German tax fraud prosecutor resigns in unexpected move
Anne Brorhilker, who led investigation into ‘cum-ex’ scandal, accuses judiciary of being too lenient on white-collar crime
The lead prosecutor in Germany’s most notorious tax fraud scandal has announced her immediate resignation, accusing the country’s judiciary of treating high-level white-collar criminals too leniently.
Anne Brorhilker announced on Monday that she was stepping from her role as head of a team of more than 30 prosecutors in Cologne working on the so-called cum-ex probe. The scheme, estimated to have cost German taxpayers more than €10bn, involved complex share-swapping deals used to reclaim dividend tax that was never paid.
“I’ve always put my heart and soul into my job as a criminal prosecutor, but I am not at all satisfied how white-collar crime is being pursued in Germany,” she told German public broadcaster WDR on Monday in an interview, adding that wealthy and well-connected culprits were often able to walk away with fines.
Brorhilker’s investigative work resulted in long prison terms for several senior bankers and lawyers. It also exposed political lobbying that led to questions over potentially illegal interference by German Chancellor Olaf Scholz during his time as mayor of Hamburg. Scholz has repeatedly denied any wrongdoing.
Brorhilker decided not to name Scholz as a suspect but launched a probe — which is continuing — into two of his political confidants and an employee of Hamburg’s tax authority.
Cologne criminal prosecutors are running investigations into about 1,700 suspects in this case, including former executives of Deutsche Bank and former senior lawyers at Freshfields.
On Monday, Brorhilker disclosed that she would join German consumer financial lobby group Finanzwende to head its financial crime unit. Gerhard Schick, a former Green MP who founded Finanzwende, said it was “encouraging” that a successful criminal prosecutor was joining the group, calling the move a “declaration of war against white-collar criminals and their supporters”.
Brorhilker has become known for her hard-nosed investigative approach as she refused to settle cases out of court and arranged for police to raid the headquarters of many well-known banks and professional services companies.
Due to the large number of individual cases and their complex nature, the investigations have been dragging on for years, causing criticism from lawyers who are representing defendants in the cum-ex saga.
Lawyers including those representing Christian Olearius, co-owner of one of Germany’s oldest and most prestigious private banks, MM Warburg, have accused Brorhilker of bias and questioned the sincerity of a lead witness who supported her investigations.
“We regard Anne Brorhilker’s resignation as a step towards the restoration of the rule of law in Germany,” a spokesman for Olearius, who is facing trial in Bonn, told the Financial Times on Monday.
Last year, North Rhine-Westphalia’s justice minister Benjamin Limbach planned to split Brorhilker’s team in two over concerns about the drawn-out process and the need to speed up the investigations. Those plans, however, triggered a public outcry as they were seen as an implicit demotion of Brorhilker. According to people familiar with the matter, she came close to resigning back then.
A spokesman for the Cologne public prosecution office said that Brorhilker’s decision came as a complete surprise. “We are deeply regretting her departure, as she was a highly determined prosecutor” and a key driver of the cum-ex investigations.
The prosecution office, however, remained “well-positioned” and would continue to focus on getting to the bottom of the multiyear tax fraud, he said.
The ministry of justice in North Rhine-Westphalia told the Financial Times that Brorhilker made “extraordinarily outstanding contributions” towards the criminal investigations into cum-ex, adding that her decision to step down was “regrettable”.
The ministry stressed that the state’s law enforcement authorities would not back down in prosecuting the tax fraud.