German politicians from across the political spectrum criticized Deutsche Bank co-CEO Juergen Fitschen on Monday following reports he had called a senior local politician to complain about a raid on the bank’s Frankfurt headquarters last week.
Mr. Fitschen and Stefan Krause, the bank’s chief financial officer, are among 25 employees being investigated on suspicion of tax evasion, money laundering and obstruction of justice over trade in carbon permits designed to combat global warming.
Images of armed police cordoning off its twin-tower head office in Germany’s financial capital were broadcast round the world on Wednesday, in a new public relations setback for a bank grappling with other legal headaches as well as major managerial and cultural change in the wake of the global banking crisis.
Government supporters said Mr. Fitschen thought himself “above the law” in complaining directly to the premier of Hesse, whose state includes Frankfurt. Opponents on the left called for more regulation and a spokesman for conservative Chancellor Angela Merkel declined comment on her opinion of Deutsche’s managers.
After some 500 tax inspectors, police and public prosecutors had descended on the offices of Germany’s biggest bank and homes of some of its staff, Mr. Fitschen telephoned Hesse premier Volker Bouffier, a member of Ms. Merkel’s Christian Democrats (CDU), to complain about the high-profile raid – even though the premier’s office was not directly responsible for overseeing the action.
Aides to Mr. Bouffier spoke of shock at the call, which Deutsche Bank confirmed took place but declined to describe in detail.
With a parliamentary election in nine months, parties are keen to show voters they are serious about cracking down on banks and bankers who are seen to have played fast and loose with the rules or to have committed outright crimes.
“Nobody in Germany is above the law. Mr. Fitschen is giving the impression that he hasn’t understood this,” Michael Meister, a senior CDU lawmaker told the Handelsblatt business newspaper.
Joachim Poss, deputy head of the parliamentary group of the opposition Social Democrats (SPD), said he was astonished by the series of legal problems at Deutsche Bank.
“With their behaviour, the banks are crying out every day for tougher regulations,” Mr. Poss told Reuters.
Juergen Trittin, leader of the environmentalist Greens party, used the colourful phrase “The fish stinks from the head down” to pin blame for Deutsche’s problems on its leadership.
Asked on Monday whether Ms. Merkel supported that leadership, her spokesman Steffen Seibert declined direct comment. He said the government was following the continuing investigations.
The senior management is new, though not new to the bank itself. Mr. Fitschen, a 25-year veteran at Deutsche, and Anshu Jain, the former head of its investment banking arm, took over as co-chief executives in June, succeeding Josef Ackermann, the Swiss banker who had led Deutsche for a decade.
In the face of legal problems and a tougher regulatory environment, the new duo have pledged to end a risk-taking culture focused on short-term gains. Within three months of taking control, they announced cuts to bonuses and jobs, as well as asset sales to meet more stringent capital rules.
But the new leaders are finding themselves haunted by the sins of the past. Mr. Fitschen and CFO Mr. Krause are targets of the carbon probe, which saw five employees arrested for their roles in signing off on the bank’s 2009 tax return. Deutsche later corrected the return, but authorities say that came too late.
A day after tax inspectors had hauled backpacks and suitcases from the Deutsche towers, the bank told investors to expect significant new charges in its fourth-quarter results.
In a new blow the next day, the bank was ordered to pay damages in a decade-old suit brought by late media mogul Leo Kirch, who accused it of damaging his standing with creditors.
Deutsche is also dealing with allegations in Britain and the United States that it was among those complicit in manipulating Libor interest rate benchmarks and had mis-sold subprime assets during the 2007-2009 global financial crisis.Report Typo/Error