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Saturday 14 April 2018

How endemic is German corruption? - Europe's crooks trample on legality

The rise of German economic corruption appears to have two phases. From the turn of the new century to 2012 / 2015 low level economic corruption became endemic throughout Germany as German manufacturing and industry expanded output and sales. A change in German law in 1997 had allowed prosecutors to investigate corruption proactively - previously firms had to report themselves. However, authorities were also then starved of resources to investigate and bring corruption actions - in effect giving official German government approval to allow corruption to flourish. As a consequence of this official 'fair wind', industrial giant Siemens distributed over €400,000,000 of bribe money to secure bent deals around the world.

As the New York Times reported in 2007:
Wolfgang Schaupensteiner has never been so busy. From an office in central Frankfurt that is decorated with cartoons about corruption, Schaupensteiner has headed the tiny financial crime unit for this city, Germany's financial capital, since 1993. These days, his backlog of bribery, fraud and other white-collar crime cases runs into the hundreds, and he says he has a simple explanation for it.

Corporate profits have surged across sectors ranging from finance to autos to energy, as German executives have turned the country into one of the world's largest exporters over the last five years. Illicit dealings helped create their success, he asserts, and that in turn has encouraged many executives to believe that crime does pay.

On Wednesday, prosecutors in the southern city of Nuremburg raided multiple locations of the offices of Siemens, one of the country's most prominent companies, on suspicion that certain bribes may have been concealed as payments for services that were never provided. In recent months, DaimlerChrysler, BMW and Volkswagen have also been raided, put under investigation or even had employees taken into custody. "Globalization has become a motor for corruption in Germany," asserted Schaupensteiner, 58. "It creates dangerous potential if you do not control it."
More recently, in 2017 Ernst & Young investigated the extent to which corruption has become embedded and institutionalised within the German economy. This second phase roll out of German corruption proved as insidious as an invasion of Japanese knotweed, with crooked tentacles reaching into every crevice of German economic life. The rapid growth of online trading in Germany in the last five years has exacerbated the criminality - German firms trade corruptly and criminally with impunity on the internet as the German legal system provides few affordable remedies for their victims. And all this is done with the complicity and support of the German government.
A staggering 43 percent of German business executives polled by EY (formerly Ernst & Young) think bribery and corruption are fairly commonplace in Europe's economic powerhouse. That's a big jump from just 26 percent in 2015.
In Germany, 23 percent of the managers polled admit they would act in an "unethical manner" to move up the career ladder or secure higher salaries. Roughly 10 percent of German executives polled wouldn't rule out deliberately providing false information to others to help their own careers and fill their pockets.

"VW's emissions-cheating scam, the Libor rate-rigging scandal, and [unlawful] collusion among companies as well as a raft of compliance violations have made the headlines quite frequently of late," says Stefan Heissner, who heads EY's Fraud Investigation & Dispute Services division.

He adds that stricter compliance rules that have appeared in the wake of major corporate scandals have not really changed the perception of widespread corruption in Germany.
Whilst Germany is not alone in seeing a rise in economic corruption, the country is unique in being able to roll it out on an pan European industrial scale, leading an entire continent in implementing then covering up emissions testing, and now corrupting the trade in two-thirds of the continent's gas imports. The corrupt appointment of the German zealot Martin Selmayr to the heart of the EU raises suspicion that the repression of the truth and blocking of all measures to tackle corruption has begun with a German takeover of key appointments. Germany's scoring on independent international indices was summarised by a correspondent in response to the post below; 
Unlike the EU the UK does not attack commercial competitors using the legal system: the EU attacks companies like Intel, Google/Alphabet, Microsoft, Amazon, Chrysler, Fox, Facebook, Starbucks, Apple, Sony et al by using antitrust charges to further the interests of Eurozone technology companies.

Circa 2016 - in terms of shareholder protection the UK is 4th in the world behind Hong Kong, New Zealand and Singapore: France is 29th: Germany is 49th.

In terms of creditor protection: Germany is 28th: France is 79th.

No other EU country can match the UK on Rule of Law: the UK is 3rd in the world for property rights protection: 2nd in the world for Investment Freedom: 3rd in the world for Financial Freedom. As The Wall Street Journal’s Jon Sindreu has noted: “most international financial contracts are written in English law.”

The World Ranking of Judicial Independence cites: UK 6th - Rwanda is 23rd, Germany 24th, France 28th, Saudi Arabia 30th, India 53rd, Spain 58th and Italy 65th.

The EU is like Volkswagen writ large: when they can’t hack it – they crook.
This deep and endogenous German economic corruption will not play well in the rest of Europe. The UK, the Netherlands and the Scandinavian nations, with low levels of corruption and high scoring of commercial rectitude and probity, will be feeling fouled by contact with German corruption - and will now be adding up the commercial losses that German crookedness has cost them. The southern nations will be aggrieved that they have been bullied, coerced and hectored by a deeply crooked nation wearing a false disguise of moral superiority. And eastern nations such as Poland and Bulgaria, countries Germany has robbed of billions of Euros in corrupt complicity with Gazprom, will be looking at concrete measures to get their money back.

Frankfurt may attract a few McMafia Russian banks, a BCCI or a handful of Ponzi scammers, but chances now that any reputable international financial institution would want to be mired in the filth of institutional German economic corruption are slimmer than ever.


terence patrick hewett said...

As Tim Cook, chief executive of Apple rightly says: the global automobile industry is on the brink of a technology-led upheaval: “It would seem that there will be massive change, massive, in that industry”

Apple, Sony, Google-Auto-LLC, Alphabet Inc., Tesla-Motors, Uber, Faraday Future, Nvidia, Dyson, BYD and Baidu Inc. are becoming significant players in the industry: this has got German and French manufacturers and media/publishers so worried that they are attacking non-EU companies with EU anti-trust charges.

According to Stefan Heumann of Berlin think-tank Stiftung Neue Verantwortung:

“Initially this was publishers against platforms. Now it is about Google expanding its reach into areas of traditional manufacturing [like] cars and home appliances. This has German industry worried.”

With the onset of autonomous vehicles and connected car data, German industry is afraid that they will be relegated to simply making wheeled boxes for Google software.

Transport systems and technologies are merging like TV/PC/mobile/laptop technologies are merging. Will there be any call for car ownership at all? Will self-driven car ownership run parallel with driverless and be a symbol of status? It will impact on improved safety and therefore on insurance: plus taxi/lorry driving, city design, mass transport systems and very much else.

Stephen J said...

There are only a few ways to make a good living in our market oriented world:

Trade, buying cheap and selling dear.

Manufacturing, buying some raw materials and creating a finished product for sale.

Theft from nature, the most natural human activity.... hunting shooting and fishing.

The problem is that as the state machine becomes ever bigger, ever more corrupt and ever more avaricious, those activities become more difficult to derive any benefit from.

In days of yore, when the state was less intrusive, the cost of the state was somewhere less than 10% of income/profit. Losing a small amount to the state, or losing a bit through grift from employees, and yes perhaps a little corruption was usually recognised as an acceptable cost of doing business.

Human beings are many things, but mostly all we desire is a quiet life, and we see things not as permanent, but as the events of a human lifespan... supposedly we are the only life form that has this knowledge that death is part of life.

Some folks, by way of response invented their own institutions in order to gain immortality for themselves, in this country (dunno about others) such institutions are regarded as bodies (corporations) as if they were living individuals.

The more that the state takes, so the more assiduous becomes the examination of the inputs that go into a market activity, because without doing this, the activity becomes pointless. The extreme of this situation is what is experienced by the people that are subjected to nutty regimes like those of communist China or the soviet union, where so much is stolen by the state that people get to the point where they have little alternative but to starve or at least try to operate completely unnoticed. Or just give up and pretend, which is how those states were eventually defeated, they ran out of income.

We have now reached a stage in the EU, particularly with brexit coming, that these state corporations have to push the corporations to breaking point, in order to satisfy their greed for our money. In other words, they are now as nutty as the formerly mentioned communist states. They in turn begin to act in concert in regard to their customers, and between themselves they look for any tiny advantage, either in the tax system, or through some form of grift.

This is all perfectly understandable, it is needed in order to survive the onslaught of the ever more avaricious state...

It is the whole point of brexit, which is why the state hates it, it knows that we know... The state is fighting hard to force yet more of its corporatism onto us, it chooses its favourite partners and lets them away with murder... This is what used to be known as fascism (as opposed to communism), but is now more accurately described as communitarianism, also known as state controlled slavery.

This is where the state controls every aspect of a human life, something that George Orwell sort of described, the only difference was that he did not understand how seductive its arrival would be, given our inventiveness and our ability to dress this slavery up into something that was actually attractive to some people. Social networking and other trinkets.

So when Raedwald quotes thus:

""Globalization has become a motor for corruption in Germany," asserted Schaupensteiner, 58."

We are merely witnessing a globalist madly trying to keep his job as a destroyer of humanity and normal human activity.

Nothing to see here, merely the state doing its thing.

....To be continued.

Stephen J said...

Part 2:

There are a couple of business activities where humans can behave like real humans, and we look at them and are made to feel sick and hold our hands up in horror because they are so "uncivilised"... But they do offer up an alternative view of the world, a more human view.

Narcotics and stimulants... In general the state hates them because they reduce man's capacity to work 24 hours a day.

Fun fact, historically, right up until the Kalahari Bushman was brought to his knees during the last twenty years, human beings could do everything they needed for a happy and fulfilled life in TWO days out of every SEVEN, and the women stayed at home, kept house and raised the kids.

For those that wish to challenge this read the book by Tom Hodgkinson "How to be Free", which described how, even in the cold northern countries, we worked far less than we work now.

The state's big lie, is that we need them...

Yeah, like a hole in the head.

(Bit of a ramble Raedwald, my apologies).

Dave_G said...

@RR - all so true. We are enslaved to monetary interest - usury.

Without the interference of banking interest payments I suggest most households would be better off by around 20% of their spending income. If we also consider usury taxation then this would rise to 60%+

All we can expect is a constant increase in these amounts and the corresponding decrease in ability to pay, freedom to enjoy life and anger at the abuse.

Until private banking is eliminated - and it's only the will to do so that is lacking or preventing this from happening - then we will all be over-worked, over-stressed and under the thumb of the Globalist/NWO/Banksters for ever more.

jack ketch said...

but chances now that any reputable international financial institution would want to be mired in the filth of institutional German economic corruption are slimmer than ever.

Because the almost-German-levels-of-corrupted UK Financial Institutions will not jump at the chance to move to a jurisdiction that will allow them to make even more, and corrupt, profits? They have a duty to their shareholders, doncha know? Infact at the moment they are obviously playing 'who will bribe us the most; EU or yUK'? Whatever the politicians decide, however BrexSSHite goes down, no banker will be harmed in its production...and you can take that to the bank.

English Pensioner said...

The problem in dealing with many countries outside Europe, particularly Arab countries, is that you will not get a contract unless you are prepared to pay the necessary bribes and we are putting our companies at a disadvantage by stopping such bribes.
Within Europe is a different matter. There is certainly a lot of low level bribery. A friend posted to Brussels for his company was given an allowance for "unquantifiable expenses", ie bribes. He found that to get the lease on his flat completed it had to be registered at the Marie, and that unless he was prepared to pay, he could wait there all day for the appropriate official who was busy. A small bribe, and he would appear. The same for things like documents for his car, various permits, etc, all required a bribe to avoid a long wait. That's life at low level dealing with minor clerks, presumably it extends the whole way to the top.

Raedwald said...

EP - I feel rather safer flying in an aircraft in which all the systems and sub-assemblies are sourced and procured on technical and qualitative grounds, rather than because the sub-contractors paid the biggest bribes for the contracts.

As the Germans will find, the problem with contracts won by bribes, corruption and crooked dealing is that the motivation for continuous product innovation and improvement, R&D and constant improvement disappears. As tph commented earlier, an economy relying on fraud and corruption as the Germans do is destined to lose out permanently.

terence patrick hewett said...

Re: Design of driverless cars

When you remove the following from a car:

• Engine
• Engine management
• Engine control
• Gearbox
• Fuel injection, carburettor, fuel pump and fuel management
• Turbocharger or supercharger
• Exhaust system
• Exhaust gas re-circulation
• Fuel lines
• Fuel tank
• Ignition
• Starter motor
• Transmission and drive train
• Water cooling, radiator and fan
• Cooling for air, cooling for oil
• Air filters and oil filters
• Lead acid battery, charger and alternator
• Associated instrumentation
• Human driver

And you insert:

• Battery under floor or in bodywork
• Motors in wheels
• Automated motor control/steering/connected car data software and hardware
• Wireless charging/drive

What you achieve is:

A saving of a great deal of space and weight: which is why Autonomous Vehicles (AVs) look so odd: you don’t need a bonnet because you don’t have an engine or anything else for that matter, so you can do all sorts design-wise: you don’t even need a front or a back: you can make it circular or spherical if you wish. And you reduce the vehicle to a device not much more complicated than a Kenwood food mixer: you reduce the device from about 20,000+ components to plus/minus 3000 components: the power-train alone has a reduction of about 2000 parts to about 20 components. A Tesla Model S has fewer than 150 moving parts, including the drive-train, windows, controls, suspension and doors. A typical internal combustion engine car has about 10,000.

The implications are:

Production and design innovation can take off using advanced production techniques, 3D and 4D printing and customised programmed production. A whole raft of new entrants can put most of the established automobile makers out of business. The existing vast production facilities geared to export are replaced by smaller highly automated and flexibly programmable factories sited where the markets are.

The implications for society are immense and not yet understood: transport systems and technologies are merging like TV/PC/mobile/laptop technologies are merging. Will there be any call for car ownership at all? Will self-driven car ownership run parallel with driverless and be a symbol of status? It will impact on improved safety and therefore on insurance: plus taxi/lorry driving, city design, mass transport systems and very much else.

Engineering is by nature incremental: just because there is a difficulty today does not mean there will be a difficulty tomorrow: and non-engineers find great difficulty in wrapping their minds around this fact. In 1903 the Wright Bros were running around a field in North Carolina: 20 years later Snoopy was battling it out with the Red Baron: 20 years after that the Spitfire and the Hurricane set the skids under Hitler: and in just 65 short years after 1903 we were on the moon.

At the moment it is all academic: technology is way ahead of legislation. The Automated and Electric Vehicles Bill 2017-19 is currently being debated in parliament to set out how new technologies will operate.

I am an automation engineer: if you only knew what we have up the tubes for you it would be the high road to the wet house: you would not like it at all: not no-how. Contrariwise, if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.

They all laughed at Christopher Columbus
When he said the world was round
They all laughed when Edison recorded sound
They all laughed at Wilbur and his brother
When they said that man could fly
They told Marconi wireless is a phony
It's that same old cry

They laughed at me wanting you
Said I was reaching for the moon
But oh, you came through
Now, they'll have to change their tune

They all said we never could be happy
They laughed at us and how!
But ho ho ho!
Who's got the last laugh?
Hee hee hee!
Let's at the past laugh
Ha ha ha!
Who's got the last laugh now?

Bill Quango MP said...

Will there be any call for car ownership at all?

Why wouldn't there be?
the argument for today is there is huge public subsidy for train and buses. Taxis are plentiful and even daily use on a modest commute will cost less overall than owning a car,including deprecation, over its lifetime. And there is no need to ever learn to drive. Someone else will drive you so you can relax. And never need to park. or own a garage or driveway/

Yet car ownership is still 75% per household in Uk. A rise year on year since 2008.
At least 30^ of all uk households have 2 cars.

Only in a vast metropolis like London does not owning a car become the norm.
Outside the major cities car ownership is required..
Though, by ownership, that might very well mean leasing.

DeeDee99 said...

"And never need to park."

Well here's a female who freely admits her spatial awareness is a little defective, especially when reversing, who's just smiled :)

When on a work-related visit to Transport Research Laboratories about 8 years ago now, there was one area we weren't allowed in and our guide said the project they were carrying out for the DfT (which we could see involved a vehicle) was highly confidential.

With hindsight it was obviously a prototype driverless car, presumably being tested. I hope we're well ahead of the Germans with this technology and can give their car industry and well-deserved kick up the goolies ...... in recompense for the diesel emissions, if nothing else.

Nick Drew said...

Have gone into print per your instructions, Mr R

Budgie said...

Jack Ketch said: "Because the almost-German-levels-of-corrupted UK Financial Institutions will not jump at the chance to move to a jurisdiction that will allow them to make even more, and corrupt, profits?"

So what's been stopping them up until now?

Budgie said...

I am afraid I had to laugh at the concept that "Intel, Google/Alphabet, Microsoft, Amazon, Chrysler, Fox, Facebook, Starbucks, Apple, Sony" are the little boys being bullied by those nasty corrupt Germans. And by the way I am perfectly convinced that the Germans are nasty and corrupt.

Nick Drew said...

PS - I have suffered personally at the hands of German failings as regards rule-of-law

several years ago my co. sold a big enterprise software product to 2 household-name German co.s. Then they merged. We had already installed the s/w for the first one; the 2nd called us in and said they no longer needed the product (they would use the 1st co's licence after the merger) and said we could consider the contract torn up.

We had used an excellent German agent and law firm, and politely suggested the contract was sound. They said, oh yes, perfectly sound, but whatcha gonna do about it? German court, foreign company - you don't stand a chance. Our agent and lawyers confirmed as much.

They then said: if you don't piss off, we are going to sue you for wasting our timea and causing us expense.

Nice people, nice legal system.

(As it happens, large-scale s/w is a difficult matter for the buyer. We had a quiet word with co.1, where (a) we were already become fully integrated into their systems set-up, and (b) we'd already had occasion to let them see a flash of the cold steel, in the shape of giving them to understand what our nuclear option might be. So it all ended with a reasonable deal on a licence extension, and we didn't go home entirely empty-handed...)

Budgie said...

Before anyone gets carried away with the idea of nemesis for German industry after their, admittedly, distasteful hubris, I'd like to remind everyone that the software system commonly used in cars (Can bus) is a Siemens open source system. So a bit less of the Google/Microsoft will lay waste to German industry rose-coloured glasses if you please.

Budgie said...

Although the likes of Jack Ketch and Tony Blair and other Remain nonentities won't like it, the biggest corruption in the EU is not the bribes (which actually cost the businesses real money) but the Euro currency. The Germans have engineered the Euro to impoverish and humiliate much of the rest of the Eurozone to their own mercantilist benefit.

The Euro is much lower than it should be for Germany, and much higher than it should be for the PIIGS. This was predicted in the UK a couple of decades ago - due to relative movements of different countries' economies, a one-size-fits-all currency would not work. Of course the instigators of the Euro know this; they have taken a gamble that it will force political union.

In the meantime German industry gains because, for them, the too low level of the Euro currency gives them a pricing advantage in world markets. This is a level of corruption that far surpasses the effects of bribes. And Remains are blind to it.

jack ketch said...

Although the likes of Jack Ketch

Actually the likes of Jack Ketch pretty much agrees with you about the euro.

Mr Ecks said...

TP HJewitt--You maybe able to build the electro-crap "car" but the software is nowhere .

Think of how many times the computer crashes. Try that amongst traffic at 70 mph in 2000lb of car.

And screw the Fish Faced Cows plans to turn private transport public. Luckily they are all deluded with gee-whiz techno-bullshittery hype that is a long way off --if it can be done at all. Hopefully NOT.

Budgie said...

Jack Ketch said: ""Although the likes of Jack Ketch ..." Actually the likes of Jack Ketch pretty much agrees with you about the euro."

Well, that's nice to hear, Jack.

But some Remains have a habit of thinking that the Remain option at the Referendum was for the status quo. The reality is if we had voted to Remain it would have been the signal for "more Europe", not the position as it was in 2016.

Never mind Nick Clegg's imaginary imaginary (two imaginaries equal one real) army, sooner or later we would have been pressured into joining the Euro. As the likes of Tony Blair (and Clegg) know full well, and want. So, Jack, your puerile ranting against "BrexSShite", if acted upon, would result in us being enmeshed by the Euro-currency-shite.

So if you really agree with me about the Euro, it's time you changed your mind and supported Leave. And cut down on the shite.

jack ketch said...

would result in us being enmeshed by the Euro-currency-shite.

Which I don't see as a bad thing, along with 'ever closer political union'. The fact that the euro is an abortion of French /German rivalry for influence in the EU, and is as corrupted as a QEd £, don't mean we should chuck the baby out with the badewasser. But it will be academic after BrexSSHite anyways, when the £ becomes so soft it will need a Labrador puppy to cart it around (again, not necessarily a bad thing according to those Brexiters who write on the subject).

Anonymous said...

I agree with Budgie, and have said as much on numerous occasions. I say to Italians driving new Audis and moaning about cuts to their pensions "Well mate, you are driving your pension. With what you get paid you shouldn't be able to afford this."

TrT said...

"Think of how many times the computer crashes. Try that amongst traffic at 70 mph in 2000lb of car."

I honestly dont remember the last time my computer crashed, or phone, and they are fantastically more complicated than a car.
When was the last time your microwave crashed? When was the last time your car ECU crashed for that matter?

"Because the almost-German-levels-of-corrupted UK Financial Institutions will not jump at the chance to move to a jurisdiction that will allow them to make even more, and corrupt, profits? They have a duty to their shareholders, doncha know?"

Crime doesnt pay.
The first whiff of corruption, customers run.
You might win a few contracts, in the short term, but you get a reputation for poor quality and get blacklisted by people you cant afford to bribe