How Corrupt is Germany?

Once upon a time, Germany was regarded as a country whose government officials and companies operated with fairness and competence, and whose post-war economy was founded on principles of quality and honesty.

Until a few years ago, the country's media had little to say about political or industrial scandals. Now, however, the German newspapers are increasingly filled with stories on bribery and corruption.

Although few would consider Germany one of the world's most corrupt nations, it certainly no longer has its squeaky clean image of old. Two German institutions, a top-flight soccer club and the nation's railway company are the latest to make unwanted headlines.

For Deutsche Bahn, the state-backed rail operator, the trouble stems from alleged illegal payments possibly involving the company's Chief Executive Hartmut Mehdorn, who is currently being investigated for possible corruption by prosecutors in the German city of Neuruppin.

According to media reports, Deutsche Bahn offices across the country, including the company's headquarters in Berlin, were raided by police and officials from the prosecutor's office on Tuesday. The raids were part of an investigation into a contract between Deutsche Bahn and the German state of Brandenburg signed in 2002 which gives Deutsche Bahn control of the most lucrative rail lines in the state until 2012.

The ten-year contract, worth €1.92 billion ($2.35 billion), handed Deutsche Bahn subsidized passenger services on between 70 and 75 percent of rail lines in the state. The contract was negotiated by Mehdorn and Hartmut Meyer, who was the transport minister of Brandenburg at the time. Less than a year after the contract was signed, Meyer surprisingly quit his job at the ministry in September, 2003 after ten years in office. He has since become an adviser to Deutsche Bahn.

Investigators from the public prosecutor's office are looking into the possibility that the contract was not open to competitive bidding and whether illegal financial incentives were involved in the sealing of the deal. Meyer himself is now under investigation and his home and the office of his consulting firm "Short Cut" were also included in the sweep on Tuesday.

Deutsche Bahn spokesman Werner Klingberg rejected the possibility of corruption and said the company was cooperating with the investigation, according to a report in the Süddeutsche Zeitung newspaper on Wednesday.

Munich soccer corruption

The Deutsche Bahn scandal comes hot on the heels of the Munich soccer stadium affair. Last week, Karl-Heinz Wildmoser (photo), the president of German soccer club TSV 1860 Munich, was arrested on suspicion of taking bribes from a company that won the bid to build the new Allianz Arena, one of the showcase stadiums for the 2006 World Cup finals in Germany.

Wildmoser, his son and two others were accused of involvement in a shadowy exchange of sealed bids for the construction contract for the new arena and of participating in illegal payments for the information. Wildmoser was released on bail on Friday and resigned from his position as club president on Monday.

The recent spate of corruption scandals in Germany might surprise many who still think of the country as a clean and fair place to do business. However, Dr. Hansjörg Elshorst, the chairman of the German chapter of global watchdog Transparency International (TI), told DW-WORLD that the latest developments were unsurprising.

"Nobody knows if Germany is becoming more corrupt because (these scandals) are quite normal. Nobody thinks there are problems until major scandals break and grab everyone's attention," he said.

Middle of the table

Transparency International's own corruption perceptions table for 2003 actually shows that Germany is not particularly bad by international standards. The country occupies a middle ranking in the Berlin-based watchdog's rankings, however, the 2004 table may look a little different.

Elshorst (photo, right, with TI Chairman Peter Eigen) explained that the exposure of cases like the Munich affair showed that infrastructure was in place to combat corruption.

"We now have more tools to investigate corruption and more people to carry out investigations," he said. "On one particular day in the Munich investigation, there were 100 people working on the case. A few years back, there weren't even 100 investigators in Germany."

However, he added there was more to be done: "We've seen an increase in corruption between companies in Germany as firms find themselves under more pressure in sectors where there is less business. To stop this, we need more legislation, heavier punishments and fines to stop this.Transparency International will continue to push for these measures."