary employee, is forwarded to the public prosecutor’s office. In view of the Union’s current affairs, this was probably a sensible decision on the part of Kohl’s old bagman.

At the time, the FIU’s electronic system failed to function, working students outside North Rhine-Westphalia occasionally had to type fax messages into the computer systems. Hopefully, there were no investigative journalists among them. Another blog based on a data leak would no longer be internationally acceptable.

In order to prove once and for all that Germany is an open-air psychiatric hospital, according to prosecutor Volp, a „working group was set up that is interdisciplinary in nature with the participation of the supervisory authorities, the authorities, the judiciary and the private sector“. Allegedly, the aim was to try to „develop a customer-oriented solution.“

Deutsche Bank’s compliance analyst spotted the bug and added with an arrow:
„for inquiries about existing clients, this means that there is no absolute „noGo“ for a continuation/further development of the client relationship due to the case, but ultimately a conscientious KYC relationship should be maintained due to risk aspects.“

Speak:
We can’t process your reports right now, but just forward the money and pray three more Hail Marys in church on Sundays. After all, anyone who is willing to give banks „no absolute „no-go“ for a continuation/further development of the customer relationship“ on the basis of troublesome money laundering or terrorist financing suspicions does not need to be surprised by scandals like the one involving Wirecard, but must put up with the insinuation of a political calculation.
And who knows:
Maybe Andi B. Scheuert is expecting the first digital money suitcase2 from Gurbanguly Berdimuhamedow.

FIU
Deutsche Bank’s Internal Communications on Public Prosecutor Volp

1 The polemic against the unproductive civil servants and politicians is, of course, rhetorical calculation as well as political-theoretically truncated and corresponds more or less to what Neo-Marxists in the first semester would call truncated critique of capitalism.

2 Or a Dogecoin paper wallet by fax.